The centralization vs. decentralization issue is at the core of the cryptocurrency movement. The entire premise of the cryptocurrencies was hinged on the claim that it will provide a relief from the unfair tendencies of the central banks. The control over the capital and its manipulation for massive gain was one of the major factors for the 2008 economic crash.
A report recently came out which claimed that when government policies are seen as seriously faulty, people search for alternatives. The arrival of Bitcoin around the same time and its adoption within this decade can be in part attributed to the incompetence of governmental policies.
The whole crypto movement is now divided into two factions when it comes to future. Purists want to save the original purpose while the pragmatists want the expansion at any cost. Recently, there was an event which brought these larger concerns onto the central stage once again. EOS has huge centralization issues which came to the forefront when they froze 27 accounts this week.
EOS Bug Fixes
When a bug was found in the Mainnet and its launch was delayed, the developers at EOS didn’t resort to consensus protocol experts. Qihoo, a Chinese firm as now shared its convo with EOS CTO Daniel Larimer. They informed him of EOS out of bound weaknesses. These weaknesses enable hackers to exploit and compromise the EOS node.
The Qihoo team said, “We found and successfully exploited a buffer out-of-bounds write vulnerability in EOS when parsing a WASM file. To use this vulnerability, the attacker could upload a malicious smart contract to the nodes server, after the contract get parsed by nodes server, the malicious payload could execute on the server and take control of it. After taken control of the nodes server, an attacker could then pack the malicious contract into the new block and further control all nodes of the EOS network”.
Qihoo found the loopholes in EOS system and exploited them. They inform the EOS of the vulnerabilities. Later EOS claimed to fix them. However, they didn’t resort to consensus protocol. Qihoo found that the issue was not completely fixed and hackers could still exploit the blockchain. After that, the critiques of the EOS blockchain and its management is getting only louder. The report about 1% owning almost 85-90% of EOS coin doesn’t help.
Emin Gun Sire, a renowned crypto expert, and professor at Cornell University critiqued the developers. Nick Szabo, a successful entrepreneur of smart contracts, condemned EOS for its centralizing ways of handling problems.
The critics are pointing that the bug bounty system created by EOS developers in response to Qihoo info is not sufficient. Mr. Sirer quipped that the fix is not even practical enough to locate conceptual and structural errors with the protocol.
He noted, “The EOS bug bounty is designed to catch simple coding errors, not conceptual errors with the protocol. EOS friends, did you get any help from an expert on consensus protocols? You know not to roll your own crypto. Why are you rolling your own consensus protocol? This is like not inventing your own scalpel, but then going ahead with brain surgery.”
Mr. Szabo was fiercer in his critique. He commented, “In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol, you must trust a ‘constitutional’ organization comprised of people you will likely never get to know. The EOS ‘constitution’ is socially unscalable and a security hole”.
Violating their own Whitepaper
The issue here is that EOS developers are violating their own constitution. Article IX of the EOS white paper talks specifically about this issue. EOS New York co-founder Rick Schlesinger said that the tech is still in its nascent phase and they are experimenting on how best to respond to the community’s will.
Article IX of EOS constitution says, “All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”
Others like Charlie Shrem, the founder of Bitcoin Foundation categorized EOS with Ripple given the centralization issues. He also said that mass adoption is not the way to go if it means losing the basic idea behind the cryptocurrencies.
Thus, the purists vs. pragmatists’ paradigm is still in play. However, the perception of betrayal of original movement is not a good one. EOS prices took steep decline after the news broke. The issue of centralization is going to come back in the crypto community.
Disclaimer: Koinalert’s content is only for information purpose in nature and should not be considered as investment advice. Do your own market research before investing in any cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.