The mass of critical statements regarding the centralization of EOS forced Daniel Larimer to counterbalance classic cryptocurrencies with the PoW algorithm. Larimer says that the decentralization of Bitcoin in comparison with EOS does not look as solid as it is commonly believed.

EOS Block Producers

Validation of blocks in EOS is distributed between 21 block producers, while Bitcoin has an unlimited number of miners and has millions of devices. Most of them work in pools that are centrally controlled and represent a 51% vulnerability to attack.

In fact, network management is carried out by programmers who run protocol updates. Github administrators and mining pool operators are specific people who implement changes to cryptocurrency protocols. Larimer claims that the responsibility of the hidden Bitcoin managers is very low.

If the cryptocurrency is centralized, it loses its meaning. Digital coins must withstand any censorship and cannot fail due to a national crisis, hacking of technology or even a joint ban on the part of several countries. In the real world, mining pools are subject to the jurisdiction of the state in which they are located. In the case of Bitcoin, most pools are in China.

But how can one know the true degree of decentralization of something? To do this, you need to conduct a stress test. Unfortunately, this is not so simple, but answers to some questions may provide a general idea of ​​decentralization.

Can miners and operators of mining pools be held accountable if people suffer from their activities?

How many people need to be controlled in order to censor all transactions of a “decentralized” blockchain?

If there is even a small risk that the network can be stopped by the actions of specific individuals, then this means that the network is not decentralized enough. Only in the event of the complete eradication of all possible points of failure will attempts to censor cryptocurrencies prove futile.

Emin Gun Sirer, associate professor of computer science at Cornell University, specializing in peer-to-peer networks, expressed his opinion: “Existing coins show a decentralization theater. In the end, only a few organizations are involved in creating their blockchains. ”

In addition to the above disadvantages of bitcoin, the co-founder of block.one Brandon Blamer points to other problems – the cost of commissions to miners and scalability.

The mechanism is still very expensive for daily payments. 1800 BTC is paid to miners every day to process 360,000 transactions. At the current rate, approximately $ 28 goes out per transaction.

A solution to the scalability problem is found in the Lightning Network, but the second level on top of the blockchain only complicates the centralization problem. The Lightning Network allows you to create intermediaries that are vulnerable to censorship attacks by mining pools or manufacturers of ASIC devices, the developer EOSIO writes.

Improved Bitcoin B1

Although Daniel Larimer is very critical, he does not make high-profile statements without providing solutions. In fact, he is actively involved in the development of an algorithm that not only decentralizes Bitcoin but also allows everyone to mine. He acknowledged that he had contributed to the development of Bitcoin Core by fixing some memory leaks, and now he wants to further improve the protocol, only this time using EOSIO and the PoB algorithm. The initiative was supported by Brandon Blamer.

Larimer later hinted that the details of the collaboration would be revealed on June 1.

It is not yet known exactly how the new consensus mechanism will work, but recently Blockstack developer Jude Nelson talked about his work on hybrid PoW / PoB in his blockchain. Proof of Burn will be used as a way to protect the network by burning the bitcoins generated by Proof of Work, instead of consuming electricity and equipment.

Each network member who claims to be able to sign the next block will have to burn a certain number of coins to vote. Those who sign the block will charge a transaction fee and receive rewards for the block. A randomizer will be used to select a winner. It is assumed that owners of more BTC will have a better chance of winning the competition. Although the idea is interesting, the risk of centralization with “big pockets” can be a problem in the long run, which the creator of EOS does not want.

Leave a Reply

Your email address will not be published. Required fields are marked *