The Facts

in #steem4 years ago

In this post I summarize what happened on the Steem blockchain regarding the so called 'hostile takeover' in the recent weeks and what exactly brought us into the current situation. I try to be as neutral as possible and let the facts speak for themselves.

Laws are not based on opinions, therefore it is time to overcome the inner devils, stop fighting each other and see the facts clearly for what they are.

I am aware of the fact that there have been decisions made based on assumptions and fear by some community members and witnesses, which I do not include in this summary, because I want to focus on the major (relevant) points in order to be able to present you a clear picture of the situation.

Logic


As many talks and actions of defence started to become childish, I need to explain one important thing at the beginning:

'B' comes after 'A'. Same goes for the number '2', which (when counting forwards) always follows to a smaller number, for example '1'.

Example (for children)


The following statement makes sense:

I took my son to a doctor, because he had trouble breathing after he was stung by a big hornet. After the medical treatment my son could breath freely again.

While this statement does not make sense:

I took my son to a big hornet, because he had trouble breathing after he was medically treated by a doctor. After the hornet stung him my son could breath freely again.

Summary

Point 1

Justin Sun (@justinsunsteemit) buys Steemit and informs the Steem community about his goals to make Steem more successful by prioritizing marketing and caring about good relationships to big crypto exchanges. He states that he does not intent to get involved into voting witnesses or changing Steem's existing consensus rules by using his acquired stake.

Point 2

The majority of Steem's top/crucial witnesses decide to programmatically freeze the new owner's accounts by installing a new Steem version on their servers, that can be run immediately without applying a hardfork. This so called 'softfork' (SF) can be activated instantly without even informing the Steem community about it and it contains the code to block specific blockchain operations for Mr. Sun's accounts.

Point 3

Justin informs the existing Steem exchanges about the fact that his Steem accounts got hacked (funds got frozen) and that the crypto world needs to work together to regain access to his funds and to prevent those 'hackers' from getting away with it.

Point 4

External security experts come to the conclusion that the best way to counter the 'hack' is to stake (Powerup) a large amount of STEEM, so that temporarily created 'dummy' witnesses can get voted to the top of Steem's witness list to be able to run an own softfork, which reverses the changes of the 'hackers' installed softfork. Relevant exchanges therefore begin to powerup their existing STEEM tokens and vote for the created 'dummy' witnesses.

Point 5

As long as nothing can ensure that no additional accounts can be 'frozen' over night with another softfork by those 'hackers', the created 'dummy' witnesses will stay active and prevent further dangerous softforks.

Conclusions


Pretending to be a victim does not erase previously taken actions. The exchanges did their best to help keeping Steem decentralized and this could only be done with such a drastic action. It should be clear that the exchanges are not to blame for the current situation.

The witnesses ability to freeze someone's account over night without even talking to the community (which elects them and gives them their power to do so in the first place) clearly is a feature that should not exist in a decentralized blockchain.

My personal conclusions will follow in an extra post.


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  1. Justin bought Steemit Inc, not Steem
  2. Witnesses tried to communicate with him but received no response
  3. Justin tweeted about token swaps. Again, he bought Steemit Inc, not Steem
  4. Justin used a TRON stake which was promised to not vote for Block Producers for exactly that
  5. Steemit has a similar stake that was promised to not vote.
  6. Witnesses decided to safeguard the decentralization of Steem because a similar action was to be expected and no communication could be established
  7. Justin told exchanges about a hack and promised special upgrades for them
  8. Exchanges powered up customer funds to interfere with Steem governance
  9. Justin sent payments to these exchanges

That is how events have unfolded before my eyes.

I would be happy to learn if I left out facts or got the chronology wrong

This is absolutely correct. The fact that steemchiller is purposefully leaving out facts is beyond dishonest.

It shows without a doubt who is in the right here.
THOSE THAT DO NOT LEAVE OUT FACTS.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















Witnesses came together and protected the chain in kind of an aggressive move, but I think it was necessary in order to show the world that no one can buy the Steem blockchain and make changes to the core without talking to the existing team of reliable block producers. They were not here for years just for fun and they won't give up their dream of a decentralized, fast and stable running blockchain that easily.

This is an excerpt of your post which you wrote after the SF took place and in which you explicitly expressed that you were in support of the SF.

https://steempeak.com/steem/@steemchiller/the-good-thing-is

But now, you're condemning those actions?

Bist du ein Grashalm im Wind oder kannst du dich nicht entscheiden?

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He's allowed to change his mind based on how things have progressed since that time. Which I think most feel the same way. At the time of the SF most were hopeful (but not confident) that it was the right move, now it is looking very much like it was not.

definitely it was not: Who will ever again trust in die blockchain?
I don't care who is right or not but I am worried about a "decentralized blockchain" where my assets could be frozen and/or control can be taken over by one guy.
This should be not possible BY DESIGN so we have other problems now.....

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















Witnesses got spooked by Justin Sun's plan like that token swap which prompted most of them to take actions to halt that "plan" among other things @steemchiller.
Plus the fact that Justin Sun colluded with three major exchanges to power-up steem of their customers just to help him vote Justin's puppet witnesses verified his threat potential in centralizing steem platform.

Justin colluded, AKA stole money.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















he did not steal money or Steem.
Why you would say such a thing is beyond my comprehension.
Some exchanges powered up customers Steem and they will get it back sooner or later. What they did is not good but accusing Sun of theft is inaccurate even if it is a populist stance.

At least one of the exchanges denies customer transactions were impacted at all.
I can not be fucked finding the link again but if i stumble over it I will pass on the link to you if you like.

Exchanges did that but they shouldn't do that. Yes, banks do that this too for many decades now. But it is still theft. Yes, it is normal for banks to do. It is normal but it is also wrong. It is theft. Yes, some people call it not theft. But it is theft. You may think it is not theft. But technically, it is a type of theft. It is simply not the kind of robbery that you are thinking. It is indirect perhaps. It is different. It is a different type of theft but still theft nonetheless. Banks should not do what they do. This all went downhill especially in 1913 with the beginning of the Federal Reserve for example, if not longer than that as well. Look at the history of Rothschild and others. Follow the money. Look at what happened in 1933 and 1871 and 1695. It goes on and on and on. Look at the different people and look at what they did. It is a long story that had been going on globally for centuries or longer.

"Some exchanges powered up customers Steem and they will get it back sooner or later."

LOL clearly not YOUR money, or you'd be first in line to bitch about it being stolen.

You got some crystal ball that lets you see the future and how we all ride off into the sunset with our money?

No?

Didn't think so.

I saw a good explanation as to why it can be considered theft. That got me thinking about a car I had that was stolen. I got it back and it was not damaged in any way, but it was still stolen.
So in light of that I changed my opinion.

My thinking at the time was that people will get it back. I have read stories about exchanges that have closed up shop and people lost everything they had in the exchange permanently !
Hopefully that will not be the case here.

At the time when i was making comments about not being stolen, I did not conciser the Steemit inc funds stolen ether. But in light of the above, maybe there is case to be made that it was stolen? I dont know

Presently I am informed that Binance and Huobi are powering down, so it does appear that they will be in a position to return the funds taken from their customers. Huobi has directly stated it will not use it's customer funds so again. Binance has apologized, but I am not aware of a direct statement from them they will not use their customer's fund likewise again. I hope the market keeps that in mind.

Stealing, as you point out, is taking someone elses stuff and depriving them of it. Even if the thief gets caught, or has a fit of remorse and returns the stuff stolen, the theft still has occurred.

If Binance and Huobi return their customer's funds, that will be good, and the right thing to do. I reckon they have still caused those clients financial harm in several ways, and expect that some of their customers who have suffered that harm will seek recompense. I do hope the exchanges justly compensate them, instead of forcing those injured parties to seek remedy in court.

Yes i listened to an interview with the ceo of Binance and he said that no customers funds were delayed . I am not sure if that is true but he did say it. That was a day or two ago. He also said that the next time they receive such a request they will actually do some due diligence.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















First of all - the wasp and doctor example seems like a misfit. I can understandthat there may be different opinions on what party is trying to do a "hostile takeover". To me, it seems more like the situation where one child takes a toy from another child, and the other child tries to "fix" the problem by beating the first child.

I came late to the party and haven't paid attention nor done much fact checking. My initial thought when reading about the aquisition was ... "this could be bad, but I hope it's good". Well, now things have turned sour and it's hard to imagine good outcomes anymore.

I think it's important to stay rational, consider both sides of the story with an objective and neutral mind. I also think it's important that the steemit.com site won't split with the community - never underestimate the network effect, in case of a chain fork, both of the chain partitions will stay significantly weaker than the parent chain - both steemit.com and the Steem community have a lot to lose and not much to win from such a split.

The decision to block transactions (including change of witness votes) for the SteemPower held by SteemIt may have been dubious, and can be seen as a hostile takeover. I can somehow understand that the exchanges got on board if Sun have been telling them a good story; it's both in the interest of the exchanges, the community and the token holders to avoid "hostile takeovers".

Now what was the need to block those funds - did steemit have more than 50% of the stake? Was the Steem "democracy" built upon a gentlemans agreement that SteemIt would never abuse their power? In that case I can fully understand why the other witnesses decided to temporarily block SteemIt from doing what they deemed to be a "hostile takeover".

When some conflict breaks out, it's important to from the very start talk together, try to understand each other and discuss compromises - but the instinct often seems to be to retaliate fast, hard and swiftly, hence escalate the situation. The exchanges seems to have been doing a bad job doing fact checking and community outreach.

  • Using tokens deposited by customers to support one part in a conflict, without consoluting the de-jure token owners ... not a good idea.
  • Since it takes 13 weeks to fully power down, this also was a very risky move. What if the customers would try to withdraw their tokens? Such a move makes it even more likely, as some disgusted customers would be likely to want to withdraw funds, power up and vote against the exchanges.
  • Possibly to keep up with promises given to the exchanges, now the Tron folks are begging for a quickfix allowing the exchanges to power down quickly. Changing the rules of a blockchain just so one party can keep up some promises given to another party ... I have no words for it, that's really a taboo, blockchain technology is not supposed to work like that!
  • Perhaps the exchanges didn't understand the concept of locking funds - or perhaps they were promised a quick protocol change to unlock the funds once control of the chain had been regained. I'm not sure what is worse.
  • A quick look, and there are like twenty witnesses on the list that are running the new potentially harmful .5-release, none of them have bothered filling out an avatar nor a one-liner ... I did a quick look into one of the witnesses and found no witness information at all. None of the old, regular witnesses runs the .5-release. To me, this is a pretty clear indication that whomever is running the .5-release of the software is trying to perform a hostile takeover.

To me, this is a pretty clear indication that whomever is running the .5-release of the software is trying to perform a hostile takeover.

THIS.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















None of the sockpuppet witnesses running 22.5 have updated price feeds even once. The issuance of SBD is whack, and it'll keep getting worse as long as Tron keeps governance from being undertaken by the community.

It's starting to fuck our money up, and we should be consulting counsel as a result. I don't expect polite requests to remedy the tort Tron is causing to produce results, since no other requests have produced any of Tron to date, including repeated requests to update the price feeds.

Lawyer up folks. This is gonna hit you in the wallet.

I seriously don't think any lawyer will be able to fix this mess - and the whole idea of involving lawyers and courts does not sit easy with most people in this community, "code is law". Perhaps it's a flawed idea to let the witnesses tell what they believe the USD-value of Steem is (or what they want it to be) without any kind of commitment.

Seeking a remedy is not necessarily fixing anything. It's just being made as whole after being broken as close as possible.

Maybe the idea is flawed. However, the system is set up for the price feeds to be updated, and when they're not, the Steem blockchain goes awry. What do you think is in control of rewards, SBD conversion, SBD printing, and payouts? The price feed.

It needs adjusting. Seeking redress of a tort is only necessary because assholes do you harm. Know a better way to get compensated for being harmed? Do let me know please.

The real WTF was probably allowing this "ninja mined stake" to exist without any safe-guards against malicious usage.

It's to be expected that many token-owners won't vote, it's to be expected that many token-owners will have tokens on the exchanges without bothering about it, but totally unexpected that the exchanges (except poloniex) would partake in such a move without doing proper due diligence.

The price feed is an average of the price set by witnesses, right? Or is it the median? It ought to be the median - in which case 20 witnesses reporting the wrong value won't skew the price too much.

If it's the average, a work-around could be that the active witnesses would count a bit on it and also report wrong values, trying to get the average right.

"It ought to be..."

Well, now that you've chimed in, I'm sure everything will be alright.

You don't even know what the price feed does, or how it's used. Why even have an opinion if you know damn well your opinion is utterly insipid and without value of any kind whatsoever? Oh, you're shilling for your preferred overlord, and that's the point of posting your meritless opinion on price feeds.

STFU.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















@steemchiller, this is very disappointing! What's that, newbie's talk?
The Steem DECENTRALIZED blockchain worked exactly like it was supposed to... with the consent of the community.
In fact, at any time community could've voted out witnesses with a conduct contrary to the principles of this blockchain.
But this did not happen and indeed they have had a greater consensus from the Steem Community to the detriment of those who tried a hostile takeover.

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.




















the wider communities influence over the top twenty witness selection is virtually non existent.
The witnesses are controlled by a handful of accounts.
steemit only has the appearance of decentralization. In reality it is an oligarchy

I don’t think a person that at this point still confuses STEEM and steemit deserves a detailed answer.

LOL You seem confused.
Your reply is hilarious because even using Steem would not be that great, a better term would be 'Steem Blockchain' in many videos people refer to it as the Steemit Blockchain and nobody cares.

If you are unable to defend your own argument its better just not to respond.
Better to be thought a fool than to respond and remove all doubt

In fact you have removed all doubt.

the wider communities influence over the top twenty witness selection is virtually non existent.

A little hint:

hint.jpg

then try with fake witnesses: where do you see a community consent?

Thanks for sharing the wonder of SteemPeak that is really cool. I had only had a quick look previously

Anyway, you are ether confused or deliberately twisting what I said. I know that crap works on so many people so I guess its worth a shot.

What I said was that it is only a hand full of people that determine who gets into the top 20
We all know people are stupid, just look who got elected into office in the US. The key difference here is that we have Stake based voting for witnesses. Not one person one vote. Its an oligarchy not a democracy.
If it were a democratic system Sun would not even be able to get one witness into the top 20 lol

The system is deeply flawed

Thanks for sharing the wonder of SteemPeak that is really cool. I had only had a quick look previously

Well, at least our little talk made an impact. :D
Other than that, you and I take a different view on that one.

The takeover occurred after the freezing of his account.

There was no need to do it before.. but this circumstance has shown his true intentions.

Consent of community? THe witnesses did not talk to the community.

Witnesses who had supported the SF could be removed by the community, but the opposite has happened. I repeat, they have had a greater consensus from the Steem Community on the occasion of the second SF (0.22.5).

REAL FACT: @justinsunsteemit TOOK ADVANTAGE OF HIS CONNECTIONS AT POPULAR EXCHANGES TO LOCK USERS FUNDS IN ORDER TO VOTE IN HIS CENTRALIZED WITNESSES AND ATTEMPT TO TAKE CONTROL OF THE STEEM BLOCKCHAIN.