Several weeks ago, Justin Sun made headlines due to a coup within the Steem Blockchain. Many members of the Steem community have abandoned the cryptocurrency since they foresaw Sun’s control over it.
It is impossible to understand this hard fork of the Steem blockchain without first understanding the events that led to it. Of course, this is a reference to Justin Sun’s attempted coup, which Binance and Huobi accidentally supported.
It all started when Sun acquired Steemit, a Steem-based micro-blogging platform, which also provided him with a stock of Steem that gave him enormous influence over the blockchain of the cryptocurrency. This caused fears within the community about possible measures that Sun could implement on the chain.
This is the reason why, some members of the community conducted an upgrade that froze Justin Sun’s funds, preventing him from using them to vote for changes in the blockchain. This caused discomfort to the cryptocurrency tycoon, who called the upgrade an “attack on private property.”
Sun immediately began planning how to recover control over his funds, which he did by convincing Huobi and Binance that Steem was under “attack.” To protect the integrity of the blockchain, it was necessary to vote for new super delegates within the chain, who would block the attackers’ initiatives.
This resulted in the mobilization of the funds of the users of Huobi, Binance, and Poloniex (Sun’s exchange). This would allow voting for the super delegates that Justin proposed within Steem, giving him full control over the chain. However, once Huobi and Binance realized the situation, they decided to withdraw their votes. They left Sun alone and forced a negotiation between the Steem community and Sun.
Changpeng Zhao on Steem’s Division
However, the negotiations did not go well, and Steem divided through a hard fork, which gave rise to the new currency Hive. Binance quickly listed it, which seemed to end the confrontation between Sun and the Steem sector who opposed his influence. This left the original blockchain in the hands of the founder of TRON and would create a new one for the others.
Unfortunately, this is not the end of it as has there is now a proposal for a new hard fork on the original Steem blockchain. If it runs, the balance in the wallets of various users will disappear, leading them to lose the money that they invested in the cryptocurrency. This has led Changpeng Zhao to write a text about Binance’s position on this.
If Binance upgrades its Steem wallet software after the hard fork, that will mean supporting the almost destruction of the savings of dozens of people. If it does not support it, Steem users on Binance will see their virtual currency assets frozen indefinitely, preventing them from withdrawing them from the platform.
Consequences of the Hard Fork
Unfortunately, this hard fork will result in Steem users’ loss of around USD 6 million. For that reason, Changpeng Zhao has offered Binance support for a pre-hard fork that can rescue these funds. However, this seems unlikely at the moment.
Many victims of this new hard fork are members of the community that supported the division of Steem and Hive, after Justin Sun’s coup. It seems that, despite the departure of many members of the community after Sun’s actions, the definitive solution to the conflict is still far from occurring.
By Willmen Blanco