EOS is making gains, but investors predict it is in trouble

16 Dec, 2018
by Arthur Sillers
EOS is making gains, but investors predict it is in trouble

Investors and crypto insiders have claimed that EOS might be on its last legs, with block producers looking for a way out, and with the shadow of the SEC looming over the project.

Corey Miller, an investment scout for Blocktower, insists that instead of morbidly watching the ‘Bitcoin death spiral,’ crypto should be in fact anxiously awaiting the implosion of EOS as its block producers allegedly start shutting down operations.

Miller notes that in a survey, EOS block producers put $4 as the approximate break-even cost for mining. Given that EOS is trading at less than half of that, it’s almost certain that a huge number of EOS block producers are either shut down, or looking to shut down operations. Miller estimates that 10% of block producers have already shut down, but admits there is no way to certify that figure.

Miller notes that in order to continue, EOS will have to adjust rewards to adequately compensate miners in order to continue, but so far there has been nothing of the sort.

In the meantime, furthermore, Charles Hoskinson of Cardano, told Crypto Briefing https://cryptobriefing.com/charles-hoskinson-sec-eos/ recently that the SEC will likely bring ‘punitive’ measures against Block.One for the way they raised the $4 billion in the original EOS ICO, which Hoskinson claims was conducted with an ‘utter lack of respect’ for investors. Hoskinson points to the way that Block.One created a centralized infrastructure, not without technical problems, which he claims was designed to absolve Block.One from fiduciary responsibility, which he describes as ‘egregious to the core.’ Notably, Cardano is a direct competitor of the EOS’ model, given that they also are creating a decentralized application space.

Nonetheless, the SEC indeed continues its warpath across ICOs and crypto funds, and if EOS is as problematic as Hoskinson mantains, it is not in a good position to defend itself. This also isn’t the first time that EOS has come under fire from the crypto community, with notable claims that EOS is ‘not even a blockchain’ hurting their public reputation, as well as problems with their mainnet launch continuing to be brought up in most discussions of the dApp platform.

Read more: Weiss Ratings calls out Justin Sun: ‘Ethereum and EOS are better than Tron

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Read more about:EOS (EOS)Cardano (ADA)


Are EOS block producers really shutting down?

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There is a huge misinformation campaign going on. Some highlights

* Misinfo: EOS wasnt functional at the time of the ICO and raised an enormous amount of money illegitimately for nothing but a whitepaper and a testnet.

* Truth: ETH wasnt functional at the time of the ICO and raised an enormous amount of money for the awareness at the time for nothing but a whitepaper and a testnet and still wasnt classified as a security

* Misinfo: There is no actual use for EOS itself.

* Truth: EOS is a utility token. In the same sense that you need ETH to send transactions, you need to stake EOS to send your tokens around.

* Misinfo: EOS is a centralized shitchain with only 21 people validating transactions.

* Truth: EOS is one of the most decentralized and fastest blockchains in existence. There are more than 400 active BPs participating in a fluid democracy. Many of the original BPs that launched the mainnet are no longer in the TOP20. On top of that, the number of BPs can be increased at any time at the cost of latency which will give EOS an upper hand in the decentralization race as the team makes progress on scaling EOS.
Also, that are not 21 people but 21 companies and communities comprised of many individuals.

* Misinfo: EOS is not a blockchain and does not even use Merkle trees.

* Truth: EOS uses Merkle trees just like any other blockchain. EOS does have a merkle tree over all the transactions within a block. This means it is possible to prove you have been paid without having to process all blocks nor trust the full nodes. These proofs are smaller than ETH because light nodes don’t even require the full history of block headers. That is a design choice that makes EOS so fast! Superior technology all the way. Dont let the misinfo campaign get to you.

* Misinfo: No one is using EOS dapps.

* Truth: EOS dApps currently handle millions of transactions per day—far more than Ethereum. In fact, EOS is the most successful blockchain launch in the history of blockchains.
10x on tx count

* Misinfo: Governments will have an easy time taking down EOS

* Truth: ETH relies upon a peer-to-peer discovery process. Governments and ISPs around the world know exactly where every Ethereum node is and can trivially shutdown any and all public endpoints. Not the case with EOS

* Misinfo: Larimer is working on a new project not involing EOS

* Truth: Larimer is ONLY working on EOS and has recently stumbled upon an idea to build much faster and scalable token Source: https://www.reddit.com/r/eos/comments/a19lxn/dan_larimers_statement_on_his_new_token_idea/

* Misinfo: No companies are building on EOS.

* Truth: Some of the leading YCombinator startups are not building on ETH but EOS. Below you will see the reasoning WHY

* Misinfo: EOS is not enterprise-ready

* Truth: While ETH has a nice alliance, namely the EEA, those are mostly highly-customized forks of Ethereum, but the key is that Ethereum is not built for consortium chains nor has interchain capabilities yet. EOS is by design a consortium chain (based on superior DPoS which is a better model for enterprises) and is built in a way to adapt to real-life enterprise needs. Block.one as a first-mover recognized the importance of interchain capabilities so that value can flow between enterprise forks and the public chain. Case in point: Consensys trying to change corporate culture instead of focusing on what matters, enterprise adoption and interchains (consequently they dropped the ball). Further examples: https://www.prnewswire.com/news-releases/blockchain-startup-eos-pro-announces-enterprise-grade-eosio-distributed-network-300688941.html

* Misinfo: EOS is not really feeless and is a shady economic model that will never work.

* Truth: While there are costs involved in sending EOS around they happen during the setup process of your account. After that transactions are free. The EOS locked in your account may undergo some fluctuations but you dont need to buy that much nor do you need to buy a token every time you want to perform an action on a blockchain. That is a vastly superior model that will reduce friction.

* Misinfo: EOS will be governed by the rich and is the only system that is set up in this way.

* Truth: In practice, pareto principles dictate that 80% of the supply will be controlled by 20% of stakeholders. That seems to be already the case with ETH and should over time become worse. The same will be true for EOS. All PoS or DPoS systems are vulnerable to this governance monopoly. A solution has yet to be found and in my mind will not be found (causes: human psychology and genes) unless people opt for a 1-identity-1-vote-approach (which obviously only works in systems with onchain-governance like EOS.

* Misinfo: EOS dapps are 100% gambling dapps.

* Truth: While EOS has some gambling dapps (a display of innovation and first movers) some of the most used dapps in existence are actually games such as "EOS Knights" or decentralized exchanges such as "Newdex".. also some of the highest funded VC-vetted dapp teams are working on a decentralized Wikipedia alternative and a spiritual successor to "Second Life" (decentralized VR world)
17 Dec, 2018 - 15:10

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