Setting the record straight on Steemit payments

6 months ago
2 Min Read
492 Words

Generally speaking, I’ve found it best to just ignore posts by Steemit Inc and the new Steem witnesses, as they often are just contradictions of their own past statements and claims, and thus need no active dispute.

But they did make one false claim about BlockTrades which I’ve decided to address directly, as they’ve not only made it on, but also recently repeated it in a cointelegraph article:

What’s the claim?

The original claim was made in a Korean-language post on steemit, but I found a translation of the claim in a steemitblog post:

”By the end of 2019, blocktrade had received 25 million Steem in the past three years from Steemit Inc. in the name of development costs.“

In the cointelegraph article, this claim has transmuted to:

“More than $35 million dollars worth of STEEM tokens were transferred to Blocktrades at the time. “

While the original posting of this claim at least makes it clear that the STEEM transfers from Steemit to BlockTrades took place over 3 years, an ordinary reader of the claim in the cointelegraph article would believe that all the Steem was made in one transfer, based on the placement of the phrase “at the time” and the surrounding statements in the article.

What’s the truth?

Neither claim is accurate.

Steemit did indeed make many Steem transfers over several years to BlockTrades. These were public payments mostly made by the steemit2 account, and many people were aware of the payments as this was one of the largest accounts on the blockchain and it was known to be owned by Steemit Inc.

But I believe it was also well-known that these payments were not for development costs.

These payments were normal trades of Steem for BTC and ETH, similar in nature to trades that our customers routinely make to exchange one cryptocurrency for another cryptocurrency. Due to the large size of these payments, they were arranged as OTC trades, rather than using our web site. It’s also worth noting that Steemit made similar arrangements with other exchangers as well, so this doesn’t represent the totality of their cryptocurrency trades.

As these trades were a private business arrangement with Steemit Inc, it’s been my policy in the past not to discuss these trades publicly (for most of its lifetime, Steemit was often obsessed with secrecy about its operation, in my opinion). But as Steemit Inc has itself decided to repeat a claim that it knows to be factually incorrect, I decided to set the record straight.

Perhaps the saddest thing in this whole story is that Steem would have turned out quite differently if these had been payments for development work. Given the amount of work we’ve been able to do on Hive at a vastly smaller cost, it’s hard for me to even imagine the sheer amount of improvements we could have made if this kind of money had been devoted to improving Steem.