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“The Least Trusted”

EOS was developed by a company based in the Cayman Islands, it’s no surprise that this blockchain system is one of the least trusted in the marketplace, with several commentators branding it a scam.

Raising its initial funds via an ICO (which lasted for 1 year), it’s one of the least transparent coin offerings which was essentially a fork of the bitShares crypto system.

To this end, raising a HUGE amount of Ethereum is often cited as a core condition for the offering being successful, a lack of assets to back the system, and it’s generally woeful lack of transparency have lead an increasing number of people to question the system’s vitality.

The biggest warning sign with this product was that it had nothing built or ready for when it tried to raise funds via an ICO (funds – by the way – which were diverted to a Cayman Islands company so they’re basically untouchable by any sort of law enforcement).

This was backed by the simple fact that EOS tokens could not be purchased by citizens of the US. Whilst their reasoning was reasonable, the reality is that if you’re going to be offering a crypto (decentralized) currency, not accepting US buyers is like trying to start a car without a motor… it just doesn’t happen.

Typically, a new cryptocurrency will be based around some new idea predicated by the founders of the technology. Their use of the crypto system is basically just a way for them to realize their ideals. Ripple is a great example. Unfortunately, EOS doesn’t have this…

What is EOS?

Billed as a way to “introduce a blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications”.

In other words, they’re trying to design a new Ethereum by building a platform which is able to support smaller systems (known as decentralized apps or smart contracts).

Whilst there’s nothing wrong with this in itself, the core problem is their technical basis is extremely vague, bordering on nonsensical. They’re promising their system to be compatible with Ethereum and have been working on creating the software to backup their ICO claims (they had a 12 month ICO that promised a lot).

The system is meant to provide a decentralized operating system which allows developers to deploy and run decentralized application across 100’s, 1000’s or even millions of servers.

Unlike the likes of Ethereum or Bitcoin, EOS is designed to have unlimited scaling capacity and provide the ability to run almost any application (be it messaging, IoT, etc) without the need to create any extensive supportive technology. The team have also promised near-to-free transactions, much cheaper than standard architecture and certainly cheaper than the likes of Ethereum.

Who created it?

One of the main drawbacks of EOS is its lack of transparency with its founding team, especially those who hand in the development of the code itself.

From what is publicly available, the following is known:

Dan Larimer Creator of the EOS system and founder of two successful crypto coins STEEM and Bitshares, an enigmatic programmer who worked out all the technical details for EOS prior to its ICO. He is the brain behind the scenes getting it working.

Brendan Blumer (CEO) Former founder and CEO of ii5, whose debut product (1group) was a centralized property-listing platform for realtors in India. Before ii5, Blumer founded Okay.com (Hong Kong real estate platform), which merged with Asia Pacific Properties (APP) around 1 year after launch. Prior to this, he was heavily involved with Accounts.net, a US-based MMORPG trading platform (for accounts, weapons and such).

Brock Pierce (Chief Strategy Officer) Blumer’s LinkedIn profile says he relocated to Hong Kong at the age of 18 when Brock Pierce (currently Chairman of the Bitcoin Foundation and Co-Founder and Managing Partner of Blockchain Capital; founder of IMI Exchange, ZAM, and IGE) acquired an operation he had started (at 15), selling virtual assets on a website he had developed. Brock Pierce is also block.one’s Chief Strategy Officer.



These have been joined by several more now – according to the block.one website, around 16 are working at the company, although since it’s registered in the Cayman Islands (why?) we don’t have any access to its finances etc.

The big kicker, as you can tell, for us has been the whole Cayman Islands thing. Why would you base a company in the Cayman Islands unless you wanted to hide something?

Why does it exist?

Apart from wanting to create an Ethereum-like operating system for decentralized payments/processes, the system has been built around the idea of creating small decentralized applications which run across (potentially) millions of servers.

Unfortunately, we struggled to find any differences between this and Ethereum – both of which were designed to provide the use of smart contracts or decentralized apps:

The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications.

You can view the EOS Whitepaper here.

Trajectory

The EOS system has been growing at a steady rate for a number of months now, both in terms of price and transaction volume.

Having said this, the main problem that many have suggested about this coin is that it’s basically shrouded in mystery, with almost no reference to the founders or why it was created. This is a bad sign.

An increasing number of developers & analysts have now come out in support of the notion that the crypto marketplace is due a major correction in the early part of 2018. With this, a large number of systems that don’t offer much independent value will simply drop off the radar, leading to the eventual retraction and consolidation of the offerings.

It’s our opinion that “me too” systems – such as EOS – will fall by the wayside when the fresh inflows of money run dry. If it hasn’t proposed a major feature-set, or doesn’t have major adoption (such as is the case with Stellar) at this point, it’s very likely the currency won’t survive.

Thus, what we’ve seen from EOS is not very convincing.

Firstly, the majority of its circulation is based on the year-long ICO it held. Whilst this is not common in the space, what was worse was that the team sold a HUGE amount of its coins in the sale. This was seen by the community as a very bad move (over-inflating the value/price of the coins whilst diluting share).

Secondly, the system has not received much adoption. The key with a system like this is adoption (getting its core infrastructure used by business or governments). Ripple and Stellar have achieved this to a degree… EOS not so much.

What this means is that if the system doesn’t have a huge amount of trajectory.