"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.