Joseph Lubin: EOS Controlled By 21 Crypto Bros Is Not That Decentralized

Ethereum co-founder and ConsenSys founder, Joseph Lubin, has an opinion on the several decentralized platforms appearing in the market, including those of EOS, Cosmos, and Dfinity.

Lubin made a speech at Deconomy, an event that has gathered a crowd from all over the world and focusing on the innovations in the crypto space and the imminent decentralized future.

A large focus of the talk was on the idea of trust in economies and value systems, and how the disintermediation properties of blockchain technology can greatly increase efficiency and break down barriers between isolated systems.

Reliance on centralized trust enables certain kind of intermediaries to extract too much value from a transaction… the trust revolution will transform everything. The trust characteristic of blockchain derive from their degree of decentralization. Certain blockchain networks can’t be improperly manipulated, can’t be cheated even if up to half the nodes are malicious…

He goes on to say that these separate systems are “walled gardens”,

There doesn’t actually exist a global, coherent financial system. It is a network of walled gardens. Brokerages that serve their jurisdictions, central depositories for each nation, and banks that handle their business nationally and reach out through their correspondent banking relationships when they need to cross out to another walled garden to complete a transaction.

Furthermore, Lubin believes that they are not in favor of the consumer and instead more focused on gaining market power,

Settlements of sorts happen on all kinds of platforms beyond the financial industry. Ebay, PayPal, MasterCard, Amazon, can be considered settlement platforms for certain kinds of transactions…None of these focus primarily on the benefits to the consumer and many of these play disturbing games with their customers to reap maximum value out of us. Each of these prioritize protecting their pricing power, limiting freedom, choice…Legacy economy is all about creating the deepest, widest moats to protect competitive businesses.

Explaining this particular theme, Lubin made remarks on several projects that are working on overcoming these issues, both permissioned and permissionless ones, and that they are the ideal solutions to the challenge. He doesn’t see as much utility in permissioned networks,

Perhaps IBM’s Fabric? Nope, there is no chance in my opinion that will be evolving beyond relatively small networks for private and permissioned systems. Fabric can issue tokens, but only for narrowly circumscribed situations. The Fabric technology promotes platform locking. R3’s Corda is blockchain inspired software for mostly banking industry applications. It is more about point to point trust, than a shared source of truth. Corda can issue tokens, but only for narrowly circumscribed situations and Corda as a technology promotes platform locking.

EOS has been the subject of scrutiny after it was alleged last year that Huobi stakeholders in its decentralized system (which Vitalik Buterin has criticized and which Lubin also called non-decentralized in his speech) were being paid for voting influence. Lubin says,

How about EOS? As has been debated endlessly, a platform controlled by 21 crypto bros is just not all that decentralized. They can collude and censor if they wish. Governments and other well resourced actor can bribe them or force them to act against their will and against the well being and the security of the people using the platform…I can imagine EOS being used for some games, but not even games that have high value tokens. It is too easy to organize to steal value on this platform.

His opinion on Cosmos and Dfinity is a little more praiseworthy, though he does not believe that they are tackling the problem of trust by creating a base layer of trust, instead serving as a good layer 2 solution or decentralized cloud service system.

I expect Cosmos to have good utility as a Layer 2 solution, linked into the base trust layer when necessary. Cosmos also expects to interop with ethereum through a token bridge…[Dfinity] appears to me they are less interested in being a global base trust and settlement layer and more like a somewhat decentralized AWS replacement.

And of course, he ends by saying that there is only one apparently viable solution,

So in my admittedly somewhat biased opinion, there is only one currently viable option for the trust layer, the global settlement layer for the planet…Ethereum.