Why EOS is destined to fail.
With some very good dApps dropping this past couple weeks I've really started putting in some time into EOS and wanted to get some answers about concerns that drove me away to begin with. First off, mad props to EOS Knights and EOS Bet for making some very good apps that caught my eye and are very well done. So here are my concerns that I've had in the past and why I pretty much pushed EOS to the back burner while focusing else where in the crypto community. This all lead me to believe EOS will fail and I have yet to see any solutions to these MASSIVE problems that are at the core foundation of EOS.
- Majority of EOS wealth held by less than a dozen wallets. 50% or more are held by exchanges and can pretty much control the network by voting for the BPs of their choosing. Making everyone else's vote pointless.
Sources: https://eosauthority.com/producers_chart | https://www.ccn.com/less-than-1-of-eos-addresses-hold-86-of-the-tokens/ | https://www.trustnodes.com/2018/06/03/just-10-addresses-hold-nearly-50-eos-tokens
- CPU Cost to use certain Apps is pretty high. So I love EOS knights but noticed that the EOS mainnet is a bit all over the place. In playing I find that I get the most consistent play at about 30 EOS staked. However, I have still run into CPU issues during some peak times with EOS CPU skyrocketing. At one time I was still getting a CPU wait error with 60 EOS Staked! That is a bit insane considering that I am consistently staking between $200-$400 to play a phone game.
- RAM Cost to launch dApps is a big barrier of entry right now. According to the article below some devs have dropped as much as $100,000 to launch their app on the chain and do an airdrop. Yikes!
Source: https://www.coindesk.com/ram-it-all-rising-costs-are-turning-eos-into-a-crypto-coders-nightmare/
- Block producers seem to be chosen by a select few elite holders with not much community involvement. You can see this in the Voting graphics where more than 50% of the votes are from large wallets and exchanges. This exacerbates the issue with a few entities controlling so much EOS in only a few wallets. The problem will only get exponentially worse as these block producers will be claiming their rewards and either holding them, or exchanging them for cash to pay expenses. This either gives the BP more power or the exchange more voting power. In some instances the exchange IS the block producers (i.e. Bitfinex) and is a fundamental flaw in the foundation of EOS and its 21 block producer system.
Source: https://eosauthority.com/producers_chart
Any responses I've gotten on the above issues deals with off-chain or side-chain solutions, which is no solution at all if the main chain is compromised like this. Bitfinex does have a voting portal, so on the producers chart you will need to know that it isn't just one person casting the vote, but there is no transparency to this system and we have no way of knowing how many of these votes are from their holdings or their users. Most EOS users prefer Kraken as it has a USD trading pair, so I question how valid a rebuttal this is.
This may seem like FUD, but these are not opinions but real world problems in developing a drastically different blockchain than the norm. My hat is off to Block.one and EOS for accomplishing what they have, but I don't think EOS will be the silver bullet and will ultimately fall to ruin when someone takes what works so well in EOS and matures it in a project without any of the above problems. With all that said, I am having a blast on EOS Knights and will continue playing. I'm never going to be a major EOS holder for the above reasons, but I do think EOS has done a lot of things right with how they developed it.
EOS is a deep state controlled coin and sadly will likely succeed in the long run due to this. The creators aka Brock Peirce and Block One and its ties to Tethet and Bitfinex are overall shady at best if you really look into it but I have a strong feeling it will overcome its obstacles and become a major player in the crypto space... just as planned. It's sad really...
The people will decide if it stays or not. Right now adoption isn't good, the marketing and PR are also not very good, and it has seen quite a few hiccups (Example: Having to shut down the Chain right after launch). I love a good conspiracy theory as the next guy but I just don't see it happening. That said, there is no denying there are other factors at play, especially when you have 4 billion dollars raised from the ICO. I have no idea what they are going to do with all that cash, but it is the one outlier that does play in with your theory. I'm going to wait and see, but the EOS blockchain does have some good advancements I have taken note of. Grab some popcorn because I think this is going to be a wild ride.
I think that as long as people provide feedback and give these perspectives you have shared, something could be done to improve the great concept that EOS has and wants to deliver. Unfortunately, most of the EOS ICO was probably bought by mostly speculators with no development interest and that has held most of the tokens on exchanges where they cannot take part of the protocol. The other issue is that there seems to be some technical know how in order to actually set your account up in a simple and secure fashion to really participate. I hope to give it a try now that Ledger has a hardware wallet solution but I am the first to admit that I am intimidated by doing the setup and being able to vote. This is what I believe is driving the limited participants on the network. Hope it improves though!
Considering how difficult it is to directly interface with other chains, I found EOS to be very good. I loved how easy it was for me to work with the wallet and plug it in to scatter.
I just started doing a bunch of How-To videos on various things that folks consider difficult but are actually pretty trivial once you do them a couple times. Your comment definitely has motivated me to move EOS up the list to do a tutorial video on initial wallet creation, secondary wallet creation, plugging the private key into Scatter, explaining the difference between owner / active keys, and general usage. I'm a bit surprised that this information isn't explained very clearly. I've been doing about one video a night, so should be able to jam through all this content before Friday.
I am totally unaware of these problems because every time I tried to understand what EOS is in the first place, what it can do for an ordinary user like I could be, I did not find anything. Steemit has the advantage that its fundamental concept is very easy to understand: a social network that pays you. Point.
What is the fundamental concept of EOS? How does someone like me who does not understand more than the basics of this world benefit? And if I wanted to enter their platform, how do I do it? I did not find any instructions or anything, at least not in Spanish, which is my native language. English as you can see I speak little.
By the way, If you are interested, I leave a link to a platform that pays you with its cryptocurrency just to register and look at its content: https://watch.getalx.com/login?referralCode=RCLNL3
I only ask that if you register you do it with this link that so they pay me some cryptos too. And, of course, it will be convenient to invite your friends with your own link that you will generate once registered.
And another one that is a search engine like google that pays you just for searching:
https://www.presearch.org/signup?rid=539163
I'm a systems engineer by trade and deal with traditional servers to accomplish pretty much everything that an average user interacts with on a daily basis.
The idea behind EOS is a decentralized operating system where instead of a traditional server, hosting an app like banking, accounting, point of sale, file storage, etc. you could just pull up a website and do all this and have it stored on a blockchain. Pretty neat concept.
That said, EOS is still a long way off before this is possible. The technology can technically do this, but the chain isn't performing all that well, high fees to perform basic tasks, etc.
Overall, I'm impressed with EOS and for a first run at accomplishing this, I think it is great. That said, it is just a FIRST run at it, and I think there was a lot of fundamental issues with it and will not see mainstream. I do think future blockchains will take the things EOS has done right and learn from the things they didn't.
Ok, i understand. But my be EOS could solve in the future its problems, ¿or not?
Steemit in the beginning had problems too.
Somethings they can and will solve. Other things are part of its foundation and pretty much doom its future for mainstream appeal.
The big thing is having 10 wallets control the entire platforms wealth. You can't tie up 50% of the coins in circulation to 10 wallets. It's just too lopsided. You get no distrubution until you get past 90% of circulation supply.
Source: https://medium.com/fortuneinsider-com/eos-wealth-inequality-top-1-6-of-holders-own-90-of-supply-78d7bf785b6f
As you see by this 2570 wallets control 90% of circulation (That is about 900,000,000 EOS controlled by only a few entities).
Steemit had this problem and still does to a lesser extent. As time has gone on the whales have distributed more of the coins. So far the trend in EOS is more of the wealth has gone to the whales INSTEAD of being distributed. This is a huge problem as EOS just doesn't work when most of the big holders don't actively participate on the chain. So effectively it is running at 10% with no real outlet to improve. Also noone with a brain will want to invest in EOS as when you have only a few entities controlling so much wealth, if one of those dumps, it could crash EOS to damn near 0. It's a giant problem with no solution, but in the meantime I encourage people to spend time learning EOS and avoid investing because the price is extremely bloated imo.
We will see what they can do i 2 years. I agree that a huge danger is there when a handful of people hold so much of the wealth.
Essentially by having a token distribution like that you have tiny blockchain use. You want the money pouring in but when it does and you dont guard against horders there is no way get wider adoption which should be your goal. Those tokens just end up floating in the air.
If FUD, and i mean real FUD would happen, EOS could disapear in a week. STEEM is another thing all together in this case. We have strong believers, we have a 3 month power-down time and you have token distribution tied in into the system as a whole (although inneficient) that will eventually and slowly lead to more individuals holding Steem tokens.
@christitus. Good explanation! So clear and easy to understand! Thanks so much!
You ought to write more article like this, intro to crypto. Or the impact of cryptos on future world!
Great article! This is very informative.
Thanks a lot.