Since the inception of Bitcoin, the world has seen dozens of cryptocurrencies trying to beat it, improve it, tweak it, change it, or straight up replace it. One notable example is the recent Bcash fork in summer of 2017. Now, the world is presented with Eco — a blockchain seeking to outpace Bitcoin and become the first cryptocurrency adopted worldwide. What sets this one apart from the many others that have tried and failed before it is that it’s spearheaded by Uber’s co-founder Garrett Camp. With high tier connections in relevant industries, a background of a hugely successful project, and a large amount of money, this version of “The Bitcoin killer” needs at least a brief spotlight.
It is important to note that Eco is a “Bitcoin killer” as much as any other cryptocurrency on the market. Their specific aim is to become a globally accepted cryptocurrency for daily payments. In this respect, it could be that Bitcoin remains king for transacting large amounts of money, while blockchains like Eco are used more for buying your coffee or a train ticket.
There are three main differences between the Bitcoin and planned Eco blockchain. Firstly, Eco aims to be more energy efficient, with nodes receiving equal pay for every block mined instead of relying on higher computing power to outperform rivaling nodes. This will incentivize each node to only do the bare minimum computation required to run the network and substantially cut down on electricity consumption. Secondly, these nodes will not be anonymous. Only verified people and institutions can run them and support the network. This completely removes the possibility of 51% attacks on the network even with quantum computing.
Finally, Eco will have a much bigger initial supply — 1 trillion tokens, and a few basic mobile and web apps. As per the white paper, the large supply aims to set a more standard price for every day use, with the division of the token going no more than 100th of an Eco, resembling cents values. This, compared to the satoshi values in the Bitcoin network, will aim to be much more appealing to people and have a lower cognitive load when transacting the currency. In addition, if need be, more than 1 trillion tokens will be generated to keep the price stable and act as a true currency. The simple initial apps also aim at getting the average person on board, rather than developers building for developers, which Eco’s White Paper alleges that Bitcoin and other cryptos have done until now.
Interestingly enough, there will be no ICO. 50% of the tokens will be distributed to the first 1 billion registered users. The other half will go into funding universities running the nodes, partners and advisors, and to the Eco Foundation, responsible for overseeing the development of the network. This is essentially an airdrop launch. It avoids legal uncertainties in the US regarding ICOs and securities and gives everyone interested a fair start so that many coins can’t end up in the hands of a few powerful individuals.
Image via Warranteer
Whilst the idea is a noble one, there are several issues that can be seen right off the bat. First, since only trusted nodes like universities and institutions will be running the network, it defeats the whole purpose of decentralization. It says in the white paper that this will still make it decentralized, but if they’re all known and working together towards maintaining the network, it opens the door to group fraudulent activity. The point of a decentralized network is not NEEDING trust at all in the first place. With these verified nodes, a level of trust must be put upon them that they will not act maliciously.
The point of a decentralized network is not NEEDING trust at all in the first place.
Secondly, the white paper is only 6 pages long, with no mention of any in-depth technological breakdown. In addition, there has barely been any code written yet. All of this is mainly just an idea floating in Mr Camp’s mind for now. Whether anything will come into fruition is yet to be seen. Nodes are expected to run by the end of the year, however, as per their white paper at the end, they’re still looking for people willing to work for them. This gives me little hope that a competent task force will be assembled quickly enough to create a minimum viable product in such a short amount of time. Eco is something to keep an eye on for now but won’t be relevant at all until at least early-mid 2019.
Finally, with a potentially infinitely increasing supply, this defeats the whole idea of a scarce finite asset that would appreciate overtime. The point of bitcoin is to become more and more expensive until there is global adoption and price stabilizes. If price is artificially kept stabilized by adding liquidity in times of greater demand, and removing said liquidity in times of lesser demand, then they’re no better than a central authority like the US treasury printing dollar bills to keep artificial levels of inflation going. This is not the vision of Satoshi Nakamoto and I cannot bring myself to support such a project.
While the Eco project appears to be an ambitious one, I am sure it will have some merit and be adopted by a portion of the world population. The founder has many connections, huge motivation, enough money, and knows how people work and behave. Undoubtedly this will help in bringing Eco into the mainstream. However, to take the rank of a truly global currency, it must be decentralized and void of the need for trust. With the current Eco philosophy that simply cannot be achieved.
Companies like Kik and Telegram are also pouring into the scene with their high supply, low priced coins, promising to be adopted globally. They too are founded by powerful, ambitious and intelligent individuals, and will pose a fierce competition to Eco. No doubt many others like Facebook, Google and the like will eventually throw their hats into the ring when they realize the potential for easy gains these ventures provide them with. Eco is just a part of a trend of such high profile “blockchains”coming into the market and I’d be surprised if any one of them comes out of ‘concept’ stage for too long before being forgotten. In the end, only time will tell, but personally I remain skeptical and continue to support the Bitcoin foundation the most out of every decentralized team working on blockchain technology.
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