The world is rapidly moving towards digitization, with the internet becoming an integral part of our daily lives. The demand for reliable and secure digital infrastructure is higher than ever before, and the need for decentralized systems is paramount. Traditional centralized systems, especially those of the banking industry, have collapsed time and again, leading to economic disasters. Therefore, the need for decentralized blockchain networks, such as EOS, is becoming more apparent as the world continues to move towards digitization.
In 2008, the world experienced the biggest financial crisis since the Great Depression. The financial meltdown was caused by the collapse of several banks that were deemed "too big to fail." These banks had invested heavily in subprime mortgages, which were high-risk loans given to people who were unlikely to repay them. The banks bundled these mortgages into securities and sold them to investors, who thought they were investing in a low-risk product. When the housing market collapsed, the banks were left with massive losses, and the entire financial system was on the brink of collapse.
Fast forward to the present day, and we see a similar trend happening in the world of cryptocurrencies. Centralized crypto companies such as FTX, Three Arrow Capital, and Celsius, to name a few, have been experiencing failures one after the other, proving once again that decentralization is a better infrastructural approach on which to build the ever-growing world of digital operations upon.
More recently, we saw the collapse of Silvergate and Silicon Valley Bank, which catered to many tech and crypto-centric companies. A few days after Silvergate had announced that it was shutting down its crypto payments network, the announcement led to the crash of the cryptocurrency market last week.
This situation was further aggravated by the depegging of several stablecoins from the U.S. dollar. The biggest of these stablecoins, USDC, relies on centralized crypto companies, which are always prone to failures, in order to remain operational. Yet another situation where having a reliable and secure decentralized network is of utmost importance.
EOS, as a decentralized blockchain network, has maintained 100% uptime and is one of the few networks to be able to achieve this feat. It has also adopted additional processes that further decentralize and autonomize its network. For instance, the recently introduced MSIG enables the network issuance that flows into the ‘eosio.saving’ account to be programmatically distributed to other accounts and for them to receive ongoing funding directly from the EOS network.
In addition, EOS has added an extra layer of security with its Recover+ project, which provides insurance support to entities and/or applications that opt into it, and these are all required to complete security audits from reputable firms. So while everything collapses around it, EOS continues to strengthen as a decentralized global Web3 network capable of hosting different kinds of applications and businesses.
The importance of a secure, scalable, and reliable decentralized network going into the future cannot be overstated. The world is moving towards digitization, and centralized systems are increasingly proving their unreliability. Decentralized systems such as the EOS blockchain could provide the solution to the many downfalls of centralized systems. Decentralized systems are inherently more secure because they do not have a single point of failure. Instead, the network is distributed among many nodes, making it extremely difficult for a hacker or bad actor to compromise the entire system.
Furthermore, decentralized networks are scalable. As the network grows, new nodes can be added to increase its capacity. These decentralized networks can also become interoperable with each other for horizontal scaling. In contrast, centralized systems are limited in their scalability because they require massive infrastructure investments to increase their capacity. Whereas decentralized networks also provide reliability since they are not dependent on a single entity to maintain the network. In a decentralized network, every node is responsible for maintaining the network, making it much more resilient.
The failure of centralized systems is not unique to the banking industry. Many other centralized systems have failed in the past, leading to economic disasters. One such example of the failure of centralized systems is the Equifax data breach of 2017. Equifax is one of the largest credit reporting agencies in the world. However, the company failed to secure its systems adequately, leading to a massive data breach that affected millions of people.
The Equifax breach exposed sensitive personal information, including Social Security numbers, birthdates, and addresses, among other things. Roughly 147.9 million Americans along with 15.2 million British citizens and about 19,000 Canadian citizens had their private records compromised. Making this incident one of the largest cybercrimes in history related to identity theft. This event highlighted the need for more secure systems to protect sensitive information, especially now as the world is going more and more digital.
Another example of the failure of centralized systems is the Cambridge Analytica scandal in 2018. The company, which specialized in data analysis and consulting for political campaigns, was found to have harvested millions of Facebook users' personal data without their consent. The data was then used to create targeted political ads, potentially influencing the outcome of the 2016 US presidential election and the Brexit referendum in the UK.
The Cambridge Analytica scandal highlighted, yet again, the need for more secure systems to protect users' personal information. Centralized systems that collect and store large amounts of personal data are particularly vulnerable to breaches, as demonstrated by this event. Decentralized blockchain networks such as EOS, with their distributed architecture and built-in security features, could provide a solution to this problem.
The Cambridge Analytica scandal was a turning point for many people who began to question the centralized nature of social media platforms like Facebook and Twitter. The scandal, which involved the harvesting of personal data of millions of Facebook users without their consent, raised concerns about data privacy and the power that centralized platforms have over their users.
In response to this, Block.one, the company behind the EOS blockchain’s initial codebase, decided to build a decentralized social media platform called Voice. The goal was to provide users with a platform that put their privacy and control over their data first, without the need for a centralized intermediary.
Voice was launched in 2020 and aimed to differentiate itself from other social media platforms by utilizing the EOS blockchain to provide transparency and security. It was designed to be a platform where users could engage with each other without the fear of being tracked or having their data sold to third-party advertisers. To build Voice, Block.one reportedly invested around $150 million in cash and 10 million EOS tokens, which was one of the largest investments ever made into a decentralized application. However, despite the initial hype, Voice failed to gain traction and attract a significant user base.
One of the main reasons for this failure was the fact that Block.one, the private company behind Voice, prioritized its own interests and those of its investors above the needs of the platform and its users. Also, most people didn’t trust that the centralized private company would uphold their data and privacy rights, especially if and when pressured by government agencies.
In addition, the platform required users to go through a strict verification process, which made it difficult for many people to join and limited its user base. In response to the failure of Voice, Block.one has pivoted to building yet another centralized cryptocurrency exchange called Bullish.
Decentralized blockchain networks such as EOS could provide the solution to these
problems. By being distributed and not having a single point of failure, they can provide more security and transparency. Additionally, the use of smart contracts can automate processes and provide increased efficiency, reducing the potential for fraudulent activities.
As the world moves towards digitization, the need for secure and reliable decentralized systems is becoming more apparent. The failure of centralized systems in various industries, including banking, energy, and data security, highlights the need for more robust and transparent systems. Decentralized blockchain networks such as EOS offer a solution to these problems by providing security, scalability, and reliability. As technology continues to evolve, it is crucial to adopt new and more secure systems to prevent future disasters.
Can EOS manage to showcase itself as a piece to solving the world's puzzling reliance on failing centralized systems? In order to do so it will need to not only prove itself in the blockchain industry, but it would also need to get recognized by leading entities outside of the industry as a leading infrastructure solution for the future. Maybe EOS starts onboarding the smaller Web2 applications and businesses or perhaps it goes directly to onboarding the bigger world organizations, only time will tell.
Luckily the tide has been turning for a while now, and many of these traditional businesses are looking into blockchain technology to secure their future and to stay competitive. Each year more and more businesses in the traditional world are attending blockchain and cryptocurrency events to learn more about this promising technology. Perhaps there lies the biggest opportunities for EOS to rise above the tide and stand out as the lifebuoy these businesses desperately need.
The cryptocurrency market is at a point where it could turn bullish at any point now and investors are placing strategi...
The EOS Network Foundation (ENF) has just announced a ‘community feedback initiative’ for EOS community members to voic...