The split of the steemit or chronicles of the war for decentralization

Index
    Steem и Hive 
    Steem and Hive

    Justin Sun is often at the center of scandals and is perhaps the most odious representative [19459010 ] the entire industry. Not so long ago, events occurred on the Steemit platform because of Dignity, which can be dubbed the "Justin Wars," which ended in a split in the community.

    We decided to find out who the Sith was in this story, who the Jedi were, and which side of the force the community joined. Let's start

     

    Brief background

    Блокчейн Steemit
    Steemit blockchain

    All this hype began on February 15, when the social network Steemit [199010101 ], working on the native blockchain, announced that it plans to migrate to TRON with all applications and the ecosystem as part of a strategic partnership. Sun on Twitter noted that Steemit is evolving to 2.0, and the company switched to its blockchain voluntarily.

    There should be a tweet about the announcement of the transition, but Justin deleted it. Such a shy ^ _ ^

    A little later it turned out that although the Tron did not invest in Steemit, part of the tokens developers should go to their disposal. Social network validators were nervous before because of the impressive amount of tokens from developers (about 20% of the total issue), but the team was quiet and no one made much noise. However, when they learned that part of these tokens and, accordingly, the right to vote passes to the Empire of Sanaa, they did not become silent.

    On February 22, validators voted and made changes to the social network protocol, which blocked the team's token package. And then it started ...

    The struggle for power in digital format

    Империя Сана
    The Empire of San

    What captivates this story? We are witnessing the unfolding model of a revolution in digital space:

    1. The authorities make decisions that the community does not like.
    2. The community vetoed the decision of the authorities.
    3. The authorities counterattack, clearing the dissent.
    4. The community is splitting.

    But here we are a little spoiled. So, the continuation of the story of Steemit - the legitimate development team led by Sun was outraged, and then gathered their forces on March 2 reported that the rebellion was suppressed, the soft fork was canceled, and all the instigators of the rebellion were banned.

    How did this seem to be on a decentralized network? Sun clicked on his friends from Binance , Huobi and Poloniex , on whose accounts there were decent amounts of Steem tokens (only Binance voted 31 730 000 STEEM), they voted for new validators, and new validators thawed developer tokens.

    The reaction of exchanges is very curious - in fact they are not the owners of the funds that are stored in their accounts. However, Binance, Huobi, and Poloniex accused of transforming Steem tokens into voting Steem Power tokens, which caused users to temporarily lose access to funds.

    Huobi officially recognized this, although they made excuses, saying Sun said that hackers were trying to seize power in Steem. An apology letter was later published by and Binance , they simply did not understand what San was planning. Both sites recalled votes, which allowed returning to the list of validators four participants from the previous composition.

    Well, let's say everything is clear with an apology - Justin raised a panic over a hacker attack, everyone quickly did as he asked for a coup in the social network. But you are not confused by the fact that exchanges accumulated user funds to vote?

    That is, you transfer your tokens to the exchange’s wallet, just for storage or for trading, and the exchange uses them at its discretion, without even asking permission. Decentralization, openness and transparency in all its glory.

    We simply defended Steemit

    Нарушение децентрализации на Steemit
    Decentralization on Steemit

    The Steemit community called everything that happened to take over on the platform, however, Justin justified his actions by protecting Steemit from “hackers” who froze developer tokens:

    And also added that he did not plan to take over the network:

    In fairness, we note that the actions of validators are difficult to justify only by the fact that developers anirovali transfer some tokens Sanou. In fact, the validators simply eliminated one of the largest voting networks, as in the materials of the criminal case “by prior conspiracy”.

    In parallel, they deprived the owner of the tokens of the opportunity to dispose of them. It is difficult to name thefts, but the property right is clearly violated. Therefore, the reaction as a whole can be called adequate, just no one expected that San had trumps in the exchange with millions of token votes.

    To understand who is right in this situation, it is necessary to determine how justified the actions of validators are. Accusations of Tron’s centralization and of San’s ties with Zhao and other major industry players have been voiced for a long time, so the community’s fears are not unfounded - they decided to launch a preliminary strike.

    And here is the main paradox of the situation - if San posted a few tweets in sacred anger condemning the actions of validators, and the developers explained to the community that lawlessness was going on, then the validators would realize that they went too far, virtually without any reason depriving the team of tokens . But no, Sun uncovered the heavy artillery, proving that he could at his discretion change power on a decentralized platform. That is, through his actions he justified the hypothetical fears of the community.

    Gone into the sunset

    Раскол сообщества Steemit
    Split of the Steemit community

    Realizing that they have technically lost power over the platform, validators decided to make a knight's move - transfer the community to their blockchain. Therefore, on March 18, was announced hard fork with the transition to the blockchain Hive.io.

    ☝️
    Among the initiators of the fork and the main developers was Dan Notstein, the founder of the largest Steemit validator - Blocktrade.

    Commenting on the situation for CoinDesk, Notenstein noted that the initiative with the transition was generally supported by the community, and only Steemit developers were against it. He also added that perhaps the new network will have to be rebranded (now PeakD ), but this will not affect user data that will be fully transferred to Hive.

    On March 23, the migration to Hive.io successfully took place, as part of the hard fork, a new token appeared - HIVE, which was immediately included in the listing of Bittrex and Probit. On April 27, Binance allowed trading (with activation of withdrawals and deposits on April 29th), and Huobi Global launched the deposit and withdrawal of a token on that day. Perhaps in this way Binance is trying to restore a reputation that has been dampened in the eyes of the community.

    “Pyrrhic victory” Steemit and the success of Hive

    Социальная сеть Hive
    Social network Hive

    In the end, the reaction won. and the developers of Steemit with the help of San still managed to regain control of the platform. But:

    • To whom to return? Suppose, by withdrawing the votes, the exchanges returned 4 validators of the previous composition, but it is unclear how loyal they are to the developers after all of this. In addition, of the remaining 16 nodes, Justin brought the part and it is not clear which part. Is Steemit already included in the Empire of San?
    • Whom to control? Having provoked the split of Steemit, they actually grew up a competitor, moreover, a competitor with that functionality and even the same database, just with other owners, whose reputation among the community is higher than that of the creators of the original. According to CoinMarketCap, Hive's capitalization is now almost twice that of Steem:
    Рыночная капитализация Steem по данным CoinMarketCap
    Steem market capitalization according to CoinMarketCap
    ] Рыночная капитализация Hive по данным CoinMarketCap
    Hive's market capitalization according to CoinMarketCap

    In addition, Hive has shown rapid growth right after the issue and is currently trading 1.5 times more expensive considering the correction; compared to the time of issue ($ 0.42 against $ 0.28):

    Динамика стоимости Hive по данным CoinMarketCap
    Hive cost dynamics according to CoinMarketCap

    Steem is also recovering its position and at the time of publication its value has not changed much compared to the February rate (before the start of the whole story) - it dipped by $ 0.05:

    Динамика стоимости Steem по данным CoinMarketCap
    Steem cost dynamics according to CoinMarketCap

    It is interesting that both tokens survived a short-term surge in value on April 27, only Hive was able to hold a higher position during the subsequent correction. Perhaps investors buy two coins at once to be safe?

    Of course, it’s difficult to judge the popularity of a social platform by token capitalization, but these are at least some numbers. Before the fork, Steemit reported about 1,000,000 users, I wonder how many will remain now? Although, it is quite possible that users will now simply duplicate content on both sites, receiving a double profit for views.

    Be that as it may, the split of Steemit demonstrated how vulnerable the sites on the PoS algorithm become when large coin holders with their interests appear in the industry. Is the era of exchange dictatorships waiting for us?

    Read also:

    Futures for the DeFi market in 2020

    National digital currencies - how far countries have advanced on this issue

    Stablecoins: a safe haven for the period of crisis

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