The original purpose of blockchain technology was based on the tenet of decentralization. Where one group did not have too much influence, it would be near impossible for corruption to take place as it would be contained. It came with its own set of risks, and there were clear and apparent drawbacks.
Millions, if not billions, have been lost or stolen due to a combination of phishing scams, lost accounts, or hacked exchanges. It was understood within the cryptocurrency community that this was the price for pure decentralization. Users either have control over their data or they outsource control to another entity that they trust.
Unfortunately, it seems that, over time, the cryptocurrency community has been veering ever closer towards centralization policies and is increasingly beset by political problems and base greed more typically associated with the financial system it is intended to replace.
The DAPP Development War
EOS is an example of this. The EOS constitution essentially appoints a body (ECAF) to arbitrate in disputes. Regardless of the integrity of the authority, it is no different than any standardized regulatory authority. In fact, it is worse so far, as it has been known to close accounts without due process.
However, this is not an attack on EOS. There is widespread fragmentation in the cryptocurrency community among nearly all coins. The war between privacy coins (Monero vs. Dash) seems to have taken a back seat to a more intense battle between Ethereum and Tron/EOS. The fight between these three has intensified with dedicated groups of followers and developers. Justin Sun of Tron is known for being controversial, and Vitalik Buterin of Ethereum has been pumping his cryptocurrency in response. Even the Bitcoin vs. Bitcoin Cash struggle pales in comparison to the ongoing DAPP development war.
Meanwhile, the Ripple CEO has been actively bashing Bitcoin at every opportunity in recent months, and the BIS issued a report about the dangers of cryptocurrency – although the infighting within the community itself is far deadlier than any statement from a traditional centralized authority. IOTA continues to be criticized as the technology developers love to hate with many claiming that the ideas have not been put into practice as well as flaws in the design. As cryptocurrencies adopt features from other coins, there will be increased competition as they encroach on one another’s space.
Causes of Fragmentation in the Cryptocurrency Community
The main issues surrounding the fragmentation in the cryptocurrency community are primarily related to technological governance and decision-making capabilities. This is best exemplified in the scaling debate that led to the Bitcoin split, ultimately creating Bitcoin Cash. The Bitcoin blockchain has undergone at least 44 forks since the split, itself becoming further fragmented. This is also why EOS is coming under criticism, with a centralized ECAF body to arbitrate in disputes, without giving any reasons for its decisions.
It might serve to remember that the first cryptocurrency, Bitcoin, had no fundraising and had no figurehead or group to rally around. With the subsequent billion dollar ICOs and vested interests, fragmentation was bound to occur. Cryptocurrencies that put a focus on decentralization are more likely to succeed in the long run, as they are more in line with the core ethos of blockchain innovation.
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.