I was having a chat with another Steemian about the earlier days of Steem and he mentioned I should do a post about it so I figured I would share the journey with those that are newer here on the platform.
The Beginning
I was not here when the Steem blockchain was launched. I joined around August of 2016 and a few things happened prior to when I joined.
The idea started from @ned and @dan to create a blockchain based, social media platform and began to work on the code.
The Steem blockchain was launched back in March 2016 and had a bit of a rough start. Not many of the newer users know that Steem had a relaunch. There was apparently an integer overflow bug in the POW mining and required to kill the old chain and relaunch a new one.
You can read a bit more details from a post @joseph made that I was able to find from last year. He collected most of the statements made from Dan Larimer during the early launch days.
Now from what I have gathered, a few of the early adopters/miners had an issue with what happened with the launch and relaunch. Those that had mined tokens before the relaunch lost all those tokens since a new chain was started. Some feel that it was not really due to a bug and Dan and others from Steemit, inc wanted to have a larger stake in the platform. Many see it as an unfair launch and it just might have been. However, it was stated as a "experimental blockchain with an unproven/beta consensus algorithm."
Either way, many of those early adopters/miners have earned a lot and still are.
Huge Rewards
Since this was the early days and fewer users on Steemit, the price of STEEM on the market was around the $4 - $5 range and the early bloggers were earning huge rewards. Many of us have seen the infamous makeup tutorial by @guerrint, who has not been around for a long time now or perhaps under a different account name... who knows.
I thought this one was better from @roelandp and should have made more 😝. Also, if you're looking for a witness to vote for, he is one I would recommend.
Steemit Hacked
Around the same time with the high rewards, Steemit.com was hacked.
It was in July 2016 and someone had snuck some javascript code onto the Steemit.com website that compromised less than 260 accounts and almost $85,000 worth of STEEM and SBD at the time were said that "may have been stolen".
Ned Scott mentioned it was reported to the authorities and was working with Bittrex that led the exchange to temporarily suspended deposits and withdrawals.
Partner exchange Bittrex was informed of the compromise and is actively helping the investigation. As a precaution, they have temporarily suspended the ability to deposit or withdrawal Steem and Steem Dollars from their exchange.
https://steemit.com/steemit/@steemitblog/important-security-announcement-steemit-ceo-ned-scott
Of course, the news broke out to crypto news sites like Bitcoin.com
POW Mining Issues
It's been long gone since it was possible to mine STEEM tokens and at one point, there was some type of exploit or whatever you want to call it, to dominate the mining queue.
https://steemit.com/mining/@bacchist/why-is-the-mining-queue-dominated-by-two-people
It was decided in in HardFork 0.16.0 to change the POW mining algorithm from SHA-256 to Equihash to level the playing field for mining. However, not too long after the switch, the mining queue was still being dominated by the same people from what I remembered. Then it was decided to remove POW mining altogether.
Hyperinflation
There was a rough time on Steem when the price of Steem drove all the way down to 7 cents when at one point in the early days was near $5.
The term "black swan event" was thrown around and not sure if this was officially labeled as that but it does somewhat fall into the definition.
A Black Swan event is an event in human history that was unprecedented and unexpected at the point in time it occurred.
-Blackswanevents.org
@dan also described the event that would drive the price of STEEM down.
There are two major black swan events that the Steem community and traders should have a contingency plan in place for. The first black swan is if the value of STEEM crashes so far that Steem Dollars represent an insurmountable burden on the STEEM price that sets off a chain reaction pushing the value of STEEM toward zero.
The second major black swan event is when the US dollar hyperinflates and becomes worthless as a day to day currency. In my opinion this is the more likely outcome.
https://steemit.com/steemit/@dantheman/steem-dollars-have-limits
Posts were paid out in STEEM rather than the way we currently have it in SP and SBD. The change was made in HardFork 0.16.0 the same time POW mining switched to Equihash.
Power down of SP also used to be 104 weeks rather than the 13 weeks we currently have. Some very important economic changes were made in HardFork 0.16.0 that turn things around for this platform.
- Power Down in 13 weeks instead of 104
- Inflate at 9.5% APR narrowing to 0.95% APR by 0.01% every 250,000 blocks (Roughly 0.5% per year).
- Steem Dollar conversion takes 3.5 days (down from 7)
- Witnesses receive 10% of inflation, runner up witnesses get paid 5 times the top 19 per block produced.
- Miners get paid the same as the top 19 per block produced
- Witnesses / Miners will continue to be paid in Steem Power
- 75% of inflation goes to authors and curators
- 15% of inflation is allocated to Steem Power
- Switch to Equihash Proof of Work algorithm.
- Remove rewards for including Proof of Work transactions
https://steemit.com/steem/@steemitblog/final-review-of-steem-economic-changes
Posts were also paid out twice per month. Once every 24 hours after it was created and another after 30 days. A few other changes were made after HardFork 0.17.0 Simplicity such as removing the post rate limit of 4 times per in 24 hours when exceeding this limit, authors would be penalized in reduced rewards on their posts. You can read the rest of the changes that were made on Hardfork 0.17.0 Simplicity here:
https://github.com/steemit/steem/releases/tag/v0.17.0
Delegation
In Hardfork 0.17.0 Simplicity, SP delegation was introduced.
Steem Power can now be delegated to other accounts. This transfers content voting rights and bandwidth allocation but not witness voting rights. Delegations come in to effect immediately, both when increasing and decreasing a delegation. However, Steem Power being returned by decreasing or removing a delegation has a one week delay in limbo before it is returned to the owner. This is to prevent a satoshi of Steem Power from being able to vote on the same content twice.
Accounts cannot power down Steem Power that is being delegated, nor can they delegate Steem Power that is being powered down.
This is a great feature that has a lot of benefits but some users think this prevents the demand to buy STEEM and just find delegation from someone that has the stake.
We have seen business models form where markets were created for renting SPdelegation.
SP delegation also helped spawn the increase in pay-for-vote services that we currently have and changed the dynamics of the Steem platform a bit.
Linear Rewards
For a long time, many users wanted changes to the reward curve and make the switch from n^2 to n linear. This change was made in HardFork 0.19.0 Equality.
With the introduction of a linear reward curve everyone will have a say directly proportional to their stake.
Also increasing the vote impact by 4x, everyone had a bit more influence on the platform. However, with these changes, the amount of voting at 100% before dramatically reducing vote power changed from 20 every 24 hours to 10.
You can read the rest of the changes here:
https://github.com/steemit/steem/releases/tag/v0.19.0
For the most part, the majority of users were happy with the linear reward change but after being on it for some time now, it seems that some users might want to change the reward curve again to either the previous curve or a new one due to excessive self-voting.
Everything Else In Between
There are a lot of others things I could have included but the ones I mentioned above were the more memorable and significant things that happened on the Steem platform.
There is a lot that we have been dealing with since the early days of Steem and still are dealing with such as abuse, scams, flag wars, frustrations, controversies, drama, etc. The list can go one quite a bit.
Now and To The Future
SBD recently spiked to around $20 and is currently hovering around $7. This is really great for those that are blogging but long-term, not sure if this will be great for the platform as it is supposed to be pegged to $1.
There are over half a million accounts now and have many different frontends and apps that are built on top of the Steem blockchain.
https://steemit.com/steem/@bitcoinparadise/the-steem-ecosystem-is-growing
It's been a crazy journey and really amazing to how far this platform has come and the obstacles we had to go through. This is just the beginning of the fight and we're only in round 1, or should I say Act 1.
Now we are gearing up for Hardfork 0.20.0 “Velocity”, Smart Media Tokens, and Communities in the near future. Let's get ready for 2018 and outdo 2017.
It's time to move on to Act 2.
Have a Happy New Year everyone.