Vote if you want to raise the value of EOS
Weiss Ratings, a Palm Beach Gardens, Florida financial research company, recently downgraded the technology score of the EOS cryptocurrency, from A to A-. The reason was explained in a tweet on June 7 in which centralization concern were cited. Dan Larimer, founder of EOS, and EOS developer Block.one have not reacted to the downgrade, but rage has been noted in the EOS community. While some investors agreed with the centralization concerns, they argued that the issue isn’t something that can be handled right now. EOS holders should actively vote for block producers, according to the insiders. The limit on direct democracy has been exposed on the EOS governance system. Evaluation by Weiss Ratings On June 1, before Weiss Ratings downgraded EOS, Block.one issued notifications via several channels, saying there would be major announcement with regards to EOS. This raised the hopes of investors. Block.one that day unveiled Voice, a blockchain-based social media platform. Just as Larimer predicted on Twitter, some investors cheered while some expressed disappointment following the announcement. The price of EOS dropped following the announcement on June 1. Weiss hoped the EOS governance system would be fixed. In a March report, Weiss gave EOS an A rating, saying it was attempting to become the backbone of the new internet and that it was the leading cryptocurrency, challenging Ethereum. On June 7, however, Weiss noted the unresolved centralization concerns, even after the launch of the mainnet, as the reason for the downgrade. How does a credit rating affect EOS price? Following the downgrade, some took their emotions to the Twitter, claiming the need for EOS to be re-rated. This is because the price of EOS plummeted 20 percent after Weiss confirmed the rating. Weiss is a U.S. credit-rating company established in 1971. It became the first credit rating firm, on January 24 last year, to start rating cryptocurrencies. Its servers went down after it started the ratings due to explosive traffic from Korea. The company ranks 120 types of cryptocurrencies, from A+ to F, based on technology, adoption, risk and compensation. The best-rated cryptocurrencies on comprehensive level, according to its latest report, are Bitcoin, Ethereum, Ripple and EOS at B. Is EOS centralization really that serious? In November, blockchain-testing company WhiteBlock released the results of a test on EOS commissioned by Consensys, the global Ehtereum development studio. According to the test, EOS utilizes centralized cloud computing architecture without the fundamental components of a blockchain or peer-to-peer network. Whiteblock noted that EOS transactions can’t be cryptographically validated and that collusion among block producers for block validation and compensation as the problems. The company added that EOS coins and RAM have been built based on the entirely centralized system. EOS is closer to a distributed homogeneous database management system, and therefore is clearly different from Bitcoins or Ethereum, according to the test. Rani’s Note Ethereum is strictly decentralized, which is the essence of the blockchain. But it has limits, like slow transactions, high commissions and scalability. There are lots of issues to be resolved on the Ethereum platform. Larimer says a certain level of centralization is a must for a crypto project to function properly. If Ethereum is a direct democracy, EOS is a representative democracy, in which lawmakers represent the will of the people. The strength of representative democracy is the efficiency. Fast transaction per speed and low commissions are the result. But whether the peoples’ will can be properly represented is in doubt. In fact, collusion among EOS block producers was spotted. Among 21 block producers, 14 were Chinese-related and were found to have colluded. For a representative democracy to succeed, it needs the right leader.When picking a leader, EOS holders should all get to vote, or at least exercise their voting right. When that happens, collusion will be reduced, and interests will be properly reflected. Selecting a decentralized block producer becomes possible. For the EOS ecosystem to develop in the right direction, holders should actively exercise their voting rights. To raise the value of EOS, it needs investors who are interested in and willing to link their fate to EOS.