EOS' 4 Terabyte 'Blockchain Bloat': Analysts Claim EOS Has Critical Design Flaws

  • EOS is suffering from "blockchain bloat" as the total size of its blockchain data has already surpassed 4 Terabytes in 8 months since launch of its mainnet.
  • EOS has critical design flaws, analysts claim.

EOS Weekly, a “Crypto Twitter” account supporting the ongoing development of EOS, published a video earlier this week in which it expressed concerns regarding the relatively large size of data stored on the EOS blockchain.

In response to various criticisms of the design of the EOS network, Tim Sweeney, the founder of the main company behind Fortnite, a popular online video game developed by Epic Games, remarked: 

According to an independent crypto researcher and Twitter user Hasu:

The absurd growth rate of the EOS blockchain shows again why networks need TX fees. When transaction costs are socialized on full nodes, demand to transact is infinite (e.g. for spam or fake activity.) The resulting blockchain bloat soon becomes a hugely centralizing force.

As crypto enthusiasts know, there are no costs associated with conducting transactions on the EOS network. Expressing his concerns regarding EOS’ “blockchain bloat”, Christian Antkow, a “gaming geek” and “bitcoin nerd”, said that EOS has “an unsustainable long-term growth model for such a young project.”

"Foundation Can't Hold What's Being Built On Top Of It"

Antkow compared the relatively large size of the EOS blockchain (data) to that of the Bitcoin network, noting: “Bitcoin, that has been around for over 10 years, can still comfortably run on a 500 GB hard drive for a many more years, still.”

Meanwhile, Guy Swann, a Bitcoin advocate, argued via Twitter:

There is no solution for [EOS’] fundamental design flaw. If the foundation can't hold what is being built on top of it, realistically the only "solution" is to start over with a new foundation.

When CryptoGlobe asked Swann to clarify what he meant by “design flaw” and why EOS’ highly experienced group of developers, led by Block.one CTO Dan Larimer and Block.one CEO Brendan Blumer, may not have anticipated such an issue, Swann remarked: 

Maybe they didn't hold this belief [storing large amounts of data on a blockchain is acceptable] specifically, but a 4TB blockchain in 8 months is essentially all the evidence necessary to prove they didn't have an accurate/sustainable understanding of what blockchain is useful for.

New EOS Client Software To Be Released

Despite issues raised about allegedly poor data management practices by EOS’ developers, the multi-billion dollar blockchain network’s development team is set to introduce EOS version 1.0. Commenting on the highly anticipated release of a new version of EOS’ client software, Luke Fitzpatrick, a Forbes contributor and self-proclaimed “tech geek”, wrote that the EOS referendum system had entered its public beta state a few months back.

Presumably the testing phase has been successful - as EOS’ developers will be releasing version 1.0 - which allows “anybody with EOS tokens to propose, comment on, and vote for code updates along with other new developments for the EOS blockchain”, Fitzpatrick explained.

Elaborating on version 1.0’s current state of development, Fitzpatrick noted that the new EOS client version is stable enough to support most real-world projects, however it might not yet be prepared to handle “mission-critical operations.”

Upcoming Bitcoin Halving Event Could Drive BTC Price Even Higher, Analyst Explains

Vijay Boyapati, a widely-followed Bitcoin (BTC) analyst, recently published a detailed Twitter thread regarding the potential impact of bitcoin’s block reward halving event - which is now less than a year away.

In a series of tweets, Boyapati explained how the BTC halving event “interacts” with the pseudonymous cryptocurrency’s “recurrent hype cycles.” The former software engineer at Google questioned whether crypto bull markets may be attributed to bitcoin’s hype cycles, while also noting what was learned from previous BTC mining rewards halvenings.

“Constant Downward Pressure” on BTC Price Exerted When Miners Sell

According to Boyapati, crypto miners are essentially running “marginal” businesses as most of them sell the bitcoins they mine to cover operational costs. The Bitcoin protocol releases new bitcoins at approximate time intervals of (every) 10 minutes.

When miners sell their bitcoins, the crypto’s price is affected by “a constant downward pressure”, Boyapati noted. He added that “without new money” entering the digital asset market, BTC’s price would begin falling sharply. According to his estimates:

At a BTC price of $10,000 approximately $14 million dollars must enter Bitcoin to offset the downward selling pressure.

He continued: ”During the [cryptocurrency] bull market, demand far outstrips miner sell pressure, but eventually the cycle ends and miner sell pressure is amplified by investor's fear selling.”

Once the selling pressure has been “exhausted”, the market cycle “reaches capitulation”, Boyapti argued. He also mentioned that the downward pressure, which results from miners selling, is then “equipoised” with the upward pressure imposed by bitcoin investors who refuse to sell. This group of bitcoin holders (or “HODLers”) think of BTC as a legitimate store-of-value (SoV). Due to these types of market activities, the bitcoin price reaches a “steady plateau”, Boyapti stated.

Hype Cycles “Only Create a Temporary Equilibrium”

He further noted that the “price plateau of the classic Gartner hype” (excitement and investor enthusiasm created due to new technological developments like bitcoin) is “only a temporary equilibrium.”

Boyapati also pointed out:

While supply and demand are evenly balanced during the plateau, the Bitcoin halving disrupts the equilibrium by halving the sell pressure.

After a BTC halving event, which effectively reduces the daily supply of newly minted bitcoins by half their previous rate, Boyapti believes:

The equilibrium demand of HODLers now exceeds miner sell supply, tending to move Bitcoin's price upward.

He explained that the upward BTC price movements eventually begin to “feed” on themselves and usually result in the “next” crypto market bull run. It’s also at this time that new investors enter the digital asset ecosystem, Boyapati noted.

Does Crypto Market “Discount Halvings A Year In Advance?”

The former application developer believes that financial markets “do not mechanically react to known future events.” Moreover, he emphasized that bitcoin halving “occurs on a predictable schedule.”

He went on to claim that markets “anticipate” important future events and that it seems, from past experience, that the “market discounts halvings about a year in advance.”

Boyapti also pointed out:

[Historically,] the Bitcoin market begins its upward ascent about a year before the halving, and about a year after the halving goes parabolic. But markets anticipate, so this [may] happen faster this time...It appears...Bitcoin halving is a key fundamental driver of Bitcoin’s monetization.