Last week, a report was circulating about EOS that slammed the ecosystem saying it was not even a true blockchain. There are other people in the blockchain world who would agree with at least some of the statements from the report.
According to Whiteblock, the “world’s first blockchain testing company,” EOS may claim to be blockchain but it is really something else. More specifically, EOS is a “distributed homogeneous database management system.”
Whiteblock hammers EOS further calling it just a cloud service. Ouch.
“EOS token and RAM market is essentially a cloud service where the network provides promises for computational resources in a blackbox for users to access via credits. There is no mechanism for accountability due to the lack of transparency on what Block producers are able to create in terms of computational power. EOS throughput is significantly lower than EOS initially claimed in marketing materials. EOS suffers from consensus failures and lacks Byzantine Fault Tolerance.”
So is EOS an overhyped crypto-poseur?
Simon Manka, IOST‘s head of growth, says EOS is way too centralized to claim decentralized status:
“In global economics, the Gini coefficient is used to measure the distribution of wealth in a nation, and more specifically identifies inequality. Any number above 60 shows too much concentration of wealth. Applied to the EOS model, the score is 97 out of 100, which indicates incredibly heavy centralization, says Manka.
He adds that EOS uses a delegated PoS (Proof-of-Stake) consensus mechanism that by its very nature has some serious centralization issues.
More Like a Traditional Bank …
Those who process transactions are selected by EOS, which makes the system inherently centralized. With 21 validators who hold the majority of the power, they act like the top global banks, who are the centralized authority for financial transactions, explains Minka.
“EOS doesn’t have a reputation layer to gauge whether or not a user has been a good actor and helps to ensure that authority is equally distributed.”
Of course, IOST wants to be the one blockchain to top them all as an EOS competitor.
“Our goal is to create the world’s fastest blockchain infrastructure that meets the scalability and security needs of a decentralized economy We aren’t going to just release the code, then walk away. We’re giving developers the support they need to build on our protocol and make it truly sustainable.”
Whether or not EOS is just a cloud service masquerading as blockchain may mean little since the company is sitting on around $4 billion raised in their initial coin offering. That type of money can take them far.
Update: It has been pointed out that EOS competitor ConSensy paid for at least a portion of the report. Definitely, something that should have been disclosed up front and, by burying this fact, undermines the credibility of Whiteblock. So much for any shared mission of decentralizing the world and blockchain camaraderie – not to mention transparency and immutability.
Note that I specifically said that the “massive conflict” wasn’t disclosed until paragraph 38. Most casual readers would have no idea that “commissioned by ConsenSys” means “paid for by EOS’ chief direct competitor”
— Mike Dudas (@mdudas) November 3, 2018