That’s how it feels, doesn’t it? It felt like cryptos had found its bottom and slowly started to rise again, while at the same time we were secretly discovering the booming gambling market inside EOS! Well, WRONG! Go back to the cotton fields peasants! Also check out my artwork in the header. It’s worth propbably around 5000 EOS. I take bids if you want ownership of it. It’s made by the pretty famous Eosmastéring.

So what’s going on? Why are cryptos tanking, and why are the EOS dapps tanking?

 

The Drama

To keep it simple, Bitcoin Cash is forking in about 5 hours and Craig Wright is threatening to kill Bitcoin with a fatal bug he claims to have found. Also, Bitcoin and Bitcoin cash and all other POW (proof of work) projects for that matter are or could be completely centralised. With Chinese mining pools controlling something like 70% of Bitcoin and 6-7 mining pools controls Bitcoin completely, people that has malicious incentives beyond economic ones could potentially start to mine empty blocks, double spend etc even without 51% hashing power. This on top of the huge electrical issue with Bitcoin, things are not looking to good it seems. There seems to be two big wars happening at the same time with a civil war in Bitcoin Cash at the same time fighting with Bitcoin Core.

 

Bitcoin Vs EOS

Now, EOS was and is probably still accused of being centralised. Most of the accusations were of course based on a lack of knowledge about how DPOS works. 4 mining pools make up 50% of Bitcoin mining pool and 3 pools make up 50% of Ethereum, whereas the 21 Block Producers that are significantly more than the number 4 and 3 as well has been accused of being centralised. I find that weird, because censorship resilience and decentralisation increases with the number of mining pools.

Still, that is not good enough for many. They continue with “but why would people care and take the time to look into each BP and vote for the right people?” It’s of course a valid question, but one mistake less intelligent people do is to assume that others has not thought about this. And of course this was solved pretty quickly with the use of trusted proxys. And we also see the ability of people to mobilise and vote once the situation calls for it, like we saw with the recent CPU issue. DPOS (delegated proof of stake) is also a much fairer system because anyone can vote in and out of a pool of BP’s. Many seem to misunderstand and believe that there are only 21 BP’s. Yes, there are 21 BP’s that produce blocks, but if they get voted out because they don’t do anything, or they don’t upgrade their hardware etc, other BP’s outside the top 21 will be voted in. So number 22 will hop in for number 21 and so on. And we’ve seen examples of the community voting out BP’s that did not spend some of the money they made on upgrading their Hardware, and when people raise concern they get their act together or they are voted out. So far this system of transparency and fairness seems to work much better than the chaos that rides the Bitcoin “community” if there is such a thing anymore. 3-4 BP’s with government subsidised electricity and a lot of capital in China controlling the network..hmmm..not exactly my idea of decentralisation.

 

Bottom Line

So all this drama of course spreads to the entire crypto space. Everything is still “pegged” to Bitcoin and wherever Bitcoin goes, so goes everyone else. For now at least. Even the “bull market within a bear market” that we have been talking so much about lately with the gambling dapps seems to fall over one by one. Hacks, attacks and exit scams. And I think I’ve noticed a pattern..people rush to the next Betdice clone and immediately start to mine, then they wait for some of the megawhales to come and join, and then they nag about “when dividends” on Telegram in hope of getting some mad ROI. This has worked for me a couple of times, especially with EOSjacks. I was early and spent about 10 EOS mining it before Liketerryfox came which resulted in some crazy dividend payouts. I think I got 10 EOS the first payout, then 8, 7 but now it looks to be more like 0,3. Why? Because the whales stopped mining and left the project for dead. I feel that that is whats going on with all of these now ( I guess EOSmax is the current hype. I expect the same to happen here) It does however seem like the non-whales continue to gamble a little bit as it is the volume that has fallen greatly and not mainly the userbase. But I’m not sure how they measure users on Dappradar but I suspect the numbers are daily visitors and not betters. And the daily users could also mean mostly people checking their dividends or rather..lack of.

And the bottom line is really this, that you should be prepared, I’m not saying it WILL happen, for a prolonged bear marked and another 50% drop from these levels is not impossible. If we were to replicate 2014 we will continue down another 50% from here. And with this mess I think we might. The big whales are in control, no matter if it’s in the Bitcoin mining pools or on EOS gambling dapps. And it will continue to be volatile, and a lot of people will lose money, win money or even if they stay passive continuously see their crypto lose value. But then come 2019-2020 or even later, and it could all jump up 100x again. Who knows. One positive thing for sure is that the list over cryptos will not look the same after this. Shitty projects will be completely wiped out, and those who remain will have proven themselves to withstand the turbulence. So expect CMC to look very different in 6 months or a year. I think, at least.

If you liked this you can also check out some of my other articles!

Why is it Taking so Long!? A little Story About the Internet, Computer Games and Blockchain.

Technically We are Out Of The Bear Market – But Here Is Why That Does not Matter

Dramatic Day In The EOS sphere – Here Are My Favorite Gambling Sites

Review of The Different Gambling Platforms On EOS

How to Trybe: The Basics

How I think Blockchain will evolve 

Not a member of TRYBE yet? Join now! referral link

EOSmastering on Steemit

Donations accepted! (eos account) eosmaster1ng (Only if you can spare it. Not asking small timers to donate, but everything is appreciated greatly as It’s hard to find the time to write) 

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Responses

  1. Ian Jeffreys @DNAian

    I hope this crash will “weed out” those crap coins and make people think about whether proof of work is really the best way to keep a cryptocurrency decentralized and secure. When people do the do their research they will see the merits of a DPOS to secure the cryptocurrencies. The hope is that EOS will get decoupled from bitcoin’s value and rise to the top. 1-2 years is reasonable, but if it happens faster all the better. Great post!

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    1. EOSmastering Post author

      Thanks for the comment @dnaian ! I think that weeding out is the one positive thing we will get out of this. There are some rumors going that all erc20 tokens will be wiped out completely…some are all ready in legal issues and forced to pay out some money to investors. I’m going to look more into that soon..but I “KNEW” this was going to happen so sold many of my shitcoin erc20 projects long ago, even if they had gone down 70% all ready..better to just take the loss and put it in something worth while like EOS. And it has turned out to be a good decision so far.

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  2. Workin2005

    I agree…many altcoins won’t survive another 50% drop. That’s not necessarily a bad thing long term. We need to weed out shit coins, weak hands and pave the way for institutional money. Protect your fiat. If you’re positioned right, when the bulls start running, it could be life changing.

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    1. EOSmastering Post author

      It could..Yeah, I’m working on my fiat, or what I call buy a new dishwasher or service for my car money – holdings. Sometimes you are reminded that that is still the money most people accept – only. But I agree..there is life changing money here somwhere..it can happen literally any time. I bet some people got massively rich during the very short gambling bull run in EOS. We’ll see what happens..I doubt there will be much more to profit there for a while. Might be a few pennies in dividends..but I don’t have huge hopes or expectations. Depends a lot on texas holdem IMO. As well as recruiting more people from both current EOS holders as well as people that are new to the whole scene.

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