The Facts

https://cdn.steemitimages.com/DQmYBNJ2NawzDmtiGrxPr7Ko69FGTBsfRdfSo86uxy4KfTx/man-156786_960_720.png

https://steemitimages.com/DQmXA9RBqr2qRTbWpcnvGDv38v9v6gak6WotkLMMUZxeERk/hr_thin.png

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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Comments
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  • @amico

    @tipu curate


    A huge hug from @amico! 🤗

    !trdo

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  • @sketch17

    Thank you for the info, i was not not uptodate with the recent events on steemit.

  • @cryptopie

    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.

  • @irgendwo

    Finally i can read an objective post about the happenings....

  • @raycoms

    Logic:

    Your story is this:

    I took my son to a doctor, because he had trouble breathing. After the medical treatment my son could breath freely again.

    Thus, you left out crucial details about how things came together.

    1. Justin Sun not only announced some marketing things for Steemit! (Not Steem, Steemit!). But he also announced things like token-swap and taking all Steem dapps to tron smart contracts.

    2. Witnesses tried to contact Steemit to get in contact and get relevant information.

    3. Only then the softfork was decided.

    4. Community could've voted out these witnesses if they were against the softfork (this did not happen, on contrary, witnesses against the softfork were voted out).

    5. "External Security Experts". You mean Ned?

    Edit: 6)

    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.

    It seems you got no idea about how DPoS blockchains work. Any consensus node can decide to "block certain transactions" at will in any blockchain (same applies to PoS and PoW).

    Thus, if in DPoS a super majority blocks certain transactions to be included in blocks, the stake is practically frozen. This cannot not exist.

    Edit2:

    If in Bitcoin a few of the biggest mining pools decided certain transactions to be invalid from now on this would also lead to the same outcome.

  • @trafalgar

    This account of events is somewhat more favorable to Justin Sun than what I would deem to be completely neutral

    However, given the absolute torrent of filth flowing out against him lately, I'm not hesitating for a moment to upvote this

  • @kramgelo

    Sun just show he did not like being frozen,maybe he buy Steemit Inc. in "good faith". He just show his power and what he can do being Who he is. He maybe a treat to this decentralize community, but also he have huge potential to bring this Steemit to another level.. what was happen is just a good learning curve in achieving a true decentralize community... Steem On.✌

  • @joeyarnoldvn

    Did crypto exchanges not steal Steem from their users to vote for witnesses? Is that not theft?

  • @coinchaos

    The fact is Steem witnesses tried to maintain centralization on Steem, Justin Sun and Tron said no no no bad little invalid witnesses. I am coming in and I know a lot more than you!

  • @jeenger

    I agree with your conclusion

  • @okean123

    JS started the aggressions by announcing that he's going to move Steem to Tron. There's nothing that could be misunderstood in that.

  • @aschatria

    Have you forgotten a part where the exchanges should not participate in his sham because what they have done is illegal??? And the part where it says that blockchain consensus is coded rule of engagement and witnesses do not need to approve transaction?

  • @discernente

    Come on, two wrongs don't make a right. Even if you consider what the consensual witnesses did to protect our community was 'wrong', what Justin Sun did was definitely indefensible.

    Posted using Partiko Android

  • @bluerobo
    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

  • @abitcoinskeptic

    I, like Justin see this as an issue of public vs private (personal) property. Justin argues it is private property.

    Private property is a legal designation for the ownership of property by non-governmental legal entities.[1] Private property is distinguishable from public property, which is owned by a state entity; and from collective (or cooperative) property, which is owned by a group of non-governmental entities.[2][3] Private property can be either personal property (consumption goods) or capital goods. Private property is a legal concept defined and enforced by a country's political system.

    https://en.wikipedia.org/wiki/Private_property

    It is taken from here:

    Private property cannot exist without a political system that defines its existence, its use, and the conditions of its exchange. That is, private property is defined and exists only because of politics.

    So let's imagine that Steemit INC is registered in the USA and controlled by the laws of the USA. The corporate entity Steemit INC was legally transferred from Ned to Justin accordingly.

    To continue, we should replace "country" with "blockchain" because a blockchain is not a country.

    That means the witnesses or Steem are bound to the laws and political system of the blockchain and not USA or some country.

    I would argue that it is up to the political system of the blockchain to define personal/private ownership vs. public/collective ownership.

    Since the Steem government is the consensus witnesses, in theory, they are the judges administration and legislation. They rule the Steem realm as an oligarchy or narrow republic.

    Steemit Stake has been determined to be 'collective' or 'public'. This is not unprecedented or unexpected.

    Worries about the sale triggered 'exercise of state authority'.

    You are right, should they be able to rule? I think as the chain becomes more decentralized we should take away some rights, or add more consensus witnesses. However, that's hardly the discussion to be having now when doing this will make Justin the sole authority to determine the ownership of the Steem that has been determined as 'public property'.

    (edit: forgot the essential first "," after I >.<)

  • @mattsanthonyit

    You nailed it on the head @steemchiller

    Posted using Partiko Android

  • @offgridlife

    Nope....

    B97FF5F1-E599-4B76-BBA2-008CF40A7664.png

  • @luegenbaron

    I care about my assets/ funds

    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.

    Since when is it legal to use customer assets without ever mentioning anything in that direction. And more.. To stake it (lock/ freeze) and now lying by telling me the Wallet is in maintenance. You basically tell me, stealing assets from their customer is okay now.

    A ninja stake is also a feature, which clearly shouldnt exist in a decentralized blockchain.

  • @whatsthatcryptom

    Great article @steemchiller! Finally, another big voice that speaks the truth. Hard to express your feelings and come with real facts these days. You got my respect.

    1. Acknowledge witnesses made a mistake
    2. Respect another person's property
    3. Don't feel buthurt because you got rekt by the big 4.
    4. Swallow your ego and allow them to get their stake back. ASAP
    5. The community gets his elected witnesses back
    6. Life goes on, why worry?
  • @toofasteddie

    Dear @steemchiller I appreciate your efforts in order to release the tensions here but, please, do not forget to add in the chronology of the events how Justin announced important points to take into account as Token-swap or migration of Steem DApps to the tron ecosystem. The post you wrote is good but doesn’t include all the important points. I agree with you that the softfork was deployed without asking the community neither at that is also bad, but, tell me, how would you handle a similar situation if the questions from important steem stakeholders are unable to be answered by Justin and he keeps announcing bad messages about a steem migration?

    COMMUNICATION by one side is failing continuously and mainly on TRON’s side.

  • @pele23

    A reaction out of fear is always a dangerous one...

  • @norbu

    Your reading of 'Facts" are half baked and shrewdly written to take a side and is not totally neutral. Please refrain from creating more FUD as we need to get over this with a cool head. But decentralization, stays!

  • @sheikh27

    Justin sun make a big hipe just buying steem inc, but failed to won steemians hearts just try to rule over his foolish few steps, now he try to back steem old regulation, hope everything will be fine with in future!

    $trdo

  • @miti

    @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.

  • @jaydih

    Finally. Happy to see something straight out of fact. This post must deserve resteem by many.

  • @glory7

    Thank you for the nice writeup.

  • @blacklux

    You totally forgot the fact that Sun mentioned several times "token swap". That triggered the soft fork. Also you forgot the ninja mined tokens that was supposed to be used to help the development of the community. On top of that you totally forgot that exchanges took the steem of their users without their consent to take over the witnesses spots and now binance had to admit publicly in many crypto news and blogs it was a mistake. Maybe our witnesses acted a bit quick trying to protect the blockchain, maybe not cause this is not the first time Sun does a witness take over but saying the witnesses are the ones who put us in this situation is wrong. If you gonna take a side, take the side of the community cause you're part of it.

  • @test45

    Finally someone on point! Justin Sun only had 20% , thats not a majority. That makes him a big whale! It was not necessary to freeze( hack) his account.
    Can someone explain why the witnesses claim the Over 12 million dollars of suns new legal property really belonged to the blockchain development and not have any legal documents to prove it. Also did blocktrades use his his customers funds for voting? Also can anyone estimate the amount of stake the voting bot accounts control ? Also their influence with the witnesses? This is looking more like the witnesses where more worried about their own personnel influence. They took out a big whale to protect their own whales. If you where Justin SUn and this happen to you would you act any different? I agree with Justin sun that the protection of your account is #1 . The witnesses destroyed that, and cant even back it up!

  • @mehta

    Excellent post! I like the matter explained neutrally. Lovely........

  • @tobixen

    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.
  • @vikisecrets

    Point 0 is missing: Right after the takeover JS/Tron threatened the whole chain with a migration of Steem + DApps (which he doesnt own) to migrate to Tron and doing a one-sided token swap. This caused a lot of irritations and fear in the community and led to the whole fiasco in which we are right now. Source: https://steempeak.com/steem/@aggroed/justin-sun-tweeted-again-is-it-time-to-panic-is-it-time-to-celebrate

  • @freiheit50

    I don't know all facts. And I believe nobody does. From my liberal point of view two actions never should have happened:

    First, freezing anybody's assets. Second, taking and using foreign assets for any purpose.

    These two points are strongly against the law of property. Blockchain should always always always guarantee its inviolablity!

    I wish so much we could overcome together this turmoil! Lets come to a win-win agreement between the witnesses and Justin and bring this platform and the value of steem forward.

  • @buttcoins

    While not completely neutral. I find this at least moderate. Far to many vicious and unnecessary voices coming out of the woodworks. This thing has released a troll nature.... now many people cant see past the pitchforks.

  • @sm-silva

    1º It all started when Tron and Justin spread information about Swap Token. 2º Witness with fear that happen and Justin try destroy the blockchain for that tried protect the BlockChain with 22.2 soft-fork temporary! 3º Some peoples took advantage of the situation and started to discuss about wipe Steemit Stake or something like that... 4º Justin knew than if he does nothing he would lose the stake, he then decided take action with Exchanges and took the 20 witness spots 5º The Devs decide don't go against the community and resigned! 6º The witness removed the 22.2 soft-fork temporary.

    But think on the positive side, steem gained visibility on several sites and some channels on youtube. And the community got more strong!

  • @avare

    Good article. Thank you $trdo

  • @bil.prag

    i don't downvote often and not that my downvote means anything, but even you probably want to be neutral, you skipped some facts and ignored them when presented, so this should not be in trending.

    The fact you skipped is constant official Tron Foundation posts on social media (also one exchange that is owned by Justin) that were writing about swapping Steem coin for Tron token, and migrating Steem blockchain to Tron blockchain. If they did that it is the end of Steem blockchain so you can say it is an imminent threat. Would exchanges get involved to stop that?

    In witnesses talk with Roy (tron representative) 2 days ago, One of the witnesses that contacted Roy before stated that he tried to contact him and Justin for 10 days and was ignored. Roy acknowledged that he got that messages but he missed them as he gets a lot of messages. He said he seen them later, when the soft fork was implemented. (it is a shitty excuse)

    The initial plan for tron was exactly what they stated publicly on their social media, but they had no idea what they bought. Maybe the plan changed later but their social media was not showing that.

    Decentralising by giving power to One man is an interesting idea of decentralisation. maybe i don't understand the definition of this word as english is my 3. language.

  • @fleur

    I agree with your take on this. The witnesses did not consult with the Steemit community before freezing Sun’s assets. There has also been a little anti Chinese sentiment creeping in to some posts I’ve read which concerns me 🤔

  • @hobo.media

    This post is insane, you miss a lot of details in your breakdown of the situation.

    You also fail to realize that exchanges have no right to use the STEEM they are holding for traders.

  • @stoodkev

    Someone is still pissed about the SPS ^^ Your 'facts' are so wrong I don't even know where to begin, I ll let others take care of it.

  • @therealwolf

    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?

    Untitled1.png

  • @adetorrent

    Are these protest votes then? You seem to be voting for at least 4 of their faux witnesses.

    Screen Shot 2020-03-07 at 16.45.43.png

    Obviously you can vote for anyone you want, that's up to you, but I hear these are all running on the same server. That's not really what you want for Steem is it?

  • @freebornangel

    Steemy!

  • @rondras

    I love Steemworld and I think this alone is worth supporting you - no matter the quality of what you write. But with this post I disagree so much, that I even downvoted it...

  • @tyramisoux

    The worst part of it: This so called "Soft Fork" revealed "features" of this "decentralised" blockchain that gave me the creeps. If a hand full of people are able to freeze stake the governments and/or secret services are also able to do this (or force them to do). It should be not possible by design. That's NOT how it was supposed to work.... (well, for posting cat-pictures this should be fine)

  • @mmmmkkkk311

    @themarkymark I see your upvote. Do you agree with all of this? Do you agree with this:

    The exchanges did their best to help keeping Steem decentralized and this could only be done with such a drastic action

  • @valued-customer

    By ignoring prior acts, relevant statements of Sun, and other data, using pejorative language, and rank insinuation, you have completely mischaracterized these events.

    "The exchanges did their best to help keeping Steem decentralized..."

    By stealing their customers funds, using them to govern the Steem blockchain instantly, and handing that power to a single entity. No. What they did was utterly centralize Steem.

    You are either abysmally ignorant of the meaning of the term decentralized, or a liar.

    Thanks!

  • @techcoderx

    Congratulations, you have found a comment that is not a spam!

  • @ew-and-patterns

    I am shocked that you are voting for this guy! It seems to me that you don't understand the context at all.

    Exchanges had no idea that sun powered up their stake. CZ from binance thought it was just a normal hardfork that he should support. First Ned screwed over Sun by not disclosing all the details. Then Sun screwed over the exchanges. He lied to his friend CZ and other exchanges as well.

    Our witnesses did a temporary safety freeze because they were for 9 days trying to reach out to tron team without any response.

  • @palikari123

    Thanks for this post. I think I learnt something new today.

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  • @test45

    It definitely says something when you question the witnesses on why the need to freeze Justin Suns accounts, you get downvoted by bots and put on Blacklists . Im 100% behind Justin now because we have nothing to loose. THe witnesses have centralized with whales, voting bots, and markymarks facist black list. Im proof. I just asked questions. Boom! reputation negative, comments hidden, black list. Wow? THis is free speech? Its time the community speak directly with Justin sun and hear him out. THe community support is based on censorship. I witnessed it first hand .