EOS freezes user funds, questioning its Decentralization

Date : 06/20/2018 @ 4:41PM
Source :ADVFN Crypto NewsWire
Stock : EOS (EOSUSD)
Quote : 3.10000000  -0.01000000 (-0.32%) @ 2:30PM
EOS share price Chart

EOS freezes user funds, questioning its Decentralization

Bitcoin Global News (BGN)

June 20, 2018 -- ADVFN Crypto NewsWire -- On Tuesday, it was announced that EOS Block Producers or those who have been given the responsibility of verifying and connecting new blocks to the EOS chain, had frozen seven accounts that they feared were compromised by phishing attacks.

Detractors of this action have pointed out that it violates the EOS constitution, which is the chief document that governs how the network is run by its users.

A quick look at the constitution reveals that even though this particular situation is not explicitly mentioned, it is alluded to.

In Articles II and III, related to perjury as well as network user rights, it is mentioned that users lose any right to coins that were gained by fraudulent means.

Secondly, it is also said that no coins should move without the consent of all of the users that are involved in the transaction, in question.

Nick Szabo, a well-known cryptocurrency pioneer and industry researcher, was quoted as saying that if a small group of strangers can theoretically freeze network assets with no warning for an indefinite amount of time, then in reality, EOS users have no control over their coins.

Despite this, on top of the suggestions in Articles II and III, the process of freezing the assets of these particular accounts began in the Telegram group, EOS911, which serves as a reporting destination for victims of phishing attacks and overall fraud.

Once the supposed phishing had been uncovered, the freezing of the affected assets was pushed forward by the fact that the EOS constitution seemingly hadn’t been ratified by the community yet. Therefore, in the opinion of the Block Producers, it wasn’t a valid governance document.

The New York EOS community stood in support of the decision of the Block Producers in a Steemit post, in which they said that the move agreed with the rights given to Block Producers and therefore, in support of how EOS was supposed to be governed.

Even so, as of now, according to an article by Coin Desk about the event, the community is largely standing against the whole process, still claiming that it stands against the idea that EOS is a decentralized network.

At this point, it’s reasonable to say that however it all ends up, the EOS constitution should be ratified as soon as possible and all of the rights of Block Producers should be made more clear. When all of this is done, EOS can hopefully avoid another incident of this caliber or worse, that could bring it down altogether.


By: BGN Editorial Staff






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