In an effort to unravel some of the most common EOS myths, EOSBasecamp was born.

We are doing our best to visualize market data and provide actual proof that EOS by almost all metrics is the leading blockchain in existence with the fastest growth rate of any distributed ledger on the planet right now. You may wonder why that is. Let’s investigate.

The most important thing to understand here before moving further is that at scale all blockchains will fall prey to laws of economies of scale. Satoshi put it like this: “The current system where every user is a network node is not the intended configuration for large scale.” – Satoshi in 2010.

The next thing to keep in mind is that replicating data across a thousand nodes is not real decentralization as you only replicate data across the same pool of nodes. For a really strongly decentralized system you would want data to be spread out across many independent chains that are independently governed by different stakeholders and block producers. For that you need an operating system. Now that we have established this, let’s dig deeper.

Is EOS Centralized? No. Here’s why it’s more decentralized than Ethereum

One of the most serious arguments against EOS that keeps creeping up: EOS is centralized and will not work at scale and will always be controlled by the wealthy. Let me show you why this is not just wrong but it is actually the other way around.

1 NODE COUNT LARGER THAN COMMONLY BELIEVED

I want to start this off with looking at the number of BPs in EOS which is not as is commonly repeated 21 but actually includes a long list of standby producers. You can verify the legitimacy of this list of 460 known block producers here (Last update: 8th February 2019). EOSIO is the only blockchain that can increase the number of validators arbitrarily (at the cost of latency). All other blockchains have already established hard caps.

2 DEMOCRATIC SUPPLY DISTRIBUTION



The EOS supply distribution is one of the best out there. Many projects used an ICO to collect funding. This in almost every case lead to a large distribution going into the pockets of early birds, people that participated in the ICO. If you missed out, no dice! Not so with EOS. EOS conducted a year-long funding round that was open to the public. This resulted in a very fair and widespread distribution of supply rather than a more focused supply distribution in the hands of a few.

VISIT OUR LIVE DISTRIBUTION CHART (Updated daily)

3 ACTUAL DECENTRALIZATION / REALISTIC APPROACH

Nearly all blockchains make the fundamental mistake of scaling vertically rather than horizontally. This could mean several things, so let me explain what I mean by that.

Horizontal scaling simply means establishing independent, self-governed blockchains that are not dependent on the main chain but can still interact with it (through IBC communication for example). This requires an operating system to quickly launch and govern blockchains. That’s what Parity and Block.one have been working on for the past few years.

First-movers like ETH and Bitcoin both use sidechains to implement layer-2 technology on top of their existing blockchain. This creates fundamental bottlenecks. Even if layer-2 can do a million TPS it will still have to store milestones for layer-2 transactions in some way, else what is the point if you don’t have a trustless anchor somewhere? Partitioning blockchains may not be feasible and has come under scrutiny by leading experts*. (*Study Source: https://arxiv.org/abs/1804.07356).

If sharding blockchains is not feasible, then that means layer-1 technology will always be capped at a low number of, possibly a few hundred transactions per seconds. In a scalable environment however you will need a magnitude more than that. That is why some blockchains may not work at scale even in the most optimistic scenarios.

But more problematic than the scaling bottleneck is that shards or sidechains are always dependent on the superzone (what people call layer1). In EOSIO, sister chains are independent from each other, meaning when one goes down the others just keep humming along. This does not mean there cant be sidechains (Note the difference between term sidechain and sister chain, where sister chains are fully independent and sidechains are validated by the same pool of block producers).

4 Hashrate Distribution: Study Says Quorum More Decentralized

A quorum of delegates is a very elegant way to not just solve the centralization issue, the scaling issues but most important introduce governance into the equation. Current-gen blockchains lack a proper governance system and tend to heavily exclude existing stakeholders. Both Bitcoin and Ethereum use offchain-governance to dictate in what direction the network is heading. This has the advantage that they remain very focused and can develop at their own pace but if you want to scale socially a governance layer is inevitable.

Above you can see the centralization issues of Bitcoin and Ethereum. A recent study clearly indicates a quorum of block producers is more decentralized

Bitcoin and Ethereum are centralized because top 3 miners in Bitcoin and top 3 miners in Ethereum control more than 50% of the overall hashrate. The study also states that a Byzantine quorum system of 20 block producers would create a better decentralization in real world than theoretically infinite-decentralized BTC and ETH. I quote:

These results show that a Byzantine quorum system [53] of size 20 could

achieve better decentralization than proof-of-work mining at a much lower resource cost. This shows that further research is necessary to create a permissionless consensus protocol without such a high degree of centralization

5 ONCHAIN COMPUTING NOT OFFCHAIN!

Even Satoshi knew that at scale not every user could be a node and that real scaling means embracing datacenters and keeping things on the chain rather than offloading them. Unrefutable Proof: https://bitcointalk.org/index.php?topic=532.msg6269#msg6269

The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don’t generate. – Satoshi

While many projects are busy offloading their transactions offchain and thereby negating the advantages of blockchains, most of the benefits like tamper-proof transactions can only be achieved by efficient blockchains that keep transactions on the chain instead of offloading them. The crux of the issue becomes even more apparent the more you study the size of the various blockchains out there.

It has become apparent that the Ethereum blockchain has become so large and unmanageable that node costs are skyrocketing. The turing-complete nature of the “world computer” bloats the overall size of the network to unsustainable levels. I say unsustainable because this will quite inevitable lead to a centralization of validators if sharding is not feasible (see study above why it may not be all that you were promised).

Ethereum’s full blockchain already exceeds 1 TB in size which is a clear indicator where we are heading. This means ultimately it has the potential to strip the remaining benefits from the unscalable structure (if Sharding fails).

6 Power Laws Dictate Centralization In ANY PoS-Based Chain

Simple economic laws dictate that fewer than 20% will control 80% of the chain. That is why it is factually incorrect to call Ethereum decentralized and EOS centralized. My tip to you, think of block producers as pool operators with many thousands of machines and employees. Also keep in mind the interchain future of blockchains and how Ethereum is nowhere near ready for actual decentralization, in governance & technically.

For more read our framework

EOS: A utility token

Misinfo: There is no actual use for EOS itself.

Truth: EOS is a utility token. In the same sense that you need ETH to send transactions, you need to stake EOS to send your tokens around.

#EOS: A BFT-chain with onchain governance to dwarf potential attacks swiftly.

Misinfo: Ethereum is more decentralized than EOS and EOS is so centralized it will be easy to attack.

Truth. EOS is BFT-(t stands for tolerant). It would require 1/3 dishonest nodes to stage an attack. Unlike other networks, EOS is guarded by onchain governance that will dwarf any potential attacks. Larimer also stated that it is possible to add economic incentives on top of dPoS BFT (see below).

What’s further, in Ethereum as of today you only have to take over 2-3 pools to stage a 51% attack. Since the owners know each other with most of them being located in China, a collusion is likely. Without proper onchain governance and a possible way for recourse after the fact, you will run into serious issues as we have seen with both the DAO and the Parity exploit. In both cases, a lack of onchain governance prevented a swift solution to the issue at hand. In fact, the DAO ended with a catastrophe and the Parity exploits to this day stays unsolved.

It is even possible to layer the Casper checkpoint algorithm with slashing conditions on top of the DPOS BFT block proposal system. Such an approach would create multiple independent validator sets with both political and economic incentives for good behavior.In Bitcoin, if a mining pool censors a user’s transactions, the community has no on-chain recourse. In EOS, that block producer can be voted out with minimal disruption to the network.

Misinfo: We need thousands of nodes in order to decentralize a system.

Truth: A recent study claims that a quorum of nodes will achieve the highest degree of decentralization.*(https://arxiv.org/abs/1801.03998)

Bitcoin and Ethereum are centralized because top 3 miners in Bitcoin and top 3 miners in Ethereum control more than 50% of the overall hashrate. The study also states that a Byzantine quorum system of 20 block producers would create a better decentralization in real world than theoretically infinite-decentralized BTC and ETH. I quote:

These results show that a Byzantine quorum system [53] of size 20 could

achieve better decentralization than proof-of-work mining at a much lower resource cost. This shows that further research is necessary to create a permissionless consensus protocol without such a high degree of centralization

Misinfo: Only EOS is vulnerable to vote-buying and the resulting attacks

Truth: All permissionless PoS systems are likely vulnerable to vote-buying & to some degree cartel formation (Addition: in particular when onchain governance systems are implemented which are arguably more fluid because token holders decide not a small group of developers all by themselves). Cartel formations is also likely in Bitcoin and Ethereum because the biggest mining or staking pools also know each other and can collude to achieve a price fix on fees to earn more from their activities. Keep in mind, pool owners are incentivized to increase fees as high as possible

EOS: The most energy-friendly blockchain

Misinfo: Crypto will always be wasting vast amounts of energy

Truth: EOS is 66,454 times more energy efficient than Bitcoin and EOS is 17,236 times more energy efficient than Ethereum (under PoW-model)

https://eosauthority.com/green/

EOS: Superior decentralization

Misinfo: EOS is a centralized shitchain with only 21 people validating transactions.

Truth: EOS is one of the most decentralized and fastest blockchains in existence. There are more than 400 active BPs participating in a fluid democracy. Many of the original BPs that launched the mainnet are no longer in the TOP20. On top of that, the number of BPs can be increased at any time at the cost of latency which will give EOS an upper hand in the decentralization race as the team makes progress on scaling EOS. Also, that are not 21 people but 21 companies and communities comprised of many individuals.

EOS is a blockchain and uses Merkle trees

Misinfo: EOS is not a blockchain and does not even use Merkle trees.

Truth: EOS uses Merkle trees just like any other blockchain. EOS does have a merkle tree over all the transactions within a block. This means it is possible to prove you have been paid without having to process all blocks nor trust the full nodes. These proofs are smaller than ETH because light nodes don’t even require the full history of block headers. That is a design choice that makes EOS so fast! Superior technology all the way. Dont let the misinfo campaign get to you. Keep in mind everyone has an agenda, including Consensys and the Ethereum foundation. Even if their intentions are good, they will try to sell you an idea and convince you of their superiority, that is just what happens in free markets and it is your job to figure out what’s what and whether the utopical technical claims actually hold up in reality. That they may often get ahead of themselves in promoting their ideas is also only natural.

Misinfo: No one is using EOS dapps.

Truth: EOS dApps currently handle millions of transactions per day—far more than Ethereum. In fact, EOS is the most successful blockchain launch in the history of blockchains.

10x on tx count

EOS is harder to censor than Bitcoin and Ethereum. Why is that?

Misinfo: Governments will have an easy time taking down EOS

Truth: ETH relies upon a peer-to-peer discovery process. Governments and ISPs around the world know exactly where every Ethereum node is and can trivially shutdown any and all public endpoints. Not the case with EOS

Larimer Is The Most Experienced Blockchain Developer In The World!

Misinfo: Larimers keeps jumping from project to project and is a horrible CTO

Truth: In the real world, that is called a track record. Dan Larimer creates products for himself and that is why they are so good and by all metrics the most widely-used blockchain systems. You may wonder why that is. Well, Dan Larimer was one of the few people in contact with Satoshi Nakamoto himself. He has been there since the beginning and has been creating blockchain systems for as long as Bitcoin exists. This unquestionably makes him the most experienced blockchain developer in the world.

Misinfo: Larimer is working on a new project not involing EOS

Truth: Larimer is ONLY working on EOS and has recently stumbled upon an idea to build much faster and scalable token Source: https://www.reddit.com/r/eos/comments/a19lxn/dan_larimers_statement_on_his_new_token_idea/

EOS adoption rates = MASSIVE (fastest growth of any blockchain)

Misinfo: No companies are building on EOS.

Truth: Some of the leading YCombinator startups are not building on ETH but EOS. Below you will see the reasoning WHY

EOS and the Enterprise: Only Blockchain With Permissions & Account System

Misinfo: EOS is not enterprise-ready

Truth: While ETH has a nice alliance, namely the EEA, those are mostly highly-customized forks of Ethereum, but the key is that Ethereum is not built for consortium chains nor has interchain capabilities yet. EOS is by design a consortium chain (based on superior DPoS which is a better model for enterprises) and is built in a way to adapt to real-life enterprise needs. Block.one as a first-mover recognized the importance of interchain capabilities so that value can flow between enterprise forks and the public chain. Case in point: Consensys trying to change corporate culture instead of focusing on what matters, enterprise adoption and interchains (consequently they dropped the ball). Further examples: https://www.prnewswire.com/news-releases/blockchain-startup-eos-pro-announces-enterprise-grade-eosio-distributed-network-300688941.html

Lastly, you need to keep in mind that Ethereum lacks an account model, meaning you cannot assign permissions to different accounts. You have your private key and that’s that.

One of the main differences of EOS with other blockchains is the account system. Between your funds and you, there’s an account. A 12 character name. And when you want to spend those funds, you need to sign a transaction for the account, not an associated key directly. Behind the account you can have one or more keys and those are on chain, and you can change those. You can alter them and there’s different permission levels. That’s really awesome. It also means you can do permissions management on your account. –Alexandre Bourget

EOS is feeless = less friction

Misinfo: EOS is not really feeless and is a shady economic model that will never work.

Truth: While there are costs involved in sending EOS around they happen during the setup process of your account. After that transactions are free. The EOS locked in your account may undergo some fluctuations but you dont need to buy that much nor do you need to buy a token every time you want to perform an action on a blockchain. That is a vastly superior model that will reduce friction.

Misinfo: EOS will be governed by the rich and is the only system that is set up in this way.

Truth: In practice, pareto principles dictate that 80% of the supply will be controlled by 20% of stakeholders. That seems to be already the case with ETH and should over time become worse. The same will be true for EOS. All PoS or DPoS systems are vulnerable to this governance monopoly. A solution has yet to be found and in my mind will not be found (causes: human psychology and genes) unless people opt for a 1-identity-1-vote-approach (which obviously only works in systems with onchain-governance like EOS.

Misinfo: EOS dapps are 100% gambling dapps.

Truth: While EOS has some gambling dapps (a display of innovation and first movers) some of the most used dapps in existence are actually games such as “EOS Knights” or decentralized exchanges such as “Newdex”.. also some of the highest funded VC-vetted dapp teams are working on a decentralized Wikipedia alternative and a spiritual successor to “Second Life” (decentralized VR world)

Misinfo: EOS wasnt functional at the time of the ICO and raised an enormous amount of money illegitimately for nothing but a whitepaper and a testnet.

Truth: ETH wasnt functional at the time of the ICO and raised an enormous amount of money for the awareness at the time for nothing but a whitepaper and a testnet and still wasnt classified as a security

EOS really is scalable!

Misinfo: EOS does not scale as recent benchmarks have shown and only does about 250TPS.

Truth: The hitpiece study was issued by a direct competitor called Consensys (the largest Ethereum incubator) and used 5-year old hardware. For further information read this: https://old.reddit.com/r/eos/comments/9tw6eb/rebuttal_eos_does_use_publickey_cryptography_per/ Needless to say that 4000 TPS was observed in live environments but see for yourself https://bloks.io

Misinfo: EOS does not correctly implement BFT consensus and does not prevent cartel formation.

Truth: 15 BPs have to collude to get to the point where collusion can damage the chain. Further, only DPOS BFT can efficiently scale to an unlimited number of validators (at cost to latency). In essence, what it means is that EOS is already very, very difficult to corrupt and can more effectively decentralize their chain in the future than other chains can implement scaling.

Misinfo: AWS is more efficient than EOS. EOS is a shitchain.

Truth: EOS is a feeless blockchain that removes friction and allows the transfer of value across its own chain and potentially that of other EOS.io implementations such as TELOS or corporate chains (in the future). This friction-less movement of value is a radical 100x improvement over previous financial platforms.

Misinfo: EOS is not as fast as Block.one claims and can not scale beyond 250 TPS

Truth: EOS has already hit a peak of 4000 TPS. Evidence: https://old.reddit.com/r/eos/comments/9tw6eb/rebuttal_eos_does_use_publickey_cryptography_per/

Is EOS a security?

Misinfo: EOS is likely a security in the US regulator’s eyes.

Truth: As previously outlined, EOS is a utility token you need it just like ETH to perform actions (see above). Further, EOS is the most decentralized blockchain in current existence. The entire blockchain was launched by a community of block producers, there exist multiple implementations of EOS that are up and running. Unlike ETH, EOS was not sold to US residents nor was there a return promised. In ETH the number 100 token holder owns 0.144% of the supply. By comparison, in EOS the number 100 token holder owns only 0.1249% of the supply. This is slightly favorable for EOS. Due to the vast number of participants in the ICO you can expect a better supply distribution over time as more supply moves.

EOS has a massive ecosystem!

Misinfo: EOS lacks an ecosystem. No one has ever heard of EOS and will never catch up.

Truth: EOS has the largest ecosystem of any blockchain when it comes to actual users, developer tools and trading tools, network connections and transaction count. EOS boasts a transaction count of over 5M. Followed by ETH at 0.5M and 0.25M for BTC. We believe this is due to the feeless nature of the network which is an intrinsic network advantage that promotes a higher amount of usage and is critical for blockchain adoption going forward. This adoption rate has also lead to a swift adoption amongst developers who have created an entire arsenal to easily develop applications for EOS, which in turn will further enhance adoption rates.

Source: https://coinmetrics.io/charts/#assets=btc,eth,eos_left=txCount_zoom=1367107200000,1545264000000

Finally, I want to address the size of the actual ecosphere.

Many teams have been hard at work to create the largest ecosphere of developer and trading tools and here is the kicker => they are actually usable and have users already. I have personally vetted the legitimacy of some dapps by looking at their approx revenue streams and ability to fend of network exploits (see EOSDice incident).

* https://visionary.life/eos-ecosystem-for-developers-infographics/

* https://visionary.life/eos-ecosystem-for-traders-infographics/

A lot of teams like Sense Chat or WAX moved their entire operations onto EOS blockchains. Why is that? You now may have an idea of the why.

*NEW* Update On Misinfo And FUD Campaign March 2019

Misinfo: Someone recently transferred 1 trillion EOS and flooded exchanges with it.

Truth: The fake transaction was a so called deferred action and was picked up by a misconfigured API call. While these transactions can be picked up by APIs they would never get through BP and exchange validity checks and fail immediately with a hard_fail status. https://developers.eos.io/eosio-cpp/docs/communication-model

Deferred communication conceptually takes the form of action notifications sent to a peer transaction. Deferred actions get scheduled to run, at best, at a later time, at the producer’s discretion. There is no guarantee that a deferred action will be executed.

If you want to see the status for the transaction, you can find it here

https://bloks.io/transaction/b5ca20fc6a82f9625b3f9417239551387b04c63df826b35b8a5bbba2d4c2890a

Misinfo: The EOS blockchain has become so big that only few nodes store the entire blockchain. This threatens the security of the blockchain and may result in consensus failures.

Truth: History nodes are non-essential for a functioning blockchain. Validating node size is less than 200GB at the moment. This misinformation and FUD stems from a long held wrong belief that blockchains need to keep the entire blockchain history intact and all nodes need to archive the entire blockchain records but of course we have archival nodes for that. So the misinfo you hear about that this has security implications, let alone consensus implications is wrong. In fact this “bloat” is more of a problem for Ethereum as it is designed to run on many individual nodes rather than embracing economies of scale. For comparison see factual data below:

Comparison Blockchain Node Sizes:

Ethereum full node at 188 GB https://www.delphidigital.io/ethereum (Parity 150GB)

Archival node 2.12 TB.

EOS full validating node less than 200 GB, just the blocks are 128 GB https://eosnode.tools/blocks

Archival node 4 TB.

In any case, the EOS community and B1 have been working on solutions for a long time now. One proposed solution is the LiquidApps Network. This would create an additional layer to request transaction history at any moment and may lessen the burden of the Byzantine Quorum (our 21 BPs).

Light History Nodes on EOS