EOS raised over $4.1 billion in June 2017 while Ethereum (ETH) raised $16 million in 2014. Bitcoin (BTC), which raised no funds, has been able to overcome many of the problems faced by EOS, Ethereum, and other cryptoassets. While EOS seems to centralize the production of coins and Ethereum’s decentralized applications keep underperforming, Bitcoin may soon become the internet of money.
In a recent tweet, @ArminVanBitcoin stated that four billion USD was used to create EOS’s centralized network of nodes and stresses that regular users are prohibited from running their own.
EOS uses delegated proof of stake (DPoS), which appears to make block production more egalitarian than traditional proof of stake consensus mechanisms. Using DPoS, users vote on who mints the next block. Theoretically, producers are selected based on democratic participation — not staked holdings.
While this may seem egalitarian, it does allow the same producers to keep being elected. As long as a limited number of nodes can continually display their worth to the network, they may consistently be elected. This means that a small group of block producers could centralize the production of EOS coins.
$EOS raised $4B to create an centralized network where ordinary users can't even run their own node.$ETH raised $16M to create a network that was hacked, forked and STILL doesn't have a single dapp with a legit usecase.$BTC raised $0 to create the internet of money.#Bitcoin
— A v B (@ArminVanBitcoin) February 23, 2019
What About Ethereum?
Ethereum appears to have a centralized governance structure — namely, The Ethereum Foundation, which is responsible for funding, developing, maintaining, and governing the Ethereum network.
Furthermore, Ethereum has faced a number of hacks. One of the most notable was the Decentralized Autonomous Organization (DAO) hack of 2016. This led to a hard fork and the splitting off of Ethereum Classic (ETC).
ArminVanBitcoin also notes that Ethereum has relatively few decentralized applications (dApps) with proven use value. According to DappRadar at the time of writing, only two of the top 50 most-used dApps are run using the Ethereum Network. The majority were deployed on EOS or TRON.
Is Bitcoin Better?
Bitcoin was created without raising any money. No initial coin offering (ICO) was hosted for the cryptocurrency. There were no private or public sales conducted to fund Bitcoin’s development or release.
On top of these facts, Bitcoin has been able to overcome most of the other issues affecting Ethereum and EOS.
Hacks, Attacks, and Vulnerabilities
In Bitcoin’s early years, there were apparent problems — but they appear to have been rectified without long-term consequences. For example, Jeff Garzik reportedly found a block containing 92 million bitcoins on Aug 8, 2010. The total number of bitcoins in existence is not supposed to exceed 21 million. This issue was fixed fairly quickly after discovery and those extra bitcoins are erased from the total supply. Since 2010, attacks on the Bitcoin blockchain have been relatively uncommon and unsuccessful.
Most vulnerabilities affecting Bitcoin do not affect the cryptocurrency directly. It is often exchanges, wallets, or other services which experience problems.
Many hard forks have been suggested and implemented to increase the scalability, security, privacy, and other features of the Bitcoin blockchain. Notable hard forks include Bitcoin Cash (BCH) and Bitcoin Gold (BTG), while Bitcoin Private (BTP) may be one of the most infamous merge forks in history.
None of these have had real staying power while many have problems of their own — with leading fork Bitcoin Cash recently experiencing its own split and becoming increasingly less relevant with each passing month.
Threats of Centralization
Lastly, while the threat of centralization exists, Bitcoin is far from centralized. Large industrial mining rigs, mining pools, and ASIC manufacturers and owners could attempt to centralize Bitcoin’s production, but this would be no easy feat.
To date, Bitcoin stands as the model of a cryptocurrency built on top of a decentralized distributed ledger.
Do you think Bitcoin will eventually become the internet of money? Will EOS or Ethereum ever truly rival the first and foremost cryptocurrency? Let us know your thoughts in the comments below!
Images courtesy of Twitter, Shutterstock.