More Blockchain Drama Sees EOS Centralization Let Arbitrators Reverse Transactions


Centralization has been getting a bad reputation ever since certain leaders decided to concentrate power and shove the world into the flames of war. Tech enthusiasts have a similar fear of letting power in the hands of a focused few and its far-reaching repercussions. Thus a conversation online about a decentralized blockchain protocol, EOS, exercising authority over its network was interesting, to say the least.

A Reddit user, AUTI9003, uploaded evidence to show arbitrators on the EOS network who had reversed some confirmed transactions. This was done in a familiar legal process way, in fact, the EOS constitution has provisions for it. A claimant accused an unidentified individual of possessing private keys to its EOS account; it was claimed that these were obtained illegally via a phishing attempt. A “judge” was appointed to arbitrate when the user reached out to the EOS. Ben Gates, the arbitrator, under the management of Moti Tabulo ruled : “Under the powers afforded to me as arbitrator under article 6 of the Rules of Dispute Resolution, I, Ben Gates, rules that the EOS account in dispute should be returned to the claimant with immediate effect and that the freeze over the assets within the said account is removed.”

This seemed like a good and solid way to resolve complaints., akin to what is currently in place at companies with a conventional customer support model. A person from the company listens to both sides and based on company policies helps make a binding decision, seems all good and right.

This actually irked many, who questioned the wisdom using the EOS over a traditional legal system. Especially after the findings of Whiteblock, a blockchain testing firm that had found that EOS had fewer features of a decentralized blockchain and was closer to a cloud computing service. Their findings that the protocol lacked immutability, meant that central authorities could easily modify data on the EOS blocks, drew a sharp response from the internet. To add to that, many attacked the project over its scalability solutions. Questions were raised about the feasibility of ruling over even a couple of hundred accounts that get phished. The time-consuming process of case creation, evidence presentation and ruling and what happens to the accounts in the interim.

Responding to the growing discontented voices, the creator of the EOS protocol, Daniel Larimer responded with “Decentralization is not what we are after.” In a recent interview, he discussed how decentralization actually works as opposed to how he feels it has been perceived. He then went into technical depth referencing log scales to suggest that his projects like Steem and EOS were twice as decentralised as Bitcoin or Ethereum.

This conversation is certainly not an easy sea to navigate. However, anything that allows the block producers even a hint of an opportunity to work together and govern a blockchain, is not acceptable. The whole idea of this technology is to break from the master-slave relationship. Any system with power-sharing model runs the real risk of falling back into that relationship. To think of abandoning the basis of the whole structure censorship resistance and financial system stability, would be irreparably damaging.

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