“The Least Trusted”
EOS was developed by a company based in the Cayman Islands, it’s no surprise that this blockchain system is one of the least trusted in the marketplace, with several commentators branding it a scam.
Raising its initial funds via an ICO (which lasted for 1 year), it’s one of the least transparent coin offerings which was essentially a fork of the bitShares crypto system.
To this end, raising a HUGE amount of Ethereum is often cited as a core condition for the offering being successful, a lack of assets to back the system, and it’s generally woeful lack of transparency have lead an increasing number of people to question the system’s vitality.
The biggest warning sign with this product was that it had nothing built or ready for when it tried to raise funds via an ICO (funds – by the way – which were diverted to a Cayman Islands company so they’re basically untouchable by any sort of law enforcement).
This was backed by the simple fact that EOS tokens could not be purchased by citizens of the US. Whilst their reasoning was reasonable, the reality is that if you’re going to be offering a crypto (decentralized) currency, not accepting US buyers is like trying to start a car without a motor… it just doesn’t happen.
Typically, a new cryptocurrency will be based around some new idea predicated by the founders of the technology. Their use of the crypto system is basically just a way for them to realize their ideals. Ripple is a great example. Unfortunately, EOS doesn’t have this…
What is EOS?
Billed as a way to “introduce a blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications”.
In other words, they’re trying to design a new Ethereum by building a platform which is able to support smaller systems (known as decentralized apps or smart contracts).
Whilst there’s nothing wrong with this in itself, the core problem is their technical basis is extremely vague, bordering on nonsensical. They’re promising their system to be compatible with Ethereum and have been working on creating the software to backup their ICO claims (they had a 12 month ICO that promised a lot).
The system is meant to provide a decentralized operating system which allows developers to deploy and run decentralized application across 100’s, 1000’s or even millions of servers.
Unlike the likes of Ethereum or Bitcoin, EOS is designed to have unlimited scaling capacity and provide the ability to run almost any application (be it messaging, IoT, etc) without the need to create any extensive supportive technology. The team have also promised near-to-free transactions, much cheaper than standard architecture and certainly cheaper than the likes of Ethereum.
Who created it?
One of the main drawbacks of EOS is its lack of transparency with its founding team, especially those who hand in the development of the code itself.
From what is publicly available, the following is known:
- Dan Larimer
- Brendan Blumer (CEO)
- Former founder and CEO of ii5, whose debut product (1group) was a centralized property-listing platform for realtors in India.
- Before ii5, Blumer founded Okay.com (Hong Kong real estate platform), which merged with Asia Pacific Properties (APP) around 1 year after launch.
- Prior to this, he was heavily involved with Accounts.net, a US-based MMORPG trading platform (for accounts, weapons and such).
- Brock Pierce (Chief Strategy Officer)
- Blumer’s LinkedIn profile says he relocated to Hong Kong at the age of 18 when Brock Pierce (currently Chairman of the Bitcoin Foundation and Co-Founder and Managing Partner of Blockchain Capital; founder of IMI Exchange, ZAM, and IGE) acquired an operation he had started (at 15), selling virtual assets on a website he had developed. Brock Pierce is also block.one’s Chief Strategy Officer.
These have been joined by several more now – according to the block.one website, around 16 are working at the company, although since it’s registered in the Cayman Islands (why?) we don’t have any access to its finances etc.
The big kicker, as you can tell, for us has been the whole Cayman Islands thing. Why would you base a company in the Cayman Islands unless you wanted to hide something?
Why does it exist?
Apart from wanting to create an Ethereum-like operating system for decentralized payments/processes, the system has been built around the idea of creating small decentralized applications which run across (potentially) millions of servers.
Unfortunately, we struggled to find any differences between this and Ethereum – both of which were designed to provide the use of smart contracts or decentralized apps:
The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built.
The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications.
You can view the EOS Whitepaper here.
Trajectory
The EOS system has been growing at a steady rate for a number of months now, both in terms of price and transaction volume.
Having said this, the main problem that many have suggested about this coin is that it’s basically shrouded in mystery, with almost no reference to the founders or why it was created. This is a bad sign.
An increasing number of developers & analysts have now come out in support of the notion that the crypto marketplace is due a major correction in the early part of 2018. With this, a large number of systems that don’t offer much independent value will simply drop off the radar, leading to the eventual retraction and consolidation of the offerings.
It’s our opinion that “me too” systems – such as EOS – will fall by the wayside when the fresh inflows of money run dry. If it hasn’t proposed a major feature-set, or doesn’t have major adoption (such as is the case with Stellar) at this point, it’s very likely the currency won’t survive.
Thus, what we’ve seen from EOS is not very convincing.
Firstly, the majority of its circulation is based on the year-long ICO it held. Whilst this is not common in the space, what was worse was that the team sold a HUGE amount of its coins in the sale. This was seen by the community as a very bad move (over-inflating the value/price of the coins whilst diluting share).
Secondly, the system has not received much adoption. The key with a system like this is adoption (getting its core infrastructure used by business or governments). Ripple and Stellar have achieved this to a degree… EOS not so much.
What this means is that if the system doesn’t have a huge amount of trajectory.
Read this in 1 years time, you are shrouded by your stake in X coin..most likely ETH. EOS will be the future. See you in 1 year
This article will be updated if that happens. Again we are not here to discredit a particular cryptocurrency. We only give basic information about it and added few opinions. This article will surely be updated if we see some new improvements and updates on EOS. Thanks for your comment.
Thanks for taking the time to do a write-up on EOS. However, I think a little bit more research by the author would have gone a long way. For example: “…that it’s basically shrouded in mystery, with almost no reference to the founders or why it was created.” This simply isn’t the case, as there’s a ton of publicly available information that answers this question. This theme is also true of other elements of the EOS project – that is to say, assertions made in this review do not consider much of the publicly available information about the project.
I’m not suggesting you change the article – it is what it is. However, if you’re interested in actually learning about the specifics of the EOS project, I recommend going to eoscollective.org and reading the compilation of articles/videos located under the “Resource” section.
Cheers.
Ripple is neither decentralized nor trustless. It isn’t innovative. What it does is trivial when you don’t have those two requirements. It betrays all the principles behind the advent of cryptocurrencies.
This article is quite inaccurate. With all the regulations tightening, Cayman Islands is a good choice for EOS and frankly that’s their business, what we should be interested in is that they deliver a product.
The founder, Dan Larimer, you say is “an enigmatic programmer” and “lacks of transparence”. Seriously? The creator of Steem, Steemit and BitShares is a shady guy? He is very well exposed, everybody knows him in the world, and steem is one of the best example, if not the best atm, of a well-working blockchain used for an application, and it scales like a charm.
You are not sure about how they are delivering? Fear that it may not live up to the promises? Just try it, the testnet is public, and go on their git repo, all the code is open sourced. How can they possibly be more transparent than this?
The scaling problem is known in Ethereum and that’s why they are moving to Casper. If they manage (and I trust Vitalik to do so), than the eos premise may be weaker, but it started on solid grounds and makes sense as a blockchain.
I found this article little informative and quite rethorical/biased, to be frank
This article will be updated soon enough. We appreciate your input.