"Sun's Folly" will be taught in future blockchain business schools
View this post on Hive: "Sun's Folly" will be taught in future blockchain business schools
In mid-February 2020 Justin Sun acquired the shares in Steemit Inc and proceeded centralise the blockchain under his control, improperly using Steemit's founders stake (intended for development and decentralisation of the blockchain) and tricking exchanges into initially supporting his power grab.
After extensive efforts to resolve the dispute failed, the community revolted and formed a new, fully decentralised blockchain - Hive - without the pernicious influence of Justin Sun and his minions.
Because of Open Source licensing, Hive was legally able to duplicate all the code and content on Steem.
The vast majority of the community and decentralised applications and projects moved to Hive and Hive was listed on many cryptocurrency exchanges without having to pay the normal listing fees.
On 19 May 2020, a Steem hard fork (0.23) designed to steal the Steem from 65 accounts associated with creating Hive became public.
My position on this hard fork can be found here: https://peakd.com/hf23/@brianoflondon/letter-to-exchanges-do-not-run-steem-hard-fork-23-hf-0-23-0
This was the final straw for my involvement with Steem.
I will now post exclusively on Hive at https://peakd.com/@apshamilton/posts
All my old Steem content can also be found on Hive.
"Sun's Folly" or "how to make crypto enemies and piss off people" (an entire blockchain community that you just spent good money to "buy") will be taught as a compulsory topic in the blockchain business schools of the future.
The Steem community has made crypto history here:
- first being subject to a previously theoretical crypto attack vector, the double "defacto bribe attack" as Vitalik Buterin calls it, that has broad implications for dPOS blockchains in general;
- second having centralised exchanges breaching their fiduciary and ethical duties to their customers by powering up liquid Steem (thus locking it up for 90 days and preventing customer withdrawals) and then voting against those customer's interests for stooge witnesses with no legitimacy;
- finally, by an epic 'get out to vote' fightback in witness voting that has put 2 legitimate witness back in their rightful place and will hopefully soon remove all the Chinese sock-puppet witnesses that Sun had used to conduct his coup d'etat.
The first lesson students will learn is that decentralised blockchains based on real active communities and open-source software cannot be taken over by a pure financial corporate type play.
The second related lesson is that "you cannot buy a crypto community"; you can only get a community to follow your goals by working with them, gaining trust and showing good faith. Simply buying the shares in the founding company of a blockchain is not enough if a real community has developed (which is the only reason you'd be interested in buying in the first place).
Decentralised (partly or wholly) blockchains are completely different animals from corporations and too many people in crypto talk the talk regarding decentralisation but actually don't understand what it really means.
Justin Sun, brought up in authoritarian China, and used to absolute control of the Tron blockchain, was simply unable to comprehend the level of resistance to him ousting the witnesses legitimately elected by the Steem community, particularly by the foul means he used.
The third lesson is "do proper due diligence". Sun thought he was acquiring a large Steem stake with the Steemit Inc acquisition that he could do what he liked with.
But this ninja mined stake was not only subject to 4 years of understandings and a status quo that it had never voted. It also was subject to explicit restrictions on voting power in the blockchain code itself! An earlier hard fork had introduced those restrictions and the witnesses could turn them on at any time without changing the code. This is called a "soft fork" but this is a misnomer. It is not a fork in the blockchain code at all. It is just activating part of the code that is already there.
Proper due diligence would have revealed that this wasn't ordinary Steem. It was like shares in a company whose voting rights could be frozen by simple board decision. The restriction was already in the code, just like a restriction in the Constitution of a company. It was easy to discover with proper due diligence, even if Ned had not been straight with Justin about it.
But Justin missed this and falsely accused the witnesses of stealing his stake when in fact they just activated pre-existing code specifically which was put in place for exactly this scenario.
Justin's has stated that he knew nothing about the pre-existing understandings regarding this ninja mined stake between the community and Steemit Inc. He then claims to not be bound by them. However this is legally wrong. He bought a company, Steemit Inc, which was bound by these pre-existing understandings and owned the ninja-mined stake.
He IS bound by them, just as he is bound by the code.
It has been a scary but very exciting time to be part of the Steem community and see it come together to fight tyranny.
While we may bicker incessantly in normal times, when subject to external attack we come together and fight for our online lives.
I am so proud tonight of the Steem community and a particular respect to the brave martyrs of Steemit Inc: @andrarchy @vandenberg, @gerbino & @roadscape. While we risked our investment to save our Steem, they took the principled decision to resign their employment in uncertain economic times to protest tyranny. Thank you.
Postscript: A potential win-win way forward
My standard byline below could provide a win-win way forward for Justin Sun and the Steem community.
Just as Steemit Inc came with pre-existing obligations to the community regarding the ninja-mined stake that Justin didn't know about, it also came with a ~$400M legal claim against Facebook and Google for banning Steem advertising, which he also didn't know about.
This legal claim is worth far more than the ninja mined stake and is more than enough compensation for what Justin feels he has lost.
Rather than spending his money trying to take over the Steem blockchain, Justin can sign Steemit Inc up for @jpbliberty's crypto class action and participate in the funding of it. It needs less money ($US 2-3M in total) than he has already spent on Steem and has a huge ROI for his Steemit Inc claim alone.
If Justin supports this, it is a huge win for the Steem community also because every Steemian has a claim in this class action based Steem being worth $6.14 when the Ad Ban was announced and being very directly affected by the ad ban. We have great evidence of this from Steem posts.
We are well advanced with a law firm, top barristers, initial funding and US$350M in claimants signed up.
I've posted this whole thing on Twitter if people want to go signal boost it that would be great.
TWITTER: Thread on #Steem and #SteemHostileTakeOver legal analysis from lawyer and my partner, APSHamilton #Crypto
Interesting. I didn't know the restriction on the ninja-mined stake was already in the code but not switched on. I missed that bit in the story.
For me, there are two stand out takeaways:
Good to see that both of these are not my circus, not my monkeys:
Meanwhile, for the Steem Community:
Final extraordinary takeaway: how a decentralised global community crossing many times zones, cultures and languages can organise together.
Yes, I wasn't aware that the voting restriction option for the ninja-mined stake was already in the code until very recently either. The use of the term "soft fork" is quite misleading.
Thanks for this summary and the edit following the recording of the meeting with Justin. What interesting times we are living in.
This is crypto history in the making. Steem is back on the crypto map (after being lost in the wilderness for a long time).
Dear @apshamilton
There is a saying "you need to people to dance tango". And it's very true saying. I don't think that constant putting blame on one party in this conflict can help us.
It's obvious that witnesses and many whales were hostile from the very beginning and this soft fork escalated conflict. Justin surely brought it to another level. Right now I would say "it's a draw". It's a great time to negotiate and use current leverage.
But will witnesses be willing to understand Justin (he is from completely different culture)? OR will narrative "us versus him" be promoted even more? Soon we will learn.
The fact that ddos attacks on Steemit were taking place (I think it's clear to assume that it's not Justin, but his "enemies" were behind it). Steemauto is down. People who will suffer the most from this fight - will be us, small regular users. That's how I see it at the moment :(
Anyway, for the first time ever STEEM is kind of decentralized. Until now we only had group of 20 witnesses, and they all were part of one group. It's like having democracy and 90% politicians are from one team.
Yours, Piotr
It is not "another culture" it is the crypto culture and we are all a part of it. Those of us who are in crypto want decentralization and to control our own income. It is crypto culture he needs to learn, not us having to learn about his upbringing (though it would be beneficial), he is the one who bought a crypto dapp, he is the one who needs to adjust.
Posted via Steemleo
Personally this is going to go down into many future classes on lessons about blockchain technology.
Totally agree due-diligence really sounds like it was skimmed over, Justin did not do his homework.
First good indicator is a meeting has taken place, discussions will hopefully lean toward growing Steem. Decentralized - Power to the People is not purchased by big money (Corporate thinking).
Did not know about the FB and Google, missed this somehow, Oh the powers that be, living in high pedestals really are missing the mark when banning advertising or manipulating for profit in their own interests.
Thanks for interesting assessment, exciting and interesting times we live in.
Steem community is not just any of ordinary netizens on other social media platforms 😅 I hope he knew it by now and thanks for the heads-up
So he can get his $$ back by chasing a couple of law suits. One against ned, and one against facebook and google.
He should use his $$ to win those suits, make us all rich, and take his profits and move the fuck on.
Posted via Steemleo
We control 10 consensus witnesses at this moment. Seven more and we can put the restrictions on the stooges and the exchanges in place again.
An interesting reaction indeed.
Hopefully this will might lighten things up a little, in the middle of a crisis...lol
Steem wars part 1..The Empire has a hissy fit.
https://steemit.com/hive-100421/@lucylin/nxkuvibq