When I wrote about how I am navigating the Steem situation the last time, I did not really anticipate to do a follow-up so soon. I intended to write about the COVID-19 virus today but I think I will write it tomorrow as the development on Steem is more time-sensitive.
Like the last post, this post is written from the perspective of someone who had devoted time and money to the Steem platform. As a common investor, I just want to protect my investments as much as possible.
What it means by this fork is that after 20th March, there will be 2 copies of the Steem blockchain. The new one will be called Hive.
In my earlier article, I anticipated the following:
- There will be a near-term liquidity crunch because exchanges powered up STEEM
- There will be a near-term STEEM price uptick
- A fork is inevitable
Am I right so far? Mostly, I think. STEEM price was ticking up prior to the sudden crash of the entire crypto market. As a result of the crash, STEEM had tanked against USD. However, there is still a 20% gain against BTC if you check the chart (2000 sats -> 2400 sats). Against ETH it fared even better, a 35% gain.
The main advice I gave previously was to withdraw STEEM from the exchanges immediately. This is largely because I do not want you to miss your airdrop when the inevitable fork happens.
With the fork announced to be on 20th March, you really have to make sure you have your STEEM with you in your account. This is because the new Hive blockchain will copy the entire Steem blockchain data over and you will have the same amount of HIVE as the STEEM you have in your wallet on 20th March.
What is going to happen next?
Sadly, I have more questions than answers at this point. What we know now is that there is going to be a fork and you will get your share of the new coin. Here are some important questions on the top of my mind:
[Update: Binance announced support for Hive coin]
For now, none of the big exchanges have announced that they are going to support this new coin yet. However, a small exchange called Ionomy gave its support.
What I think is likely to happen is that the bigger exchanges might adopt a wait-and-see approach. If there is sufficient traction in the new Hive blockchain, we should see a few exchanges honoring this fork. I am expecting at least one of the Korean exchanges (Upbit or Bithumb) to give its support. Outside Korea, I think Bittrex might be honoring this fork as well. Just a hunch, nothing concrete.
Communities & dApps
Another major question I have is where will the communities and dApps go? Unlike individual users who can choose to post on both chains, communities and dApps will need to pick a side. This is because it is operationally difficult or impossible to support both chains, especially for dApps.
Hence, they will likely have to pick a side. As of now, not many have indicated their preference publicly. But I understand that @steem.leo should be heading over to Hive. My guess is that there will be a split. A small majority of communities and dApps (maybe 60%) will stay with the Steem blockchain for now, but if Hive is successful, we may start to see more migration.
At a certain point, @project.hope community will also have to make a choice. And I post this question to the Project HOPE community, which do you prefer?
While no one can be sure what the price of HIVE coin will be, one thing we can be sure is that it should be non-zero. Hence, whatever HIVE we get from the fork, comes as a bonus. The real question will then be, what will happen to the price of STEEM?
Under a normal situation, the fork should dilute STEEM price. But note that at the end of the day, Justin Sun just want to pump the STEEM price so that he can exit and make a profit. Therefore, the war on the Steem blockchain is far from over. Justin has not acquire the 17 witness spots to have full control. You have to understand that even after the fork, the community witnesses' stake on Steem will remain. Hence, the tussle for more STEEM in order to control the Steem blockchain will continue.
With Binance and Huobi already powering down, it is just a matter of time that Justin will get enough STEEM to control the Steem blockchain. By then, I am anticipating Justin Sun to twist this event and declare "victory". There will be rah-rah and hype, pumping up the STEEM price.
How am I navigating this?
You might have noticed that I have started to power down. This is because I am anticipating the Justin Sun to pump STEEM on his affiliated exchanges (Poloniex, Binance and Huobi). I am not sure how long it will take for Justin to act, but at the point the pump comes, I want to sell as much STEEM as I can.
Personally, I am leaning towards the Hive blockchain. After the fork, I will stop my power down on Hive and fully power up over there. Basically, my plan is to sell off my STEEM when the pump comes and build my HIVE holdings. This is because I think STEEM price will appreciate in the short-term but in the long run HIVE will be a better project.
However, no one can be sure so I just have to play by ear. Remember that there is no right or wrong in a war, only victor and loser. And the victor gets to write history. As a small user, I just have to do my best to safeguard my investments.
As for my content, I will primarily use the Hive blockchain and cross-post some to Steem.
For those who still do not know, I am running a simple service called Steem ENS. I will continue to support the service on the Steem blockchain. However, I will also create a version of it on Hive.
It is difficult times. We have a virus spreading around, financial market in turmoil, cryptocurrency market crashed and now a Steem/Hive fork. Hang in there and let's ride it through together. It is always darkest before the dawn.
Join the Steem ENS Discord server to interact with the community!
This article is created on the Steem blockchain. Check this series of posts to learn more about writing on an immutable and censorship-resistant content platform:
- What is Steem? - My Interpretation
- Steem Thoughts - Traditional Apps vs Steem Apps
- Steem Thoughts - A Fat or Thin Protocol?
- Steem Thoughts - There is Inequitable Value Between Users and Apps
- Make my votes count! Use Dustsweeper!
- What caused STEEM to get dumped? Why I think the worst might be over
- Steem 2020 is about having a "SMART U"