Decentralized platforms are difficult to manage. This has been a long-standing hurdle to the development of Blockchains across the board. Bitcoin’s Blockchain, for instance, has already shown its fair share of bickering and rivalry among developers and miners when it comes to making communal based decision on the network. However, recent developments with EOS’ Blockchain and its Mainnet launch have proven that there is no simple balance to governance on a decentralized network.
For EOS, it all started at the beginning of the Mainnet launch. The much anticipated Mainnet launch went live a few days ago but only after a series of hurdles. From a freezing network to vulnerabilities on the $4billion worth enterprise and even the questionable decentralized qualities of the EOS Mainnet, there has not been a shortage EOS related issued leading up to the Mainnet launch.
Let’s take a look at some of the twisted and almost dramatic developments that have led to rising concerns about the well being of EOS Blockchain project.
Questioning the integrity of the EOS Delegated Proof of Stake protocol
Having managed over $4billion in its recently completed year-long ICO, EOS is heralded as the industrial scale Blockchain project. Its creators (Block.one) consider its capacity to scale and speed up the number of transactions as its main selling point. Compared to Ethereum (its main competitor) EOS is looking to n supersede Ethereum while deploying Decentralized Autonomous Organizations (DAO) on its platform.
How is EOS able to achieve this? Well, EOS uses a unique consensus protocol called Delegated Proof of Stake (DPoS). This algorithm is the key to scalability and speed on the EOS Mainnet and relies on groups of Block Producers elected by token holders. However, it comes with a caveat. The DPoS protocol only works with 21 groups of Block Producers (equivalent to miners on the Ethereum Blockchain) and the power of votes cast is dependent on the total amount of tokens a voter holds. This, to a great extent, limits the capacity for decentralization on the EOS network.
With a quasi-decentralized Mainnet that only allows whales with most token holdings to vote, EOS has come under heavy criticism especially from the likes of Vitalik Buterin (the creator of Ethereum) who has questioned the integrity of Block.one, and whether EOS is truly a decentralized project or an organization that creates conducive plutocratic dynamics for the few network stakeholders.
Voting Complications, Backroom politics and Investment risks
During the EOS Mainnet launch, critics pointed out the arduous election that was marked by confusion with a series of problems that led up to the network freeze. Not only was the whole process full of risk (investors had to use their private keys with a third party software), but it was also full of bickering from the whales of the EOS community. According to reports, the delays experienced during voting were as a result of backroom dealings and politicking among the whales leading to the surfacing of impostors who even hacked a Block.one account with fake announcements of unsold tokens.
Furthermore, prior to the voting, a Chinese cybersecurity firm had found massive flaws in the EOS system after which Block.one announced a bug bounty program. Eventually, a cybersecurity researcher managed to find 12 vulnerabilities on the $4 billion worth enterprise.
When the 15 percent threshold for voting was finally achieved, the EOS Mainnet collapsed during the freeze to which Jack Palmer (the Dogecoin creator) tweeted:
“So the #EOS blockchain was taken offline for 5 hours just days after launch due to a bug – until a centralized company (http://block.one ) issued a patch to block producers. …and this software had $4B in funding. Making it hard to not be critical folks”
In closing
Following the freeze, the Mainnet went back to normal fairly quickly, however, a lot of crypto enthusiasts, investors and experts have taken a critical view of EOS and its viability as a Blockchain project. At the moment, a great deal of attention is on EOS and its future performance. Everyone just wants to see what a $4billion worth Blockchain based enterprise can achieve.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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