As one of the highest profile blockchain projects, EOS is understandably exposed to intense scrutiny. After a record-setting, year-long initial coin offering, parent company Block.one had raised $4 billion USD. While big ticket ICOs were common in 2017, EOS easily outpaced much of their competition. As the EOS.IO platform will be created from the ground up to support decentralized applications – the next step in the blockchain evolution – it’s understandable that many investors wanted to join the bandwagon.
The EOS project took their first major leap earlier this month with the launch of their own blockchain. Prior to this, the project existed as an ERC20 standard token that served as a placeholder. Now that the blockchain is live, Block.one can, in theory, begin delivering on the promises they made during the ICO. However, the opening days of their new main not gone well.
EOS ‘Pause’ and the Aftermath
The first stumble occurred on June 16th, when the EOS blockchain suddenly stopped processing new blocks. As the platform had only reached full validation the previous day, this is a major roadblock. As a project designed to run dApps, a sudden stop like this would cripple not only the EOS currency, but also any programs running natively. While hiccups are to be expected with new technology, Block.one’s poject is one of the most well-funded projects in the cryptocurrency sphere. The fact that they’ve still not ironed out all the bugs in their main net – after launch – is extremely concerning.
Meanwhile, the launch itself was delayed by the competition between two coding groups. The “EOS Core” and “Bios Boot” factions both wanted to provide the blockchain software that would ultimately run the platform. While a full consensus was met soon after the schism became apparent, the hectic process by which the main net launched is not confidence-inspiring for investors. This isn’t the only reason investors should be wary of EOS.
Block.one Terms Spook Long-Term Investors
Found within the ‘constitution’ of the launched EOS blockchain is troubling terminology. According to the articles that govern use, anyone found to hold EOS inactively for over three years may have their assets seized and redistributed. While supporters and fans are quick to point out that these ‘cold wallets’ need only perform small transactions once in that time frame, the fact remains that an oversight could lead to loss of assets. EOS depends on a certain amount of liquidity to ensure that resources are used and available for use over time.
However, the fact that EOS assets can be seized at all is troubling for a project of this magnitude. A blockchain platform can offer every technological advancement in the world – if the money invested in it is not secure, investors will avoid the project. As such, the future continues to be rocky for a cryptocurrency project that was famously called out on national television for effectively being vaporware.
The most recent news to come out of the shaky opening was the freezing of seven accounts by the blockchain governing body. At its surface, this is a successful operation against a group of fraudsters looking to steal cryptocurrency tokens. Underneath, this shows the serious lack of true decentralization. While initial actions may be rule enforcing, like the most recent, there is the possibility for conflict later. Between hard forks and community disarray, we’ve seen multiple schisms in the cryptocurrency sphere. Should that happen with EOS, whoever holds the keys may well be able to obliterate the currency’s value through draconian policing.
Article By: Adam Stone