The Steemit drama that had the whole community in an uproar finally got an epilogue. The majority of Steemit witnesses disapproved of Justin Sun’s involvement in their favorite platform. Thus, the new decentralized blogging website was born on Friday, March 20th, via the Hive fork.
The Short Background of the Hive Fork
As CoinSyncom reported, Justin Sun basically acquired Steemit by buying the founding account on the platform. Thus, effectively, becoming the network’s whale. After a major disagreement with the platform’s heavy hitters, the founder of Tron went to a head-on assault on Steemit’s establishment.
After a series of accusations went back and forward, the thing fell apart when Steemit witnesses attempted to limit Sun’s power through a soft fork. Naturally, the new whale disapproved of the move claiming that it was hackers who tried to attack the platform. In his move made to reclaim the power, Sun got the support from Binance, Huobi, and his own Poloniex exchange. The support was of such nature that these centralized trading platforms used their client’s STEEM to vote Sun’s new-found witnesses into power.
The Birth of Hive
Of course, the community went berserk. We didn’t have to wait long for the answer. In a previously announced move, the Steemit community hard forked off the STEEM blockchain to establish a new blogging platform, Hive, on March 20th.
Regarding the fork, Hive.io officially stated:
“The intention of this community-driven fork is to support and build on the strong Steem community values that have made our ecosystem so diverse and exciting. This new direction steps away from the burden of the Steemit Inc. ninja-mined stake, which has impacted the long term ability to work towards further development and decentralization for years.”
The snapshot of STEEM blockchain secured that Hive users get the new Hive cryptocurrency with a 1:1 ratio with STEEM. To claim Hive, STEEM holders have to access their Hive wallets with their private keys.
Those individuals who held their STEEM on Binance and Huobi exchanges got their Hive coins automatically. If you wonder how come that these two companies supported the fork, read on.
The Ninja-Mined Stake Induced the Hive Fork
If you are wondering what “Ninja-mined stake” means, here is a brief definition. The ninja-mined stake was the (huge) amount of STEEM mined at the very beginning of the network by the Steemit account. Simply put, 100 accounts ended up holding 93% of the STEEM cryptocurrency. If you don’t see the issue here, we can’t help you.
This allowed the takeover in the first place. Despite all that STEEM not being used to exercise the control over the platform, it always had the potential to do so. In other words, it was a giant lurch in the decentralization of Steemit. Therefore, once Sun acquired the Steemit account with such a huge chunk of coins, people began to worry about the future direction Steemit would take.
Now, let us mention those centralized exchanges and their incentives.
The Sudden Change of Heart
After the initial support for Justin Sun’s takeover, Binance and Huobi took it all back. After the majority of Steemit community loudly disapproved of Sun’s hostile takeover and exchanges’ interference, trading giants decided to take a “U” turn.
In the official announcement published on March 20th, Binance and Huobi announced the support for the fork. However, it was late to fix the Steemit problem. Yet, the exchanges never offered the official explanation about the reasons for supporting Sun’s takeover. Therefore, we are going to try to explain what really came to pass.
Since these centralized entities don’t really care for the decentralization (otherwise they would be decentralized), they decided to utilize their users’ funds to help Justin Sun. To deduce their initial reaction further, let’s just say that Sun, as a founder and owner of Tron and BitTorrent, is a person they want to be tightly connected with.
However, something happened that exchanges did not expect.
The Power of Masses
Once the community stood up against the takeover, exchanges began to wonder if their businesses would suffer because of their initial stance. In the end, they do make a living off traders, don’t they? Therefore, the CEO of Binance, Changpeng Zhao, took to Twitter to express his confusion caused by the Steemit ongoings.
This was the first step towards distancing himself from the cancerous move by Sun. However, the popular CZ never explained why his company took upon itself to use clients’ funds to vote for STEEM witnesses. Instead, he stated that he doesn’t want Binance’s STEEM holders to be banned from voting by a possible fork.
In truth, the one who would make Binance users unwanted voters was CZ, as he used their funds without their consent.
At this point, CZ became worried as he realized that the spotlight might turn on him. This would, of course, prove to be unhealthy for Binance. Therefore, he decided to put the profit in front of the friendship and switch sides. As a result, we have Binance supporting the Hive hard fork. Naturally, this means more business for the exchange since STEEM holders will have a new token to trade on Zhao’s exchange. More trade = more profit.
STEEM Surged 250% Before the Hive Fork
Since the announcement of Hive, it was obvious that STEEM holders would get the new cryptocurrency at 1:1 ratio. Naturally, investors flooded in to acquire some STEEM. As a result, STEEM skyrocketed by almost 250% in relation to Bitcoin (BTC).
As it is visible on the chart above, STEEM dumped heavily as the sell-off began immediately after the snapshot took place.
Hive’s Childhood Ailments
Besides pushing the price of STEEM to the moon, the Hive launch, while widely acclaimed, didn’t go through without some initial hiccups.
The Name is the Problem
The first and biggest issue is the name that developers dubbed the new platform. The matter of the fact is that HIVE Blockchain Technologies Ltd. holds the legal right to that name. According to the company, HIVE Blockchain Technologies Ltd. owns cryptocurrency mining facilities for Ethereum and Ethereum Classic mining since 2017. In their official announcement published on March 23rd, the company stated that they requested a cease and diciest order from the authorities for Hive fork.
Thus, Frank Holmes, Interim Executive Chairman for HIVE stated:
“We are a strong supporter of innovation within blockchain technology, and we have no issue with the proposed blockchain beyond its name, nor do we have any opinion on its reported dispute related to STEEM. However, for legal reasons, we have no option but to seek to protect our interests, dispel the ongoing confusion and avoid any potential damage to our reputation. We are hopeful this can be easily resolved with a name change. Any continued usage by the Blockchain will only evidence an intentionally predatory, misleading and fraudulent strategy.”
Regardless of HIVE Blockchain Technologies Ltd., Binance distributed Hive coins. This is somewhat strange since Binance usually does business in accordance with all the legal wireframes. The HIVE Blockchain Technologies Ltd. announcement came a day before the fork took place.
How the Hive fork will react to the possible litigation remains to be seen.
The Publishing Rights Issue
Furthermore, when CoinSyncom accessed the Hive blog with the intention to congratulate on the successful launch, we were denied for not having publishing rights. Nevertheless, as our readers can see, it seems in the link, the development team resolved the issue and we were finally able to express our best wishes.
Otherwise, composing an article on Hive is much similar to Steemit. The markdown is the same as well as the ability to distribute rewards. More than a few options and sections of the platform are still inaccessible. Yet, it seems that the development team works day and night to launch the platform in its fullness.
Another issue, which could be foreseen, is with wallets since it will take some time for the Hive team to make them useable for the new cryptocurrency. Other than that, Hive is already useable enough to start blogging. Give it a shot.
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