If you are one of those people who love to buy cryptocurrency and forget about it for the next several years, then EOS might not be the one for you. It doesn’t want any of your HODLing.
Block.one — the company behind the EOS Network — has inscribed in the blockchain platform’s constitution that any EOS members who don’t put their tokens to use for three years could get their accounts terminated.
Such accounts will either be put up for auction or the amount held in inactive wallets will be distributed to the rest of the EOS token holders. The constitution says that redistribution will be done “according to the system contract provisions then in effect” for such event.
This is what the current draft reads about HODLing:
Article XV – Termination of Agreement: A Member is automatically released from all revocable obligations under this Constitution 3 years after the last transaction signed by that Member is incorporated into the blockchain. After 3 years of inactivity an account may be put up for auction and the proceeds distributed to all Members according to the system contract provisions then in effect for such redistribution.
So why would EOS have a problem with holding given how popular the HODL strategy is these days? We spoke to Rick Schlesinger, co-founder of EOS New York – a leading block producer candidate for the network – who offered some insight into the controversial Article XV.
According to Schlesinger, the reason is to ensure the platform does not deviate from its intended utility:
EOS is a decentralized operating system with computing resources accessible through the EOS token. EOS encourages token holders to use these tokens to build dApps and communities by staking tokens for RAM, CPU, Network, and eventually storage. These resources are scarce. If a user stakes for something like RAM, and that resource is not being used by a smart contract or other computation action then that user is in violation of Article XV. So long as a user is utilizing the resources they have, staking, and performing an action, then this Article is of no concern to them.
But here is the problem with this explanation: Block.one ran a year-long initial coin offering (ICO) for EOS and distributed tokens to practically anyone interested in buying them. Indeed, many of the people who invested in EOS cryptocurrency are enthusiasts looking to score a profit – and not developers seeking to build on top of EOS.
Schlesinger says that, while he can’t answer for Block.one, actively participating in the EOS ecosystem will be crucial to the success of the platform and this is precisely why the current version of the constitution is discouraging users from idly holding on to their investments.
“Regardless of the outcome of Article XV, we will be encouraging active participation in the EOS community regardless of whether or not someone is a software developer,” Schlesinger told Hard Fork. “Even if someone can just re-vote for a BPC or on a Worker Proposal once every three years that would completely negate any worry about Article XV.”
As Schlesinger also notes, the article does permit holding the coins long term as long as the wallets are performing some actions. So technically, you can HODL your EOS as long as you make at least one transaction (no matter how small) once in every three years.
In any case, Schlesinger points out that the constitution is not yet final and the clause in question might be subject to change. This is just a draft by the Block.one team, and the constitution could be amended by the community in the future.
It’s also important to remember that this is a proposed constitution as noted in Article XX. Also, in Article XI we have the ability to amend the constitution according to the community’s will. I would think that the community will rationally understand the nature of scarce computing resources and develop an alternative solution to the current Article XV, but we’ll have to wait and see once the chain is live and is able to be amended.
The fact that the community can revise the constitution at will means it could go through frequent changes, at least initially. Schlesinger notes that it ultimately depends upon what the majority wants. The community can bring a change to the constitution on whatever grounds they deem appropriate.
Schlesinger told Hard Fork that anyone who holds an EOS account with tokens is a part of this community and can call for a referendum. But, he further suggests that the opinions of influencers like Block.one CTO Daniel Lanimer could have significant impact on the way stakeholders vote.
Influencer impact aside, Schlesinger explains that the voting influence will ultimately depend on the amount of EOS voters hold – the fatter your wallet is, the bigger impact you have on voting.
He further argued that the EOS token is widely distributed, but a recent report by Trustnodes suggested almost 50 percent of all tokens are held by a total of 10 wallets. This clearly raises some doubts over how fair or democratic the voting procedures with EOS will be.
For the record, the largest holder is Block.one with 100 million EOS tokens – a staggering 10 percent of the total supply.
Indeed, even though the blockchain finally launched on Sunday, it is not yet live — pending the election of block producers.
Update 19:00 UTC, June 12: Schlesinger has since clarified that his sentiment is that the EOS community should actively challenge the constitution and any controversial stipulations it includes.
“I do think the community is going to scrutinize [Article XV] closely (as they should),” said in an email to Hard Fork. “This is why we’re here – to experiment with this nascent technology and learn about how a governed blockchain can respond to the community’s will.”
He has further downplayed the accuracy of Trustnodes’ token distribution report, arguing the publication failed to factor out the wallets of exchange desks from the calculations.
“The key misstep Trustnodes and others have done is that they’re aggregating the exchange wallets which account for many thousands of individual accounts,” Schlesinger told Hard Fork. “If you do not extract these accounts the analysis will be incomplete: garbage in, garbage out.”
Japanese Publication Evaluates Term “Cryptographic Assets,” Investigating Opinions Of Investors
Japanese Publication Evaluates Term “Cryptographic Assets,” Investigating Opinions of Investors
In Japan, there have been many changes in the regulatory measures staked in favor of and against certain processes in the crypto world. Recently, the government chose to amend some of the information found in the Financial Instruments and Exchange Law and the Fund Settlement Act. The new changes tighten the reins on trading and the involvement of exchanges. One of the big changes involves the transition from the terms “virtual currency” or “digital currency” to be “cryptographic assets.” As such the amendments also state that the exchanges much have the funds to reimburse customers, in the event of a theft via cyber-attack, as stated in a report from Nikkei.
The registration system in Japan for crypto exchanges was first added to the regulations in April 2017 by the Financial Services Agency. The goal was to create regulations that govern cryptocurrency but hacking attacks and a lack of oversight of anti-money laundering protocols have spread out throughout the industry. The FSA had set up a meeting to discuss the creation of stricter regulations, due on March 18th, and they have been trying to engage the public in the discussion.
Obviously, one topic that should interest the public is the renaming of cryptocurrency to “cryptographic assets.” The use of the term “crypto assets” has been seen a lot in mainstream media at even at conferences. Even if the crypto industry does not expand from here, the terms need to be the same across the border to prevent confusion with fiat currency, like yen or the dollar.
Ethereum (ETH) Price Loses Its Gains by 7% while Dropping Back to $139
The market has been euphoric with greens with Ethereum yet again leading the market with over 11 percent gains. The 2nd largest cryptocurrency by market cap of $17.3 billion that has been changing hands at $164.96 with 24-hours gains of 11.63 percent lost 7 percent and went back to $139 in a matter of few hours. In the BTC market, it is down by 1.94 percent, as per the data provided by Coinmarketcap.
Ethereum Price chart, Source, Coinmarketcap
This time, the daily trading volume has taken a bigger spike than the last time as at press time it has been at $5.7 billion in comparison to last weekend’s $4.2 billion. Given the surge in price until a few hours back as well as the trading volume, the next week could have been seen bringing new greens. However, the red has made the entry.
Without reds, the next target has been $170, with $200 seems like the real possibility here as well. When Ethereum price first surged, it has been expected that $170 will be soon coming in as crypto trader, Moon Overlord had said at that time,
“$170 feels like a magnet to me.”
With Ethereum already crossing $160, the real fun has been expected to start now.
“First target here at $163 reached, watching this level closely for what type of reaction we have. Ideally would like to buy any dip from here targeting $190-200.”
With Ethereum Constantinople hard fork coming this week on Thursday, Ethereum could be seeing the green. However, as we reported earlier, fundamentally this upgrade is not a bullish event rather a bearish one given the fact that without this upgrade, the supply issuance of Ether would have been less than what would be after this hard fork but the narrative currently is bullish and that matters.
However, as crypto trader Squeeze has called out for a short, the dip came as other analysts have also been calling out for but only once Constantinople passes through.
In the current red market bitcoin is also seeing a dump but like any other bear market, altcoins are seeing an even more crash. Though the market is bearish right now, it would be interesting to see if Ethereum breaks the $150 level again to reach $200 and if will further register more gain or will pop and fizzle once we make through the next week.
Where do you think Ethereum will go from here? All the way to new lows from here or another rise is sure to come? Let us know what you think!
Top 7 Cryptocurrency Predictions for 2019
Some days it feels like it’s all bad news for crypto. When the Federal Bureau says it’s not even a blip on the radar, the SEC delays another important decision, or the Chinese clamp down on content. The Ethereum scaling issue is putting everyone in a bad mood and regulatory uncertainty is causing confusion.
But, hey. If there’s anything we know about this crazy space, it’s that the situation can turn on a dime. Daily fluctuations and weak hands aside, a lot of hard work is being done. Countries like Switzerland and Malta are leading the way on regulation. Robust platforms are getting built. And those truly dedicated to crypto have hung up a “business as usual” sign despite the market slump.
But what’s in store for the year ahead and as we move into Q4 2018? Check out these top 7 predictions for 2019… Any thoughts of your own?
7. The Year of the Security Token
If 2017 was all about raising tons of money without fear of regulatory interference, the day of reckoning has come. In the United States, particularly, there’s an overall consensus from the SEC that most tokens are securities. And even if they aren’t, well, people just aren’t taking chances.
Therefore, STOs look set to replace ICOs in 2019, if not completely, then by a sizable amount. All US offerings will be held in compliance with SEC rules under Reg D 506 (b) or (c); Reg A+, or Reg CF. “The advent of security tokens in 2019 will be a big game changer, it will do to the traditional VC industry what email did to the post office,” says CEO and managing partner of Vellum Capital Eric Kovalak.
“Next year will be the year of the security token,” says Kyle Asman, partner, and co-founder of blockchain business advisory firm BX3 Capital. “People are tired of purchasing assets that aren’t tied to something with equity, a share of future profits, or a hard asset such as real estate.
6. Further Price Decline Before Upward Swing
You were probably hoping to hear about rainbows and butterflies and Bitcoin and Ethereum skyrocketing in price. Well, that isn’t necessarily going to happen. At least, not until a further drop first. According to Kovalak:
“The largest cryptocurrencies will test lower prices before new all-time highs. Would not be unreasonable to see Bitcoin go below $3,500 and I think at these levels the fundamental story becomes hugely attractive.” Are you ready for another drop? Better buckle your belt!
5. Decentralized Exchanges and Greater Security
It’s not only John McAfee who thinks that decentralized exchanges will take over as we move into the future. There’s always been something just not quite right about centralizing a peer-to-peer technology.
But with decentralized exchanges suffering from poor usability and transaction limitations, they’re still struggling to take on the incumbents. 2019 will change all that, not only making transacting cheaper but also keeping our crypto safer since having one single point of failure has been many an exchange’s undoing.
4. Enterprise Adoption
Ledger CEO Eric Larchevêque said, “Enterprises are really at the gates of cryptocurrencies. They are waiting to invest as much as they can.” And 2019 will see larger companies integrating blockchain technology into their business processes. They’ll start to see the benefits of cost savings, fraud reduction, and greater efficiency.
Khaled Khorshid, Co-Founder | Technology for Treon, says “I predict that 2019 will be similar to 1999 when Enterprise Systems like Oracle, Siebel, Clarify, SAP, Broadvision, and others brought a leap in companies’ efficiencies by automating and integrating business processes. Starting in 2019 Blockchain technology will take companies to the next level, from data management to the information age. DApps will be the focus.”
3. Institutional Investors Jump In
As regulation finally makes it to a point where traditional investors are comfortable enough to go all-in, the crypto space will explode. Projects that are similar to existing financial systems will gain in popularity first, including Bitcoin Futures and ETFs. Says Zhang Jian, Founder of Fcoin:
“2019 will be the year that traditional investors within the stock market will take the leap into digital assets. Compliance standards and regulations will begin maturing in their understanding of blockchain, both domestically and internationally. As these specific regulations materialize and roll out to the public, a new wave of market-makers will pour into the space.”
2. Scaling Solutions
“The most interesting ongoing development in cryptocurrency today is the prototyping and release of Layer 2 solutions such as Bitcoin’s Lightning Network and Ethereum’s Plasma,” says Co-Founder and CSO Dhruv Bansal of Unchained Capital. “It’s become clear that cryptocurrencies lucky enough to attract sufficient investors and users inevitably succumb to the twin afflictions of increasing fees and limited throughput.”
Solving most existing blockchains’ scalability issues can and must take front and center in the year ahead if they’re to stay in the race. Says Bansal, “Bitcoin’s Lightning Network was beta released to the public earlier this year and already has some 3000+ nodes with 10k+ payment channels between them, providing a capacity of more than $500k in BTC for near-instant peer-to-peer transactions.
Ethereum’s Plasma project has not yet launched but a new paper by lead developers Vitalik Buterin and Joseph Poon suggests much progress has been made on the structure and design of Ethereum’s answer to the Lightning Network.” Watch this space.
1. Mass Adoption
That 2019 will be the year of mass adoption of cryptocurrencies is hard for many to believe. Most of the wider US and UK public have never heard of blockchain or–if they have–think it’s something illegal.
Most likely, when we start to see wider usage, Asia will take the lead, although, it’s doubtful that blockchain solutions will have enough maturity for mass appeal in the coming months.
The general consensus from the crypto community seems to be that next year is too soon to see mass adoption of crypto. We first need scaling solutions, investor buy-in, enterprise integration, tighter security, and, of course, regulation. But who knows what’s in store for 2020? That’s a little harder to gauge.