Justin Sun
Alt coins,  Cryptocurrencies,  Technology

Steamed Steem supporters strike Sun

Justin Sun’s ‘hostile takeover’ of the Steem blogging site backfired, with many Steemers and developers planning to migrate to Hive, a hard fork that could cost Tron its investment

Steamed Steem community members are planning a hard fork designed to kick Tron CEO Justin Sun out of the blockchain-based blogging site.

On March 17, a group of Steem community members and developers announced Hive, a fork of the Steem blockchain that will take place at 10 a.m. ET on March 20. All STEEM token holders will receive an identical amount of Hive’s tokens—excluding the roughly 20% of outstanding STEEM Sun acquired when he bought Steemit, the developer of the Steem project. 

Steamed Steem members revolution Hive
Justin Sun’s Steem is revolting—and we suspect he agrees (Photo: Hive).

The controversy began when Tron took over Steemit, planning to migrate Steem users, tokens, and apps onto the Tron blockchain. Fearing Sun would use the voting power of those 65 million tokens—which Steemit had promised not to use—to dominate governance of the delegated proof of stake (DPOS) blockchain, the 20 elected “witnesses” who validate transactions made a reversable soft fork freezing the voting power of Sun’s STEEM. 

While it was pitched as a negotiating tool, Sun called the witnesses “malicious hackers” and convinced—tricked might be  a better word—the Huobi and Binance exchanges to use their customers’ STEEM to vote for an irreversible hard fork getting rid of the freeze and replacing all 20 witnesses. 

The steamed Steem community blew its lid, calling Sun’s move a “hostile takeover.” Several top developers resigned from Steemit, and Huobi and Binance removed their votes, saying they were simply reacting quickly with what they were told was a hacker, not a community uprising.

Steamed Steem supporters

The March 17 announcement on Steempeak called Hive “a revolution of sorts” against centralization foisted on a decentralized blockchain by allowing one company—Steemit—to oversee code and infrastructure. 

“The new Hive blockchain is the culmination of stepping up to meet the challenge of returning to shared values of protecting and celebrating the vibrant community that has grown around our ecosystem,” it said.

One loud voice in the pro-Hive camp has been the validator who goes by Blocktrades. Blocktrades told his nearly 27,000 Steempeak followers that he “won’t be compromising with Justin Sun.”

Specifically, the validator does not want to pay Sun to sell Steemit back to the community. Accusing Sun of destroying Steemit’s brand and goodwill “via his public statements and actions,” Blocktrades said that with the coming of Hive, he believes “Steemit Inc has nearly zero value now.”

For one thing “all the developers he acquired” have quit Steemit, said Blocktrades. 

“While it controls a stake with a quoted value of many millions, it will never be possible to realize that value now,” Blocktrades added. “At this point, Steemit Inc itself has no community to support the value of a coin it controls: the only community here is the Steem community, not the Steemit community, and it mostly wants nothing to do with Justin.”

Blocktrades predicted that the economic value of Steem will move to Hive. Sun “can keep his chain running for a while, trying to find uninformed people to sell it to, but it’s not going to last long with no devs, no real plan from Justin on how to keep it alive, and most of all, no community to support it,” Blocktrades added.

STEEM tokens were about $0.23 at press time, according to Messari

Hive’s busy workers

Hive said it will maintain all Steem users’ post and transaction histories, and all of the DApps will continue to work. 

The Steem blockchain will be forked at the time on March 17 that Hive was announced, excluding any changes made in the interim. 

Beyond removing Sun’s influence, the row has the potential to give Steem a second chance at success, the Steempeak post said. 

“Steem has long been ignored by most of the crypto-space as a failed project of Dan Larimer,” it argued. “We are now being giving the opportunity to show that the community we have is so much more than that, and that we can emerge under the umbrella of a new coin, as a dominant player in decentralized blockchain development.”

Blocktrades made the same point, claiming “we will be a literal demonstration of how a community is what gives a coin value.”

Hive already has “a team of 36 experienced developers, including key devs that were involved in the initial development and maintenance of Steem,” the validator said. “And we don’t just have devs, we have marketing people, business people, artists, and idealists.”

Promising “an all-inclusive, decentralized approach to development, marketing, and on-boarding,” Blocktrades added, “[o]ur combined efforts can do far more than a narrow-minded, profit-driven Steemit ever dreamed possible.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.