I've heard about the Steemit ninja mine for a long time. I was on the platform at the time there was mining occuring, but I wasn't yet saavy enough to know how to do it or even bother to do it. Steemit was my first foray into crypto. So, there wasn't much to go on. That said, I've heard about this "ninja mine" for the 1.5 years that I've been around here.
What is the ninja mine?
Actually, there's something before that. The restart. So, let's start there.
Steem was launched and there was a bug
So, Steem was launched and there was a bug in the code. It made them want to restart fresh. So, they did that... actually let's go further back.
Steem was a blockchain that was about to be launched
Dan and Ned did this funny thing. They told everyone they could mine Steem, but barely said much more than that. They gave advice here and there, but basically didn't tell anyone much about it. The reason they did this was to get around the ICO laws. They didn't want to make it look like a security so they didn't promise anything. They also didn't really want the whole world mining, but they went through mining to make it legal to do an ICO without doing an ICO. So, the people that could mine this thing were a handful of devs that were reading the old bitcointalk forums, Steemit, and Steemit employees.
They launched under those pretenses
Within 1 day they found a bug. Rather than hardfork to fix it they simply restarted the coin. That pissed off the people who were already mining it. It started a rough reputation for Steemit with the investor community. It looked to some like they had competition for the coin so they rebooted to scare people off. Dan doesn't seem the type for that, so I'm betting it was a legit code bug... I mean, Steem's had those before... but it left some early miners with a bad taste in their mouths. The argument became why mine if these assholes are just going to reboot the coin if they don't win the mining war. When people don't trust Steemit I think it starts with this mining plan and this reboot.
Ok, next up there was mining for months
Steemit, employees, and a handful of other miners were mining the coin. Mining it turned out produced an assload of stake. More than posting even with random $40k makeup tutorial posts getting out there. In order to mine you had to have a lot of different accounts. So, the mining accounts were all over the place. Steemit was the heaviest miner, but after they gather up 70% of the minable steem stake they quit mining and let a handful of other devs catch up and take it. Eventually they stopped the mining altogether.
What did they accomplish?
Steemit seemed to have wanted a majority stake in the coin without it being a security or without it seeming like it was handed out and represented ownership or something like that. It was literally one type of work around to the laws. So, they made it so they could ICO without actually ICOing. The challenge it created was a truly warped distribution. Now there's 100 accounts with 93% of the Steem. When I look around and see problems on the platform I mostly think it's related to distribution on the network.
EOS
EOS seems to have a slightly more elegant solution by allowing daily purchases open to anyone. They explicitly didn't make any promises to again avoid being a security and to claim it's a utility token. In this case Dan now had enough money to straight up buy his own coin at release allowing him a larger stake of the "utility" token. This seems more fair than making it so any devs are the miners which means only devs are the whales, which means curation on the platform gets really wonky too.
EOS Steem Competitor?
Dan's coming out and saying that they'll create a Steem competitor on EOS. Seems interesting. Dan is pretty convinced that only a community with true identities known by everyone will work out. So, he seems to implicate there will be trusted oracles or something like it that will make sure everyone is a true and verified person. Maybe that's birth certs? IDK. I prefer psuedoanonymity. I think it's enough to know what actions Aggroed is taking without have a crypto probing my terrestrial privates.
Anyway, a lot of investors got pissed about this whole thing.
Frankly though, after taking a week or so to investigate this thing I mostly walk away thinking Ned and Dan aren't the complete dicks they are made out to be. If anything the government seems to be the asshole. Their need to control how ICOs are managed created the need for this work around, which resulted in a totally fucked distribution. I know it was partially their intention to have a large stake and be Steem blockchain kings, but like we're seeing it mostly seems like benevolent dictators who choose not to intervene (much). IDK, I wasn't in the room at the time the decision was made, but I guess I'm a little less fuming mad about the distribution around here and now mostly hope that the market recovers enough to make some of these investors choose to divest to a little more reasonable percentage of blockchain ownership. Then again... I keep saying Steem's gonna hit $50 by the end of the year, and it's the most undervalued blockchain around. So, I guess I can't totally fault them for sticking around either.
Resources:
http://bytemaster.github.io/article/2016/03/27/How-to-Launch-a-Crypto-Currency-Legally-while-Raising-Funds/ (this is Dan)
This is also Dan (aka thereverseflash) https://bitcointalk.org/index.php?action=profile;u=803221;sa=showPosts
I'm hosting a live music concert featuring Steemians this Saturday at 11am EST on MSPWaves. Come check us out..
I've also dropped a few ranks on the witness totem pole. Please consider voting for my witness if you haven't already.