EOS is not a blockchain?

in #cryptocurrency5 years ago

Full disclosure: I own EOS and other cryptocurrencies.

As an EOS investor, I was kind of shocked to read the research that I will be detailing in this post and also a bit hesitant to share the findings. But in the spirit of sharing information to fellow investors with the hope of shedding some light on the several negative findings against EOS.

ConsenSys commissioned a thorough benchmarking of EOS, and the results are shocking: (1) EOS is not a blockchain; (2) It does not use cryptography; and (3) it lacks immutability.

Benchmarking firm Whiteblock was commissioned to perform a new experiment which concluded that the EOS token is essentially a cloud service for computation and is highly centralized. The result - it lacks some of the blockchain’s most fundamental aspects - immutability.

Whiteblock built a replica of EOS to perform the experiment

“It runs the exact same software. The block producers within the Whiteblock environment perform the same functions a block producer would perform in the main net,” Zak Cole, Whiteblock’s chief technology officer told Hard Fork. “We provision nodes within a controlled test environment, configure the network conditions between these nodes in order to emulate real-world performance, and automate their process and actions so we can observe their behavior and measure their performance in a deterministic manner.”

Whiteblock describes EOS as more of a network that provides promises for computational resources, stored in a “blackbox,” for users to access and the entire EOS system is built on a flawed, centralized model.

“EOS is not a blockchain, rather a distributed homogeneous database management system, a clear distinction in that their transactions are not cryptographically validated,” Whiteblock argues. “EOS block producers are highly centralized and users can only access the network using block producers as intermediaries. Block producers are a single point of failure for the entire system.”

Whiteblock says EOS doesn’t use cryptography

According to the research, EOS stores all data related to transactions in a kind of table designed by lead EOS brain Dan Larimer, called a Chainbase. When EOS network confirms transactions, Whiteblock claims block producers are simply cross-referencing new transactional data against this table, rather than confirming their legitimacy with cryptography.

The research also claims that EOS transactions only happen due to block producers updating the data stored in the underlying Chainbase, rather than cryptographically verified changes to the state of the underlying blockchain, as is the case with Ethereum.

“All of these actions operate in an environment that lacks cryptographic validation of the contracts and transactions,” says the research. “EOS is fundamentally the same as a centralized cloud computing architecture [client/server] without the fundamental components of a blockchain or peer-to-peer network.”

The Contrarian view

One critical thing to note is that ConsenSys, which commissioned the experiment, is heavily invested in the Ethereum blockchain ecosystem, the primary competitor to EOS. It describes itself as a “venture production studio” that focuses on the development of Ethereum-powered platforms.

What is strange is that EOS was actually borne on the Ethereum blockchain, starting out as an ERC-20 token. After Block.one launched the EOS mainnet in June 2018 to become its own blockchain, many Ethereum tokens have since made the switch including Everipedia, which is managed by Larry Sanger, the co-founder of Wikipedia.

Also, controversy is not alien to EOS and as a matter of fact any other altcoin. The launch of its mainnet was a nightmare, the whole process lasting more than a week, with block producers failing to agree on whether EOS was ready to go live all on its own. It was rumored that Block.one has paid over $400,000 to freelance security researchers for discovering critical flaws in code that weren’t fixed in time for the launch.

Next Steps

ConsenSys says it will use Whiteblock’s findings to develop comprehensive reports, which it will deliver to partners, including Ledger Capital, Bo Shen, Enterprise Ethereum Alliance, Microsoft, and Google. Academic institutions like MIT, USC, and Duke have reportedly committed to contributing resources to round out the research.

One of the listed partners, Bo Shen, is actually co-founder of Bitshares, an autonomous blockchain organization developed by Dan Larimer and released in 2014. The research continually highlighted architectural resemblances between Dan Larimer’s Bitshares system and EOS – particularly the ability to revert state and make changes all the way back to the genesis block.

I'm looking forward to seeing more research, experiments and studies like this not just on EOS but in all other major cryptocurrencies to make the public aware of the information that is exclusive to the "chosen few". As an investor, I need to be well informed to make better decisions on where to put my hard earned savings.

As an investor, I also do not expect any cryptocurrency out there to be perfect. As the classic Betamax vs VHS rivalry has thought us, the winner is not necessarily the one with the best product. Marketing plays a heavy role in deciding who wins and who losses.

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Interesting. I do not own EOS, but, since I am a fan of blockchains, I will probably do not buy.

If the experiment turns out to be true, then stay away from EOS. But it is still one of the most promising projects out there plus with $4 billion in its pocket, that's a lot of money to finance ongoing and future projects.

Their "analysis" applies to Steem as well. But the cryptography they seem to talk about is in the hashing to produce blocks, like Bitcoin and other PoW systems. While BitShares, Steem and EOS are PoS. There is no cryptographic calculating done to compete for hash power and mine a block. It's a different system. Their "analysis" fudges things, denying the term blockchain for anything that doesn't use cryptographic computation in the system to mine blocks. At least that's how I see it. It's a hit piece.

Thanks for sharing your thoughts on this. I'm avidly waiting for the response from EOS team on the experiment. Several EOS developers were contacted for comments but refrained from doing so but I hope they counter the arguments raised in the research. Interestingly, China released another study on which cryptocurrencies are the most valuable and EOS top the list followed by Ethereum.

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