Steem, Hive and the Hard Lesson of Social Agreements (Non-Blockchain-Enforced)
In light of the recent Steem and Hive fork/drama, and specifically in relation to the socially agreed-upon use of “pre-mined” stake that Justin Sun now has ownership of, it has become more clear that the problem with social agreements being used to govern a blockchain is that eventually those agreements will get broken, just like in the real world.
A little history: What Justin Sun bought was previously deemed to be a "community dev fund", as decided by Steem founders Dan Larimer and Ned Scott, since the beginning of Steem. The agreement was that these funds were not to be for personal use. More recently (and years later), Justin Sun purchased 30% of the entire Steem supply from Ned Scott, but did not uphold the original agreement.
This teaches us that once the ownership of an entity passes into new hands (or if an existing owner becomes corrupt), unless the laws are immutable, those social agreements are subject to change by the new leadership.
This is why I firmly believe that all rules must be coded in at the blockchain consensus level otherwise they will eventually fail to be enforced, like we just saw with Steem. It’s unfortunate, but that is the entire reason that the technology of "blockchain" was created: to provide immutability, both with money and with contracts.
Off-chain agreements (in life and in crypto) have historically proven to be broken. It’s just a matter of time.
That being said, my heartfelt sympathies go out to those on Steem who have endured the costs in both terms of time and money due to this broken social agreement.
Ironically, this is the same pain that birthed technology of the Bitcoin blockchain. Government entities could not be trusted to maintain the social agreements that dictated the policies of money and currency creation. And thus, Bitcoin was invented.
In a way, what happened to Steem was inevitable. It was just a matter of time. The flaw was relying on a non-blockchain enforced social agreement in the first place.
The Hive blockchain has (at last) corrected this flaw in Steem by removing the weak point of relying on a social agreement.
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I covered the Steem and Hive split in my recent video as well, starting at the 10 minute mark:
