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Here’s why EOS will confiscate your tokens if you HODL for too long

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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.

Over the past days, EOS has received criticism for the delay in the launch of its mainnet, its poorly drafted constitution, and the string of vulnerabilities in its blockchain.

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.”

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Bitcoin: New way to launder income of Mexican cartels

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Mexico City.- Some of Mexico’s main criminal organizations laundered their profits globally through the use of virtual currencies such as Bitcoin. The above according to the report National Evaluation of Drug Threat 2017, prepared by the Drug Control Administration (DEA).

In this regard, the institution noted that China has become a major center of money laundering, for which large shipments are used from the Asian country, where cryptocurrencies have become very popular currencies.

In previous years, the preferred methods were money transfer systems. Today bitcoin and other virtual currencies allow cartels to transfer illicit profits on an international scale, ‘the report says.
For this reason, the PGR and the DEA decided on Wednesday to form a joint team to combat the financial networks of drug trafficking, a strategy that promises to be more effective than capturing the leaders of criminal gangs.

In previous years, the preferred methods for moving and laundering illicit profits, ie the smuggling of bulk money, was to use money transfer systems, money laundering based on commerce and the formal banking sector. Today, bitcoin and other virtual currencies allow cartels to easily transfer illicit profits on an international scale, ‘the DEA informed.
He added that for 2017 the sale of drugs in the US, represented profits of 64 billion dollars, 21 percent of all illicit money generated in that country at present.

Meanwhile, a second study noted that currently half of the bitcoin transactions are linked to drug trafficking, which means a total of 72 billion dollars. This goes hand in hand with a decrease of 27 percent in cases of confiscation of cash money by drug trafficking.

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Vault Coin (VLTC) Cryptocurrency Daily Volume at $1 as Price Down to $0.000064

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The cryptocurrency market took a massive tumble in the week following the SEC’s announcement that it would postpone its ruling on whether to allow the listing of the Cboe VanEck/SolidX ETF backed by Bitcoin (BTC) to September 30. When all was said and done, the total market capitalization dropped to as low as $189 billion, levels not seen since November of last year.

However, since hitting that low on Tuesday, the market experienced a fairly sizeable altcoin bounce that brought back more than $35 billion in total capitalization. The relief rally intensified late in the week as major blockchain projects announced significant exchange listings, technological milestones, and system updates.

As we head into the next week, investors will likely be keeping their eye on the price action of BTC, as it has been denied by the $6,500-$6,600 range multiple times and currently sits at around 51% market dominance. How BTC acts here will likely be indicative to the next major movement.

Here’s the rest of the week in review:

Binance LCX, a joint venture between Binance and LCX, has announced the launch of an upcoming fiat-to-cryptocurrency exchange. Binance is set to provide and maintain the platform, while Binance LCX manages customer support, due diligence, legal requirements, KYC, AML and government communications. Binance LCX plans to build a team of roughly 10-15 individuals to fulfill the venture in their Lichtenstein office.

Tyler and Cameron Winklevoss, the founders of crypto exchange Gemini, aren’t overly fazed by the recent SEC decision. Instead, while they wait for Wall Street and the SEC to get on board with crypto, the company will focus on expanding its product offering focused on retail investors.

Toshi, the Ethereum mobile wallet, has recently been rebranded as Coinbase Wallet. The Coinbase-developed app has been revitalized with a new name as the service merges into a larger effort to invest in products set to define the future of the decentralized web.

Bitmain, a leading ASIC chip maker and crypto mining hardware manufacturer, has more than $570 million in Bitcoin Cash (BCH) holdings, according to a pre-IPO investor deck. According to the documents, Bitmain has 1,021,316 BCH, which it purchased at an average price of $869. While this represented a total holding of around $887 million at the time of the statement, BCH has since fallen in value to $573, which means that Bitmain has suffered a ~$317 million loss in a little over a quarter.

This week’s market recovery was primarily driven by gains in VeChain (VET), Ontology (ONT), and NANO (NANO). The AltDex 100 Index (ALT100), a benchmark index for the industry’s leading cryptocurrencies and tokens, finished flat this week and currently sits at 79.40.

AltDex 100
Other cryptocurrency categories were relatively mixed over the last week. The AltDex Exchange Token Index (ALTEXC), a benchmark index for the industry’s leading exchange tokens, fell over 7% while the AltDex Privacy Coin Index (ALTPRV), which tracks tokens focused on privacy or security, is up around 2%. The new AltDex Masternode Index (ALTMSN), which tracks major masternode cryptocurrencies, dropped over 4%.

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IOTA, Vechain Lead Tepid Crypto Market Recovery on Sunday

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Vault Coin (VLTC) traded down -0.94 percent against dollar during the last day interval closing 11:00 on August 19th EST. Vault Coin presently has a marketcap of $1,950 and its 24 hour trading volume is around $1. Within the 7 day interval, Vault Coin is -0.16 percent against the dollar with a movement of 1.17 percent inside the last 60 minutes.

Now let’s take look at how similar cryptocurrencies have performed in the last 24h:

  • Stellar Holdings (HOLD) is currently at $0.00 against the USD, a -7.93 percent change since yesterday. The Bitcoin price of HOLD is currently at 0.00000004 BTC.
  • Eryllium (ERY) is currently at $0.00 against the USD, a -4.08 percent change since yesterday. The Bitcoin price of ERY is currently at 0.00000061 BTC.
  • ChatCoin (CHAT) is currently at $0.01 against the USD, a -1.15 percent changesince yesterday. The Bitcoin price of CHAT is currently at 0.00000215 BTC.
  • Pigeoncoin (PGN) is currently at $0.00 against the USD, a -1.91 percent changesince yesterday. The Bitcoin price of PGN is currently at 0.00000004 BTC.
  • PeepCoin (PCN) is currently at $0.00 against the USD, a -5.22 percent change since yesterday. The Bitcoin price of PCN is currently at 0.000000003 BTC.
  • Atmos (ATMOS) is currently at $0.01 against the USD, a -16.05 percent changesince yesterday. The Bitcoin price of ATMOS is currently at 0.00000133 BTC.

Vault Coin Info

Vault Coin has a max supply of 30,385,540 coins. It started on 13th October, 2016.

From cryptocompare.com: “VaultCoin is a Proof of Work cryptocurrency based on the X11 algorithm. You can pay or send money to anyone, anywhere in the world in the form of this internet currency for a low fee.”

Listed here are a few good links for those who wish to get more information concerning Vault Coin:

  • Website: 
  • Github: https://github.com/teamvltcoin
  • Twitter: Vault coin
  • Reddit: https://www.reddit.com/r/Vaultcoins/
  • Facebook: https://www.facebook.com/vaultcoinVLT/

VLTC: Info for Traders

People can obtain VLTC on exchanges such as CCEX, Novaexchange, TradeSatoshi, LiveCoin,

It’s not always viable to buy cryptos including Vault Coin right away using USD. Investors hoping to acquire VLTC may perhaps need to firstly buy Bitcoin or Ethereum from an market place which has got American dollar trading pairs such as Coinbase or perhaps GDAX. Traders can then use this BTC or Ethereum to invest in Vault Coin using one of the exchanges we detailed previously.

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