EOS is once again in the limelight as a freeze has been ordered on 27 accounts by ECAF, the EOS authority designated by its constitution to arbitrate in disputes. The news comes shortly after an extremely controversial maneuver by the block producers to freeze accounts after a conference call discussion. ECAF later ratified the freeze. It is not certain at this stage whether or not the block producers will comply with the decision to freeze the 27 accounts, though previously they have deferred to ECAF and are bound by the EOS constitution to do so.
On the 22nd of June, an “Emergency Measure of Protection Order” was issued by ECAF who directed the block producers to stop processing transactions from 27 wallet addresses.
“It is hereby ordered that the EOS Block Producers refuse to process transactions for the following accounts and keys indefinitely. (Until further official notice and instruction from the ECAF.)”
EOS Without Due Process
There are some issues associated with the freeze. The freeze was ordered without an explanation. The block producers were ordered to freeze the accounts, and the ECAF stated that reasoning is to be provided at a later date. In all reputable legal jurisdictions, a due process has to be followed. The process has to be public, and reasoning is to be given for all judgments and orders. Due process is only suspended for matters of national security or in emergency situations.
A more pressing problem is that way that EOS is organized. There is no real argument that EOS is decentralized. It is hard to see how ECAF is different from any other centralized regulatory body where complaints are filed, and the organization makes a ruling. The only difference so far seems to be that ECAF can operate with a lack of due process, while centralized regulatory bodies have to follow rules and procedures. An EOS without due process is not acceptable to many in the community. As one Reddit user posted:
“Every fear I had about this governance model is becoming true way faster than I expected. What’s the point of having a blockchain if you’re going to put humans in a position of power? It’s ok as an experiment but the more money there is, the more corruption. It’s like we didn’t learn anything.”
Support Within EOS
The way that EOS is operating with a centralized authority does have some support within the community. And it is working, as EOS are effectively cracking down on clear and obvious phishing scams, which is to be commended. Many are very happy with the way that EOS is tackling criminality within its community.
No other cryptocurrency is having this success in a pure free market world where hacks and scandals seem to be the price of freedom. Over $1.1 billion in cryptocurrency related theft has taken place in the first half of 2018 – there are estimates that 5% of the Monero cryptocurrency has been mined illegally – and many ICOs are either scams or not going to turn a profit. EOS is scaring away scammers in the early stages of its development, a move that could be profitable in years to come. It is taking a proactive approach to resolving issues, which many appreciate amid security turmoil.
However, many who are enthusiastic about cryptocurrency draw a line in the sand about the level of centralization despite the practicality of the action taken or the integrity of the authority in question because centralization of any kind is viewed as a vulnerability, while decentralization of decision making ensures that no malice can ensue.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.
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