Thoughts on the Exchange Bailout

There are a lot of serious issues coming to a head on the STEEM blockchain right now. What I want to do today is share a bit of my thoughts on how I see the current problem stemming from the actions taken by the exchanges that chose to act against the governance of our blockchain at the behest of Justin Sun and what I view as the only path forward. Let's first take a look at what we know from evidence available on the blockchain and what has been said publicly by the individuals involved.

The three exchanges involved in the coup of the governance of the STEEM blockchain were Poloniex, in which Justin Sun is a part owner, Binance, and Huobi. I think we can consider the motive and decision of Poloniex to participate in this action obvious due to aforementioned detail of ownership. Where things really start to get interesting is in the contradictory statements from CZ Binance and Huobi when publicly called out for participating in what is clearly either criminal negligence or morally-bankrupt behavior.

As we can see above, CZ is claiming ignorance of any knowledge of Justin Sun's plan to arrest control of the blockchain, while also admitting awareness of the intention to fork the chain. My main point of contention here is where he states "Don’t even know what just happened. Thought it was a regular upgrade/hard fork."

Considering Binance is not only one of the world's largest and most robust centralized exchanges and that they have also been through a STEEM hardfork before, alarm bells should probably be going off when they have to do two things they've never had to do before, which are staking of custodial funds and also setting a witness proxy to help push through this fork. So even if we give him the benefit of the doubt and take him at his word in what is said in the tweets above, this is at a minimum incredibly negligent behavior.

Let's move on to Huobi, who decide to address the abundance of questions and accusation leveled at them by members of STEEM community head on. In this Medium post, Huobi claims that the actions they took were due to being informed of an "immediate risk of an attack" on the STEEM network. They claim to have a policy and history of doing things like this in the past to help secure networks "under attack" and claim they will do better to alert users when they resort to these measures in the future.

All of this being said, where does this leave us now? There are multiple exchanges under extreme pressure from the owners of the funds they have now locked for 13 weeks that have as of yet not even initiated a power down to begin the process of liquidating these funds so their rightful owners have the ability to withdraw their tokens from the exchange.

In the meeting between Tron representative, Roy Liu, and the rightful STEEM consensus witnesses , it's made clear that there are attempts being made to create a fork to change the powerdown duration on the STEEM blockchain to alleviate the stress and potential legal troubles facing the parties involved in the coup. Which seems to indicate that the plan all along was to have the exchanges push through this softfork, allowing Sun to seize control of the chain and subsequently push through a hardfork to liquidate the funds the exchanges have now locked.

My thoughts are that we should under no circumstances allow this fork to go live. The first concern I have is the security risks of releasing a fork without adequate testing, much less one designed and coded by programmers unfamiliar with the STEEM blockchain. My second and arguably more serious concern is that we should not support a bailout of the exchanges that acted against our community governance and I believe that doing so would set a dangerous precedent for the greater crypto movement as a whole.

The vast majority of us that have devoted so much of our time and energy into advancing the cryptocurrency movement have done so because we believe that the world as a whole needs a better system than the corrupt centralized banking systems that are destroying the economies of the world through greedy practices that prey on individuals and erode our freedom and quality of life. To allow these exchanges to get away with their actions and to furthermore assist them in minimizing the repercussions of said actions goes against the very fundamentals of the cryptocurrency movement and devalues everything that we have been working to create. These are my thoughts and opinions on the matter and I encourage everyone to think about the implications of the decisions we make and the examples we set for others during what I consider to be the most trying event that has faced our STEEM community thus far. Much love.