Steemit Witnesses Successfully Forked Blockchain and Gave All of the STEEM Coins to Themselves!

timcliff (73)in #steem • 9 years ago (edited)

A consensus of 17 witnesses (17 of the elected top 20, or 16 of the elected top 20 + 1 backup witness) is required to successfully hardfork.

For months, 16 of the top 20 witnesses ( @blocktrades, @gtg, @roadscape, @smooth.witness, @abit, @jesta, @anyx, @charlieshrem, @furion, @roelandp, @bhuz, @arhag, @pharesim, @pfunk, @riverhead, and @clayop ) + backup witness @timcliff have been conspiring to take over the blockchain. Once forked, they would have full control and be able to transfer all of the STEEM coins to themselves.

Today - April 1, 2017 - the plan was successfully executed!

@blocktrades, @gtg, @roadscape, @smooth.witness, @abit, @jesta, @anyx, @charlieshrem, @furion, @roelandp, @bhuz, @arhag, @pharesim, @pfunk, @riverhead, @clayop and @timcliff now own 100% of the STEEM coins in existence.

Just in case you are worried, check the post tags ;)

#witness-category #hardfork #blockchain #aprilfools

9 years ago in #steem by timcliff (73)

$1.62

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arhag (67) 9 years ago (edited)

Nice.

While of course this is a joke, I think it is worth seriously analyzing this scenario for a minute. What @timcliff says is technically possible to do, but it is not actually a significant threat. If you are interested in why, read on.

Obviously, no sane person would tolerate such an unjust fork. They would refuse to acknowledge it as valid. But what are users to do? If enough of the witnesses agree to fork, then the official blockchain rules will change according to the rules of the consensus. Even the stakeholders voting the malicious witnesses out after the fact won't undo the fork that already happened. But the users can simply refuse to follow the new blockchain. Socially that will be considered an "invalid" blockchain.

But the old chain will have stopped. According to the blockchain rules once a hardfork happens, all the old nodes that do not have the code to recognize the new hardfork will stop producing blocks and stop following any new blocks after the hardfork point. So the "fair and valid" blockchain (the part of the blockchain up to but not including the hardfork) will have effectively halted. While the resulting service disruption would be very annoying to users, it is still much better than everyone's money being stolen. The users (or more accurately the services providing a convenient interface into the blockchain for the users such as steemit.com, busy.org, the eSteem mobile app, etc.) would then need a new version of the node software (which the developers would code, build, test, and release) that would create its own version of the hardfork which is effectively a no-op: it is a hardfork that does nothing other than increment the hardfork count to get the "fair and valid" blockchain going again. Actually, the hardfork would also probably need to disable (at least temporarily if not permanently) the malicious witnesses as well or else the malicious witnesses could just repeat the same process on the resumed chain before enough users had a chance to vote them out once the chain resumed.

Once the "fair and valid" blockchain resumes, everything goes back to normal (except the malicious witnesses lose their privileged position and no one trusts them ever again) with only a (hopefully short) service disruption as the effective consequence of the malicious attempt. This, however, assumes that the exchanges did not follow the malicious witnesses to the "invalid" blockchain. Of course there is no reason to think why the exchanges would do such a thing, but if they had, then anyone withdrawing STEEM or SBD from that exchange after that hardfork could potentially lose money. Of course, if the exchange was malicious enough to collude with the witnesses and intentionally follow them through a malicious hardfork, then they could also just steal all the assets they held on behalf of their customers, so it is a moot point.

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biophil (66) 9 years ago

Actually, the hardfork would also probably need to disable (at least temporarily if not permanently) the malicious witnesses as well or else the malicious witnesses could just repeat the same process on the resumed chain before enough users had a chance to vote them out once the chain resumed.

Furthermore, it would be interesting to establish a social consensus ahead of time that said it would also be justified not only to disable the offending witnesses, but to confiscate and destroy their funds. This would be wildly controversial, but would be an additional deterrent to such collusion.

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