Nick Szabo Criticizes EOS For Their Ability To Control Accounts June 20, 2018 June 20, 2018 Joseph Young
Altcoin NewsJune 20, 2018 by Joseph Young

Nick Szabo Criticizes EOS For Their Ability To Control Accounts

Nic SzaboNick Szabo, a prominent bitcoin developer and smart contracts pioneer, criticized EOS, the fifth largest blockchain network valued at $9 billion, for its controversial ability to gain control of user funds, suspend accounts, and confiscate EOS tokens.

Earlier this month, prior to the highly anticipated mainnet launch of EOS, the Termination of Agreement of EOS became the center of a heated debate between EOS developers and investors.

The Termination of Agreement of EOS, also known as Article XV, explicitly described the power of EOS to suspend user accounts that are inactive for more than three years.

A Member is automatically released from all revocable obligations under this Constitution 3 years after the last transaction signed by that Member is incorporated into the blockchain. After 3 years of inactivity an account may be put up for auction and the proceeds distributed to all Members according to the system contract provisions then in effect for such redistribution

The EOS Termination of Agreement was heavily criticized for two main reasons: the ability of EOS to gain control over user accounts and funds in the first place, and the intent of EOS to interfere with how users utilize the EOS token.

Once investors purchase EOS tokens, similar to Bitcoin, Ethereum, and any other cryptocurrency, they should be able to utilize EOS however and whenever they are comfortable using. The US government does not dictate how and when the US dollar should be used; holders of the US dollars have the freedom to do whatever they please with the currency. Same with Bitcoin, a group of developers or individuals do not dictate the way investors should or should not utilize Bitcoin.

Essentially, Nick Szabo criticized both controversial aspects of EOS, condemning the control EOS has over its blockchain network and the willingness of EOS developers to interfere with its users to dictate the usage of EOS.

Lack of Decentralization

In a truly peer-to-peer system, a centralized group of individuals should not be able to confiscate user funds and auction them to the masses, because everyone on the network has equal right and authority to conduct three basic operations: hold, send, and receive information.

EOS is a delegated proof-of-stake network, which means that unlike Bitcoin and Ethereum, holders of EOS are responsible for processing data. As such, it is important for EOS tokens to continue circulating to ensure the right people, which can be described as developers and dapp operators, have the majority of the tokens.

But, instead of establishing a system beforehand to solve such an issue, EOS chose to implement a highly centralized method of confiscating user funds that have not been spent for over three years. Cornell professor Emin Gun Sirer, Nick Szabo, and other analysts have criticized EOS due to the lack of decentralization on their network.

AuthorJoseph Young

Joseph is a finance and cryptocurrency analyst. He is able to offer unique insights in todays market and future events