EOS Project Issues That Are Bothering Vitalik Buterin
Cryptocurrency ICOs have been attracting many shrewd investors and dumb money over the past few months. Quite a few projects have raised significantly more money than anticipated, which shows there is a degree of desperation associated with these ICOs. EOS is one of the more ambitious projects we have seen to date. However, Vitalik Buterin feels there are some issues with the project which must be addressed first.
3. EOS FEE STRUCTURE
Similar to any other project using blockchain technology, EOS has an interesting mechanism when it comes to transaction fees. It seems the project will be using a technique to determine how many transactions people can send based on the amount of tokens they hold at the time. This means users will need to buy a certain amount of tokens in order to spend them. This is an unnecessary exposure to volatility, according to Buterin. His argument is pretty solid.
Not everyone wants to spend hard-earned money on an unknown asset in order to use a blockchain. Even the people who want to use EOS just a handful of times will be needing to buy a lot of coins and sell them all later on, assuming the price has not collapsed. It is a less-than-stellar business model which will hurt EOS’s chances of succeeding in the long run. Early adopters will need to pay for everyone else to use the network in the future.
2. 100,000 TRANSACTIONS PER SECOND?
Scalability is an integral part of cryptocurrency and blockchain technology. Even the bigger currencies have been struggling with scaling, including Bitcoin and Ethereum. EOS may not fare much better, despite its bold claim of processing 100,000 transactions per second. Achieving such a degree of scalability would seem pretty much impossible right now. The project claims to be able to make it happen, although it will be incredibly difficult to do so.
EOS relies on a small number of master node-esque nodes belonging to what appears to be a consortium chain. There are no Merkle proofs or any other ways for users to audit any part of the system. Their only option would be to run a full undo and monitor everything very closely. It might work out in the end, but Vitalik Buterin feels that this is a rather undesirable outcome. Only time will tell if this system is the downfall of EOS or not.
1. DPOS IS A POTENTIAL ISSUE
The concept of Delegated Proof of Stake makes a lot of sense. It is a decentralized way to achieve consensus among token holders on the EOS network. Everyone can vote on who should be eligible to run a node on the consortium network which makes up this project. However, there is no real incentive for these nodes to behave correctly, which leaves the door wide open to malicious behavior. It highlights how this project over-relies on the voting system itself.
The issue with blockchain-based voting is multifaceted. Firstly, not every token holder will vote, as we have seen multiple times in the past. This was especially true in the case of BitShares, a project also developed by the EOS team. Secondly, every voter could influence the result, making “correct’ voting a less desirable outcome. Anyone keeping coins in an exchange wallet would give that exchange their vote. That is not the desired effect by any means, although most holders will not care as long as they make a profit.