ECAF Orders EOS Block Producers to Freeze 27 Accounts

“The authorities in EOS just instructed the block producers to censor transactions from 27 accounts with no reasons given.” – @ferdousbhai on twitter

On the 22nd of June, the EOS Core Arbitration Forum, ‘An Arbitration Forum for and by the EOS Community’ ordered EOS block producers to refuse transactions from specific addresses “indefinitely”. ECAF’s order further went on to state “The logic and reasoning for this Order will be posted at a later date”, followed by a handwritten, dated signature.

Following the first order, on the 24th, an additional order was released that retroactively revokes all tokens in 5 accounts from the time of the original order.

After the initial order, one of the EOS Block Producers made a steemit post, in which, as part of an update, the reasoning behind the order was disclosed. Apparently, each account had currency stolen from it.

What happened to trustless systems?

One of the core ideas behind (most) cryptocurrencies is that the system is trustless. Meaning that no matter what, no trust is required to use the cryptocurrency. With EOS, it would seem that you are required to trust that ECAF will not decide to freeze or revoke your assets, with or without reason, much in the same way that you trust a bank with your fiat currency.

What happens if you speak out against ECAF? What is in place to prevent someone in power from freezing or outright revoking your assets? Said hypothetical person of power would not even have to come up with a convincing reason for the action. To quote the above orders: “The logic and reasoning for this Order will be posted at a later date”.

According to a post on ECAF’s forums, when freezing assets, those responsible are required to open a case against themselves regarding the decision, and if found to be in error, are liable for the results of the freeze. The liability is reactionary, there does not seem to be anything directly preventing someone from freezing or revoking assets.

Even if ECAF does what it believes is right, why do they get to decide? What gives them the right? Why are they better at deciding than anyone else? Why should anyone trust them? How is it any different from a government, or the leadership of a company? How can those that DO trust them be sure that there are no ulterior motives in play?

The only way to be sure is for the system to be trustless.

What happened to decentralized systems?

Another core idea behind cryptocurrencies is that they are decentralized. There is no central target to attack. No single group of people that can make changes to the blockchain. With EOS, there are ‘Block Producers’ who are responsible for adding blocks to the blockchain. Block Producers follow orders from ECAF. This communication line is a single point of failure (or a large attack surface, depending on your view).

What happened to immutable systems?

Immutability, meaning the inability to change, is a word often used to describe blockchains. The idea is that once something is on the blockchain (a transaction, for instance), it cannot be changed or undone. For PoW coins like bitcoin, this works by means of cryptographic hashes, a block contains its parent’s hash. Therefore, in order to change something behind a block, you must change every block after it. The immutability of a blockchain is one of its strengths. For transactions, immutability means that you cannot undo a transaction, or change how much currency was sent within it. Thus removing the need for trust between parties.

EOS has shown its ability (and intent) to rewrite history ‘when necessary’, which ruins immutability and tears apart the trustless nature of its blockchain. How can you trust what you see on the blockchain if you know that what you see can be changed at will?

In the case that prompted this article, the reasons for the change are to prevent losses accounts that may have been compromised. A familiar tale for anyone who knows about the origins of Ethereum Classic.

Hypothetically, assuming that an account is compromised, and is used to transfer currency in the form of payment for services to another account, what happens to the service provider? Do they get the short end of the stick and lose what they earned? Or does the service provider get to keep what they earned, while the compromised account is also re-credited with currency? The former seems unfair, and the latter seems insane. If you can simply create currency out of thin air, what is to stop someone in power from making themselves rich?

The only solution here, while maintaining a trustless system, is for the blockchain to be immutable.

What is left for EOS?

From my perspective, the only thing left with EOS is the tech behind it and the hope that there are no malicious actors within its ranks. I feel that EOS has walked away from what cryptocurrencies are, and towards what they were created to fight against.

Trustless. Decentralized. Immutable.

Armin Davis

Armin is a cryptocurrency mining and computer security enthusiast. Writing is fun too.

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