Steem hard forks and creates Hive
On March 20, Steem initiated a hard fork to introduce Hive, a new blockchain. Steem and Hive will operate separately, just as Ethereum classic and Ethereum are managed independently. #What’s the background of the hardfork? A hard fork is a radical change to a network’s protocol. A softer change, such as a software upgrade, is called soft fork. In February, Justin Sun, the founder of Tron, announced the acquisition of Steemit, the social networking app of Steem. Since then, Sun has had several conflicts with Steemit witnesses. Steemit witnesses are people who run the blockchain server. They equivalent to miners in other blockchain, such as Ethereum. There are 20 full-time witnesses at Steem, producing a block every 63 seconds. Since the takeover, Sun and Steemit witnesses have had several conflicts. The witnesses worried that Sun will use Steem tokens allocated to Steemit - approximately 20 percent - for his own benefit instead of for the enhancement of the blockchain exchange. As a result, the witnesses launched a soft fork, which froze Sun’s tokens to limit his power over the network. Sun wasn’t happy with the soft fork and ousted existing witnesses voted by the community and replaced them with his allies. In the process, big exchanges, like Binance and Huobi, supported Sun, voting against existing witnesses through their ownership of Steem tokens. The conflict between Steem community and Sun only intensified despite numerous meetings held. As a result, Blocktrades, one of the top witnesses at Steem, activated a hard fork to launch of new platform called Hive. #Why did the Steem price rise? On the news of Hive’s launch, Steem’s price started to skyrocket on several platforms. Steem, which used to trade at the 150 won level, hit 500 won on March 19. It is speculated that investors thought that the hard fork allowed the owners of Steem tokens acquire Hive tokens at 1:1. #What is Steem’s outlook? The fundamentals of a project and a blockchain's price don’t necessarily go together. After the hard fork, there seems to be a lot of issues to be handled by users of each community. First of all, most of the witnesses have gone to Hive, so Steem would need new developers to operate the blockchain. There is positive feedback from overseas users about the launch of Hive, which means that there will be an outflow of users at Steem. On the other hand, Hive will have the foundation and infrastructure provided by Tron.