There is a lot of speculation behind the future of Bitcoin. Despite the current price slump, all forecasts and analysis still predict a major resurgence and exponential expansion of the crypto market. Market adoption and ease of use is inevitable given the massive amount of investment in building the crypto infrastructure. However, Bitcoin and its derivatives still face short-term uncertainty as the ecosystem continues its painful developmental phase. Last week, EOS announced the long awaited launch of its main net and Microsoft confirmed it was buying Github. These two events, as unrelated as they appear, will significantly impact the course Bitcoin travels in the near future. These incidents will decide the future of development applications (Daaps), future innovation, and market direction.
EOS was born under the premise that it is truly decentralized and free. Its founders claim Ethereum is centralized because Vitalik Buterin is the central figure behind all the decisions and changes behind the platform. EOS instead is an open source platform where the public can decide its future. However, the launch of its main net has revealed a number of issues that makes EOS a potential technical disaster.
First, Block.one, the company that created EOS, released its code (Version 1.0.0) as an open source as designed. This means anyone with the know-how can actually produce his/her own version of the EOS blockchain; therefore, it raises questions as to how many possible EOS blockchains could evolve – each a fork of the original. Second, EOS delegated-proof-of stake consensus revolves around 21 (delegated) block producers, whom are voted in by all the EOS holders.
In theory, those 21 guys can control the network of they want to. And to make matters worse, the average holder does not how the voting process works and a minority owns most of the EOS tokens. Third, EOS’ handful of investors can indeed manipulate, if not control the platform. Out of the 163,930 registered EOS addresses, only ten control 50% of the total supply of coins. These could be wealthy individuals (Whales), banks, or even exchanges; who thanks to their large stakes in tokens can decide on the price direction of EOS.
Only a few days after the start launch of EOS, Microsoft announced the acquisition of Github. Github is a website/test net where people post their software, in open source format for programmers, developers, and engineers to improve upon it. That’s where Bitcoin started. Satoshi Nakamoto posted the Bitcoin blockchain there and other like-minded nerds built it up. Well, now in the hands of Microsoft, new projects are at their mercy. So in essence, Bill Gates just took control of the future of cryptocurrencies. This argument can be drawn from the fact that the acquisition of Github is not a clear, obvious, profitable investment for Microsoft. For starters, despite being value at $2 billion in 2015, Github has never turned out a profit; this is due to entrenched competition (Gitlab & Bitbucket) and wasteful spending.
In addition, Github is host to codes that allow players to use their PCs as gaming machines and do away with Microsoft’s X-Box. Therefore, Microsoft now has to decide whether to allow or destroy its competition; this will affect the current environment of Github. And finally, Github is also home to a number of subversive content against the Chinese government. Again, this is a conflict of interest as Microsoft has multiple vested interests in China. These arguments beg the question as the real intentions behind the Github acquisition.
The official statement of Microsoft is simply to advance its access into projects that will benefit its own software and cloud services. Nevertheless, the doubt and distrust remains strong among the community as to the real purpose behind the purchase. A more likely explanation is that given the immense rise of popularity and investment, crypto currencies are a market too big for Microsoft to ignore. And Github serves as a test bed for a lot of new ICO’s software; making it the ideal venue for Microsoft to observe first-hand the development of crypto currencies up close.
The above mentioned factors represent an outright threat to the entire Bitcoin ecosystem. As decentralization and lack of central control are elemental principles of Bitcoin. EOS is to become the platform of choice for developing apps in the future; it is expected to replace Ethereum by the end of the summer, if not the fall. However, the intricacies of launching the EOS main net will likely push this timeline further down the road. Furthermore, EOS’s proposed scaling capabilities combined with its faster transaction reconciliations processes make it an ideal environment for applications to thrive.
Therefore, if EOS were to go stray and controlled by an ‘invisible hand’, the whole future of the industry would be at risk. Investors would see through the veil and prices will suffer. After all, the appeal of crypto currencies is the development of not only a new trading system, but a new world entirely. Digital currencies controlled by banks or corporations are nothing more than an upgrade of the current corrupt and misguided system.
Only time will tell how these events will test the current market and the future adoption of Bitcoin. Fortunately, there are options to EOS and Github; Cardano, Stellar, Ethereum (Sharding/Casper/Plasma) and Bitcoin (Lightning) offer promising alternatives. And a major alteration to Github will no doubt create an exodus of programmers into start-ups or competitors. For now, it is too early to tell conclusively how these two events will affect the crypto world, but given the data, it is a setback to investors’ confidence in the future of the industry.