The delegated Proof-Of-Stake blockchain EOS could be more centralized than it appears due to its consensus model and the fact that the six largest block producer domains are likely operated by the same single entity.

EOS could be more centralized than everyone thinks

On November 28, EOS New York, which is one of the most respected block producers in the EOS community, revealed evidence that links six of the largest EOS block producers to a single entity.

1/ Six registered producers on EOS are managed by a single entity. This is unacceptable. We have requested the signatures of the top 50 registered producers so that all token-holders may know who does and who does not condone such impropriety. Read on for evidence and the URLs: pic.twitter.com/5ZhFvOWqPB — EOS New York (@eosnewyork) November 27, 2019

In EOS, Block Producers act similarly to miners on Bitcoin's Proof-of-Work model. The difference is that exactly because EOS utilizes a delegated Proof-of-Stake consensus mechanism, the distribution of the 'work' in the network is not as decentralized as it should be.

Essentially, bigger stakeholders have bigger voting power and therefore could not only influence the network's operations but could also organize unpredictable actions that might not be in accordance with the interest of the majority of the stakeholders.

EOS New York found crystal clear evidence in the eos.net Registry suggesting that six of the largest block producers that run the dPoS network are practically managed by a single entity, based on the fact that these domains were registered at the exact same time by the same organization.

The Twitter post made waves in the EOS community, with some users saying that smaller stakeholders should act on fixing this as soon as possible and others claiming that dPoS is by nature not Byzantine Fault Tolerant (the magic ingredient that made Bitcoin possible).

Skepticism around EOS might help it in the short term, but it's definitely a deal-breaker for macro investors

The Chinese state-backed blockchain task force at the Center for Information and Industry Development (CCID) ranked EOS as the #1 public blockchain platform, followed by the domestic DLT Tron, and then Ethereum, in their 14th report on the matter.

This can be attributed to one single fact that lies behind China's relationship with decentralized or 'hard to control' blockchain platforms such as Bitcoin, which didn't even make it into the list's top 10.

China is one of the most progressive countries when it comes to distributed ledger technology, so far that the country publicly announced their desire to be the global leader in the sphere. The People's Bank of China is even working on their own digital currency called DC/EP.

However, Mu Changchun, Deputy Director at the PBoC, said that the central bank is keen on working with private, or otherwise centralized, DLT developers such as R3, Tencent and AliBaba instead of public blockchain providers.

On the other hand, western blockchain rating firm Weiss said that EOS is downgraded from a B to a C- for exactly the same reason the Chinese are praising it.

1/6 We’ve had great respect for work and thinking that went into the #EOS project. But the Weiss Crypto Ratings model is not based on opinion. It’s driven by data. And that data has now caused a downgrade from B to C-. Here's why (full article to be published soon): — Weiss Crypto Ratings (@WeissCrypto) December 6, 2019