Fork fork and Away: Hive and the strange Effect Justin Sun has on the Awareness of Steem

There is a good chance, that this is going to be my last post on the Steem blockchain. A lot has happened in the last few weeks, even for a space like crypto. I was rather quiet here during the last few weeks, in part because I'm swamped with work and also because I'm someone who waits until the dust settles, before I give my opinion on something. But oh boy, this time the dust had no time to settle. We went from @justinsunsteemit buying Steemit to Softfork 0.22.2 to Justin Sun colluding with exchanges to take over Steem to a lot of senior staff leaving Steemit INC, to a "voting war" to another hardfork, splitting Steem into Steem and Hive with one month.

When Hardfork 21 (and 22) happened, last year in the end of August, I was wondering what effect it has on the of Steem. So I wrote a Python script, which draws some nice plots. Back then I realised, that only month after the hardfork is too soon, so I wanted to wait another 6 months to look at the new data. Of course, I was not prepared for any of this. Half a year ago seemed to be "business as usual", the hardfork was done and Steemians kept on steeming, while the project slowly faded into obscurity (sorry for being a bit cynical here, but the data supports this view).

Here you can see the rank of Steem on CoinMarketCap (I have to put the same disclaimer as last time: the historical data from CoinMarketCap also includes "scammy" coins with a highly inflated market cap. If you go to CoinMarketCap now and look at Steem, it will be ranked much higher, since CoinMarketCap puts those coins at rank 200 and below for their up-to-the-minute data).

The black horizontal line indicates when HF 21 took place, the red horizontal line indicates when Justin Sun bought Steemit INC.

Steem reached rank 108 on December 8. 2019, which was its lowest rank ever. The curious thing was, that this happened at a time, when the positive effects of HF 21 should have come into action. But they didn't, or there were no positive effects.

On the other hand, when rumours of Tron buying STINC spread and when Tron finally bought STINC (February 14. 2020), Steem climbed up to rank 87. The recent happenings surprisingly helped Steem even further: despite being the hardest dumps crypto has ever seen, Steem climbed a few ranks up to number 79 as of March 15. 2020.

As of writing this, the price of Steem did another huge jump: over 71% up in one day (this time I'm using data from @coingecko) !!! Given the current market situation, this is astounding. The upcoming hardfork and the prospect of two separate chains inflates the price.

The only downside is, that after a pump like this, a dump naturally follows. As much as I like the idea of Hive, I know that it will be very difficult for it to compete in the crypto market. Even though a lot of influential Steemians will move to Hive, I think that in the overall crypto market Steem is just a niche, so with respect to mainstream adoption it is a niche within a niche.

I think the whole Justin Sun drama in the last few weeks, spread to word about Steem much more than STINC did in the last two years. When Justin Sun took over, a lot of people were assuming that he will do a great job when it comes to marketing and in a strange way he did. The downside of course is, that he kind of killed Steem in the process.

I'm rather pessimistic about how Hive will do in the future. I can just repeat, what I wrote after the acquisition of STINC was announced and the idea of a hardfork was thrown around.

I think that the tumbleweed scenario is more likely to happen, but I'm happy if I'm wrong with this prediction.

Hive is a cool idea, but it will be very very difficult for its native token to gain any traction on the market and there is a good chance that it will slowly fade into obscurity, despite having a great community. So far no fork every overtook its origin project (you could make the case that Ethereum Classic is the "real" Ethereum, but there is a reason why it is called Etherum Classic and not just Ethereum), so it is difficult to argue how it will be different this time. Running witness nodes for an almost worthless coin will not be sustainable and lead to a downward spiral. Getting on exchanges will also be difficult, since there is a good chance of Justin Sun using his connections to prevent that.

My negative sentiment is not only limited to Hive, but also to Steem (by Justin Sun): with most of the influential Steemians and dApps gone, and the full centralisation of the blockchain, there is only very little reason for other to stick around here. It's difficult to predict Justin's next move, but with all the resistance gone, I guess it will be moving the Steem token to Tron and trying to create a competitor to EOS' Voice. The Tron Foundation will have to use all of its marketing prowess to get people to actually use it. That's a challenging task, but not impossible. But let's look at the bright side: all Tron fanboys will have their own social network and spare the other social networks.

Despite my pessimistic view, I wish for Hive to be a thriving crypt project and if I continue blogging, it will be there.