Crypto Lessons Everyone Can Learn From the Hostile Takeover of the Steem Blockchain

in steemisnottron •  3 months ago  (edited)

Steem, STEEM, and Steemit are in "the news" far more than usual these last couple weeks, in what will come to be known as The Fall of Ned the Snake, The Rise of Justin the Sun, a brief period right before the community corrected the biggest blemish on this blockchain since its inceptions.

I'm going to start with the important lessons, that apply to many places besides Steem, and then at the bottom I'll put a timeline of everything that happened. Skip down to the Princess Bride meme for the timeline.


The Important Crypto Lessons

  1. Exchanges are a point of dangerous centralization! Remember when the owner of QuadrigaCX died with all the keys? Remember Mt. Gox? Holding crypto in a wallet is just that, holding it close to you. You've got control over it. Putting it into an exchange account is like putting it into a paypal or bank account. You now have a bunch of digital IOUs, while the exchange holds all your actually coins in their wallets. This means they are subject to government intervention, the business closing down, hacks, and deliberate conspiracies such as what happened to Steem. Three different Chinese exchanges used their customers' STEEM to assist in a coup against our consensus governance system. Simply put: "If you don't hold the keys, they're not your coins."

  2. It's hyper-important to vote in a Delegated Proof of Stake (dPoS) system, or other voting-based governance system. Especially when that governance decides the security of something. Not nearly as important to vote when a group is choosing where to go eat dinner, much more important when deciding the block producers of the blockchain where you live. Don't confuse voting for witnesses with the voting that people do out in the left vs right, blue vs red world. Not only does our version not include the barrel of a gun, but anyone can run for witness, and any account can vote (with equal effect) on 30 different witnesses. It was great to see our community step up and re-activate a LOT of VESTS that hadn't been voting.

  3. A community (even a relatively small one) can make things happen when they put their differences aside, get communicate a LOT, and collaborate to get something done. The greatest thing about Steem has always been the community; coming here in 2016 and realizing I was now on a social media where the norm was an understanding of personal sovereignty. Mind blowing. We all know Tron actually bought Steemit hoping for that user count, so they can add it to their "15 million"... Ha!

Image Source

What Exactly Happened?

Here is the timeline of events as simplified as I can get them, and as far as I know them. Please do comment with things I missed, if I mis-quoted somewhere, etc. I tried to really summarize, and just include a bunch of links for those who want to dive deeper.


What Comes Next?

It's hard to say. Theoretically the town hall is still on for March 6th... But with Justin all over Twitter calling our witnesses "hackers" and "criminals," the conversation seems less likely to be productive than it did 60 hours ago. Personally, I'm going to take a bit of a break from posting much, focus on getting ready to hit the road in 8 days, and do more reading of content & comments, so I can stay abreast of the community's thoughts.

Pretty sure there will be a hardfork. On one chain will be Tron, SteemitInc,, their full nodes... The other side will have the community(ies), Splinterlands, Steempeak, Keychain, 3speak, SteemSQL, SteemServices, and many others.

What I'll be doing if there's a HardFork

  1. I'll stick with the community chain, keep my same stake on that chain (or increase, especially if price drops.)
  2. I'll liquidate 100% (over time probably, depends on post-fork price) on the tron-chain, remove all my content (replace it all with a redirect to my content on the community chain), and use my down-votes against steemitron as I power down.
  3. Revel in our new/old blockchain that has just removed a ~20% stake that was ill-gotten gains, PLUS we've gone through major crisis together, AND we got more news than ever before.

Have You Seen The News?

| CoinDesk | Cointelegraph | Yahoo Finance |
| CryptoBriefing | ForkLog | The Block |
| CryptoNewsFlash | CoinDesk | CoinDesk |

Some Great Articles About the Event



Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

The lesson one is the oldest lesson, written on rocks by ancient robot like humans who once inhabited the Cryptospace: Not your keys, not your coins.

i think you covered everything -) thats a joke, thank you,,. this must have taken some time to put together.. and nicely done.. easy to read and the simple clear facts are presented..

we got 10 witnesses now.. what next!

Now I just need to go through it and update with another 1500 words on what has happened since :-P

That's a quality timeline! BOI is inspired!

I also wrote about recent events in this post and I would appreciate your feedback.

Steem on!

Thanks BOI :-) And the timeline just keeps getting bigger as more and more is going down. This is some wild stuff.

The whole thing has repulsed me. Criminals like Sun and the cronies at the exchanges are to be sued. I can not in good conscience invite anyone to join steemit. This is a mess. Steemit is a farce. A dead coin rolling. This platform was a nice try. Love the idea, pity about the code, I blame the failure on the authors Ned and Larimer. Idiots. Look at the EOS fiasco a year ago where 1 witness reversed the entire chain against the wishes of the others. DPoS fail. This is not a decentralized place and as a purist I give steemit a big fail and powerdown from this joke. The only problem is that the joke is on me, on us. Blocktrades has blocked any ability to sell steem from our wallets here. When will this hijack end so I can get out of this mess. Disgusts me. I feel robbed. All my hard work accumulating steem which is now "under maintenance" according to Blocktrades, the only place I can sell my steem, unless you have some other ideas or a better perspective. We are all currently held hostage by blocktrades, the name says it all, oh the irony.

Ya, it's a pretty terrible situation. I really wish they had just locked the Steemit, Inc. stake last year when the code was added, or earlier.

We certainly knew it wasn't de-centralized from the beginning, but the big thing for me was that it was decentralizing over time thanks to all the ways inflation is distributed and nobody really being able to maximize ROI without actually interacting with the chain in all the different ways.

This is not a decentralized place

Nope, just the most decentralized we have atm :-/

Blocktrades isn't the only means to exchange STEEM, and honestly I'm glad he and most of the dapps/services shut down rather than be on Tron's chain.

Thanks for your reply Kenny. Can you advise me how to move my steem from wallet here to Bitrex for example. I see no way how to do it except the blocktrades option in the wallet section.

I would hold off on selling if I was you. It looks likely this will lead to a pump (and likely dump) of some kind.

If we have a fork, you definitely want your STEEM to be in your wallet, as you never know with the exchanges.

Yes that makes sense, I can see a pump and dump coming, with Sun involved. He is the king of P&D. I will keep the steem in the wallet for now.

You create an account on Bittrex, and use the STEEM->deposit option. It will give you an steem account to send to & the memo to add.

Many thanks that's good to know as a backup if we have to abandon ship.

I appreciate the clarity you bring and the time line plus links so I can dive deeper.
Big changes and good to know we can carry on on a new forked chain if need be although I do hope that won't be necessary.

It's a wild time to be part of this Steem Game haha. I'll probably take a break after this either way, but we'll see.

FYI I'm also keeping this post updated as things progress :-)

Fantastic summary much appreciated. Will be following you. Does that mean we have to liquid what we have here to migrate it to new fork? A bit confused and out of loop since self imposed Discord ban to return myself to myself since travelling in India...

We're still not sure there will be a hard-fork. As of earlier today, a lot of the witnesses were talking about a win/win that would preserve JS's "honor" and investment; big change of tone after the meeting yesterday between SteemitTron & the witnesses.

If there's a fork, you would have your same stake on both chains.

Ah. In retrospect, that was dumbass question. 😁

Good info!
It’s an amazing summary,
in my point of view something tells me that the end of Steemit came
and you have to adapt to the changes that are to come!
Whether we want it or not, the decision is being taken at the management level
and the conventional user opinion goes to the background!

I hope all is not lost!

All is not lost.

Remember, Steem is not Steemmit.

Your opinion doesn't have to go to the background. You can go to the MSPWaves Town Halls on Discord and speak, you can write posts about the changes, and more importantly comment on the big posts about the changes. You can promote for/against the witnesses you want to be top 20 or not, you can obviously make your witness votes, as well as convincing friends/followers, and of course you could power up more STEEM so your vote is heavier. But yes, it's a "stake wins" kind of thing. That's also why so many communities & collectives form in a place like Steem. You or I may not be able to outvote a whale, or get that kind of attention, but communities of people can get a lot done.

Thanks for breaking it down and writing a well detailed article.

The only issue I have is that you mention that we all vote with 'equal effect". This isn't true, because if it were, Justin couldn't have installed his puppets. Your vote is weighted on your stake.

This means all us little guys must join to take down the Oligarch.

What I was referring to is that each VEST (the voting stakes. Your "Steem Power" is actually just the current value of your VESTS, priced in STEEM) gets to vote 30 times with equal effect. I'll fix the wording.

This means all us little guys must join to take down the Oligarch.

Exactly. I feel like we should ever be striving towards further de-centralization on the platform, as in the world as a whole.