Bitmain, the company threatening the world with complete domination of the Bitcoin blockchain, is now one of the 21 block producers for EOS, a Chinese competitor of Ethereum. The growing monopoly of Bitmain and the centralised nature of EOS have attracted criticism, and this development is unlikely to assuage any fears.
EosAntPool https://t.co/0nLuAsxhKN has become one of the 21 #EOS block producers. Thanks so much for all your support, vote and trust. EosAntPool will keep working on #EOS community development and construction. Let’s rebuild the world together. https://t.co/nTkoEDgjOW pic.twitter.com/xHcj6ZyHcw
— AntPool (@AntPoolofficial) July 3, 2018
EOS, created on the Ethereum blockchain, is a blockchain platform that supports smart contracts, like Ethereum, but promises greater efficiency and a larger capacity. Issues with EOS are significant because of the money involved – it raised an unprecedented $4 billion in its ICO, which lasted for a year, and has a market capitalisation of almost $8 billion at the moment.
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The platform uses a consensus mechanism called delegated proof-of-stake, which means that blocks are validated (mined) by a small number of nodes instead of by everyone in the system. These nodes are selected by a public vote.
This system has attracted criticism because it is arguably too centralised – block producers are actually organisations/companies dedicated only to this activity, and some argue that the voting process is susceptible to manipulation. For example, the company behind EOS, which owns 10 percent of EOS tokens, will soon start voting in these elections itself.
Speaking of centralised…
Bitmain is a privately-owned manufacturer of Bitcoin mining equipment and operator of the world’s biggest mining pools. It is originally from Beijing but now has offices in Amsterdam, Tel Aviv, and Zug. It made an estimated $3-4 billion in operating profit in 2017.
Bitmain is responsible for more than 45 percent of the world’s Bitcoin mining. This is making people in the community nervous because if it reaches 51 percent, it will theoretically be able to undermine the integrity of the Bitcoin blockchain by artificially guiding its direction and blocking the mining efforts of other players. This is known as a 51 percent attack.
Antpool, one of Bitmain’s mining pools, is responsible for 15 percent of Bitcoin mining. On Tuesday, it received enough votes to become one of the block producers.
According to eostracker.io it received almost 55 million votes and is earning 868 EOS a day, approximately $7,700 according to the current rate according to coinmarketcap.com.
Another block producer is cryptocurrency exchange Bitfinex, which is earning just over $9,000 a day. Bitfinex is no stranger to controversy itself.