Experts: “Ethereum killer” needs to work on its governance issues or risk losing users

Experts: “Ethereum killer” needs to work on its governance issues or risk losing users

Just days after the EOS blockchain activated its mainnet on June 14, it froze seven accounts that it suspected belonged to thieves who had stolen funds from users.

Even before the dust began to settle on that news, the people maintaining the blockchain – called block producers – suspended 27 more accounts on June 22, saying in a statement that the “logic and reasoning for this order will be posted at a later date.” Hong Kong-based EOS is a fierce competitor of Ethereum, prompting some to call it an “Ethereum killer.”

Its move to put accounts on hold, without issuing a complete explanation, has led to an outcry from the cryptocurrency community.

Some pointed out how it goes against blockchain’s decentralized nature. But a few optimists have called the move “pragmatic” and supposedly a small sacrifice to make the blockchain secure.

The suspensions have led to a heavy sell-off of the EOS cryptocurrency, leaving investors who participated in its initial coin offering (ICO) – before the product went live – on the losing end.

                     EOS price volatility over the past 7 days / Image credit: Coinmarketcap

Now that its governance methods are facing increased scrutiny, some are wondering if the EOS blockchain can deliver what it promises.

The EOS blockchain is a smart contract platform advertised as a system for decentralized applications (dApps). The tech behind it is said to be a game-changer for the blockchain industry. It aims to create a more scalable network, offering a throughput of up to 6,000 transactions per second, as opposed to the six transactions per second seen on the Ethereum platform.

The EOS protocol was developed by Block.one in 2017. Its record-breaking ICO raised almost US$4 billion, and the EOS cryptocurrency has rapidly grown to become the fifth-largest crypto by market cap.

A constitutional mess

The EOS blockchain’s problems stem from the uncertainty surrounding the chain of command of its “stakeholders.” As such, the lack of a proper governance process has created a constitutional mess.

There are different groups that serve as decision-makers on the EOS blockchain. While 21 chosen block producers keep the platform running, a governing body called EOS Core Arbitration Forum (ECAF) is tasked with resolving disputes.

The problem arose when block producers froze the first seven accounts in a unanimous decision, without getting the go-ahead from ECAF first.

Days later, the reverse happened. ECAF prohibited block producers from processing transactions of the 27 additional accounts, but didn’t immediately clarify the rationale behind the order.

Calling ECAF a mistake, Block.one wants to drop the existing rules and replace them with a new governance framework, with CTO Dan Larimer proposing a version 2.0 of the EOS constitution.

Photo credit: solerf / 123RF

But the team has to act fast before the token’s reputation within the crypto community suffers further damage.

Unexplained decisions could lead to failure

Such a framework will only work if everyone agrees on the rules, says Paul Griffin, director of Singapore Management University’s Masters of IT in Business program.

These rules must then be published and shared with those in the network. And if any changes are made, they must gain everyone’s approval before being implemented. “If there is too much unexplained ruling or censuring, people will stop buying into the EOS cryptocurrency – probably rather quickly,” he warns.

Bobby Ong, co-founder of cryptocurrency data website CoinGecko, says the EOS blockchain needs to resolve its problems quickly and create a process as transparent as possible, or risk losing users.

Freezing accounts without proper authorization is “worrisome,” as Griffin puts it, because “people buying into the cryptocurrency would want to know under what circumstances accounts may be blocked.” He likens this scenario to PayPal suspending accounts while it investigates any suspicious activity, which can be frustrating to users.

Photo credit: logicbomb / 123RF

While a blockchain can be run in a centralized manner, Griffin contends that it makes “no sense as everyone would still have to trust the central authority. They might as well use other technology instead of blockchain.”

He continues, “For people to use the blockchain, there must be trust – which means the governance of the blockchain must be clear and robust. Time will tell if trust is being misplaced or not. And of course, if trust is lost, then the value of cryptocurrency will be lost as well.”

But Ong notes that by agreeing to participate in the EOS blockchain, participants have already implicitly accepted its rules.

“If you are not in agreement with it, you are free to use another blockchain and token. The EOS blockchain by itself is a political system where its ideals are ingrained in its constitution… It is very political in nature [and] there will be more of such situations happening in the future.”

EOS still holds potential

Given the potential of the EOS blockchain, some supporters aren’t willing to give up on it. They see the weeks following the launch as a testing phase.

Anndy Lian, CEO of Singapore-based distributed platform company Linfinity, believes that at the end of the day, the EOS blockchain made the account suspension decisions with its users’ welfare in mind.

“EOS froze those ‘criminal accounts’ to secure and protect people’s property… I believe EOS is doing the right thing.”

Ong observes that having an arbitration process in place ensures that actions will be taken on any suspicious activity. “This means that thieves will not be able to get away with multi-million or billion-dollar hacks to the system.“

“EOS aims to solve scalability at the expense of decentralization. There will be a subset of apps that I believe will grow with the need for less decentralization. All it takes is one dApp on the EOS blockchain to be viral, and opinions will change very quickly,” he concludes.

https://www.techinasia.com/eos-at-risk

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Solving the Issues in the Supply Chain with Linfinity and Its Partners Using Blockchain Technology

Solving the Issues in the Supply Chain with Linfinity and Its Partners Using Blockchain Technology

Linfinity Talk just finished their roadshow in Tokyo on 1 July 2018, with the event attracting over 200 Japanese blockchain enthusiasts. Linfinity Talk worked with Befund and Qbao for the exhibition, and invited BCoin from Singapore and CoinOtaku from Japan for an in-depth discussion about blockchain development and its applications. Linfinity Talk is a roadshow brand under Linfinity, and its mission is to create a sharing platform for blockchain resources. Going forward, Linfinity Talk will continue to hold roadshows all over the world, the next of which will be in London in August 2018, to speak to blockchain fans in England.

The Linfinity Talk Tokyo Station Roadshow, hosted by Linfinity, ended in Tokyo on July 1st and attracted more than 200 Japanese blockchain enthusiasts. At the roadshow, Linfinity teamed up with Befund and Qbao to showcase an exhibition, and also invited BCoin and CoinOtaku to discuss blockchain development and its applications.

Linfinity CEO Anndy Lian gave a speech on the importance of building trust in the supply chain. He discussed two major blockchain topics – solving the issue of trust in the supply chain and solving shortcomings in current supply chains. These include communication between systems, the reliability of information, and reliability between different units in the supply chain.

Mr. Liu Yu, CSO of Befund, focused on the next wave of token economic trends. He also mentioned that Befund is the world’s first blockchain project to use securities tokens, which will lead the next token economy.

Qbao Network co-founder & COO Sun Ruoyu shared on digital currency wallets being the entrance to the blockchain world. He mentioned that the Qbao Network is a multi-functional digital currency wallet that provides digital asset management, currency transactions, online and offline payments and other digital financial services to users around the world. Its DApp Store brings together games, videos, malls and other applications developed based on blockchain technology to provide users with a one-stop service.

Regarding the development of decentralized wallets, Befund CSO Liu Yu believes that traditional centralized wallets do have certain advantages in terms of user experience, but with equally significant disadvantages such as security and cryptocurrency. Cryotocurrency will undoubtedly be an important part of the financial sector. If it still operates similarly to a traditional centralized wallet, its security will become a serious problem that can never be solved.

Qbao Network co-founder and COO Sun Ruoyi also pointed out that the decentralized wallet is a product that truly conforms to the spirit of the blockchain spirit. Users need only master their own private key and store assets in the chain. The problem of private assets potentially being damaged or encroached by third parties can be effectively avoided with blockchain distribution characteristics, and this is what is difficult for centralized wallets to achieve and match at the moment.

Linfinity CEO Anndy also contributed his own insights on the issue. He said that decentralized wallets have greatly compensated for the lack of authenticity, such as security, user privacy and transparency issues. It would be easy for users to get all the permissions of the “wallet” and get a clearer picture of any dynamics in the wallet. Of course, given that decentralization technology is still evolving, it currently is not a substitute for a centralized wallet. However, with future advances in technology, the problems with the digital wallet should be resolved soon.

When speaking on the issue of blockchain policy supervision, Mr. Ito, CEO of Japan’s CoinOtaku, and Davy Goh, CEO of Singapores’s BCoin, also expressed their own views on the traditional centralized structure. “The centralized structure is more suitable for beginners to learn and use, plus it is easy to manage. However, this management relies on the organization too. It is inevitable that blockchain will be decentralized, although it is not perfect yet in Japan, the possibility of realization in the future will be great.” Mr. Ito, CEO of CoinOtaku, Japan, said.

Singapore’s BCoin CEO Davy Goh added that better service and higher efficiency are undoubtedly the hallmarks of centralization, and that they will welcome new policies on blockchain. He added “Most digital assets market players are embracing forthcoming legislations, however maybe the best legislation is no legislation. Let the digital asset market develops on its own.”

Highlighting on this issue, Linfinity CEO Anndy Lian said, “Tokens are an integral part of blockchain technology and we’ll need to continue monitoring its development. I believe governments do welcome blockchain technology, and that they want to prevent financial fraud and crime rather than taking a negative stance on blockchain. 2018 has been year of crucial growth and demands upon the blockchain industry. Linfinity has been consistently combining leading blockchain technology and industries’ rich commercial resources and LFT, to promote the development of Linfinity in the supply chain industry.”

Linfinity Talk is the roadshow brand of Linfinity, which aims to construct a blockchain resource sharing platform. Next, “Linfinity Talk” will continue its global roadshow and will meet with UK blockchain enthusiasts in London this August.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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