EOS New York: At least six block producers are owned by the same entity
Do EOS token holders have any actual way of registering their dissatisfaction with block producers?
The EOS network employs a unique blockchain security framework known as "the honour system" (THS). This cutting edge security paradigm works by optionally requiring the block producers who control the network to abide by a strict code of ethical conduct.
Compliance is ensured through a system where violations of THS may result in being awarded large amounts of money. The reason this works is because the entire EOS community is motivated by altruism rather than crass commercial incentives, so block producers have no incentive to violate THS.
However, a damning new revelation from the EOS New York (EOSNY) block producer may have revealed some cracks in the THS security paradigm.
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
According to EOSNY, at least six current block producers are owned by a single entity, based on evidence that shows that all six of their domains were simultaneously registered by the same entity.
Cybersecurity experts have been universally shocked by the revelation, and almost unable to believe it.
When asked whether this means THS security paradigms do not provide adequate protection, one expert said, "Are you kidding me?"
"Seriously? Is this a joke?" another said.
For its part, EOSNY has requested the signatures of the top 50 block producers "so that all token holders may know who does and who does not condone such impropriety."
The revelation has resulted in several proposed solutions.
EOSNY's initial approach is an effort to make the information public, so token holders can apply social pressure to the misbehaving block producers. But that's about as far as it can go, because EOS token holders no longer hold any worthwhile voting power.
One other EOS proposal currently in the works is "1T1V," or "one token one vote" which should theoretically reduce the power imbalance of EOS and help prevent block producers from stacking the network with proxies. But there are three problems with this:
- It does nothing to solve the inherent voting inequality and the continual shifting of more voting power to the top of the EOS network.
- It's still just "whack a mole" as one EOS enthusiast said.
- It will never happen. If it was going to happen it already would have. Implementing this proposal would require top EOS block producers to vote against their own self-interest, and as the balance of power becomes increasingly lopsided, it only becomes less likely to happen in the future.
Opinion: All EOS token holders "condone such impropriety" simply by holding tokens
Most EOS holders would probably say they don't condone this type of behaviour from block producers. And yet, here we are.
The problem is that vote trading and the use of proxies by block producers are core elements of EOS's design, while the average EOS token holder has no actual voice. An individual EOS holder's voting power is insignificant, and even collectively all honest EOS token holders cannot change the course of the network.
And so, simply by holding EOS tokens after everything that's happened, people are showing that they condone this type of behaviour from block producers.
The same goes for EOSNY and all the other honest block producers. Simply by remaining on EOS, and doing all that free work for the less-honest block producers who would rather lounge around catching free money, EOSNY and the other producers are showing that they condone the current EOS status quo.
In the absence of anything else, the only voice EOS token holders have left is to sell their holdings, and go on strike. Because at this point, simply by holding EOS tokens you're saying you have no problem with block producer abuse.
It may be a purely symbolic gesture, but with the benefit of hindsight, it's also very rational. If you think solving these problems is required for EOS to take off, then there's really no point in holding EOS tokens until those problems are solved.
Plus, the markets collectively move with Bitcoin anyway, so it doesn't really matter which top cryptocurrency you hold.
In fact, EOS and Ether prices have been an almost perfect mirror of each other since July. If you want the full EOS price experience without inadvertently showing your support for block producer corruption, you might as well just hold ETH.
The chart below shows Bitcoin in candles, BNB in yellow, ETH in blue and EOS in orange, since the start of the year.
If you're an EOS holder, and you want a way to stand up and say you're not okay with this kind of block producer abuse, you could do a lot worse than just sell off all your holdings.
If things improve, you can buy back in. If they don't, you got out in time.
This is not financial advice, but it might be spiritual advice.
Disclosure: The author holds BNB and BTC at the time of writing.
- Ethereum price continues to slide, correcting by 9% overnight
- Bitcoin price drops 5% overnight as usage weakens
- Expert analysis: Ethererum’s price is consolidating, not stagnating
- Bitcoin price drops as US hikes interest rates – are they connected?
- 4 tips to streamline your Australian cryptocurrency tax in 2021