Inside the Chaotic Launch of a $4 Billion Crypto Project

EOS raised $4 billion from investors on the promise of a blockchain platform that could change the way the internet works. But infighting among its fragmented developers shows it still has a ways to go before it lives up to the hype.

More than 200 volunteer developers working to launch EOS spent a fraught three hours on a conference call Friday arguing about issues related to the platform’s launch. A transcript of the call was posted on the social-media site Reddit, and two participants confirmed its validity to The Wall Street Journal.

Block.one, the software company that developed the platform, couldn’t be reached for comment.

Since the Friday call, EOS’s tokens have fallen about 20%, cutting $4 billion off its market value, currently around $10 billion. The platform technically launched on Saturday after the volunteers smoothed over their differences during a second meeting Friday, broadcast publicly on YouTube. The platform isn’t yet available for public use.

Participants wrangled over issues big and small, from philosophical questions to technical arcana. At one point, some threatened to break off and launch competing versions of the software.

“We’ve spent too long catering to consensus. Those who are ready should go,” said Greg from a developer group called EOSsxsw, according to the call transcript. Participants generally were identified by first name and group affiliation, when possible.

The tense call in some ways wasn’t unusual: There have been far more caustic fights among bitcoin’s proponents over the years. But EOS’s messy launch shows just how difficult it is to build a platform for millions of users when you take its development out of the hands of a guiding leader.

EOS is a network that allows developers to build and host applications. It is similar to Google’s Android, but because it is based on the concepts behind blockchain, a software protocol designed to run on a network of linked computers, there is no central authority.

EOS isn’t alone in this quest. Messaging app Telegram, another ICO project called Tezos, and even the second-largest cryptocurrency project, Ethereum, are all striving to build what’s been called a “world computer.”

Investors pumped some $4 billion into EOS in a sale of digital tokens that ended earlier this month. In a promotional video for its initial coin offering,

Dan Larimer,

Block.one’s chief technology officer, called EOS a “blockchain technology that can support real-world use cases serving millions of users.”

Much of the trouble stems from Block.one’s hands-off approach to development of the platform. While the company designed and released the software, it has said that it will not control it. Instead, development has been left to dozens of individuals and communities that operate in groups.

The biggest disagreement Friday involved the platform’s need for RAM, or random access memory. The way EOS works, all the resources a developer needs to run it are purchased with EOS tokens, including the RAM needed to boot up the program. The platform’s first user, who would be randomly chosen from among the group, would need to make an in-network purchase of RAM before the network was operational.

Some participants suggested taking advantage of a small window dubbed “god mode” to create new tokens that could be used to “gift” the RAM to the first user. Others worried that creating these new tokens—an estimated 19,000, worth about $260,000—would look like these insiders were essentially printing money for themselves.

“What damages public perception more,” asked one participant, Aaron, “a ~0.002% increase in initial supply vs an indeterminate delay in the launch of EOS?”

Without resolving that debate, the group moved on to voting over whether or not to launch the software at all. At times, participants were confused about what topic they were voting on, and where. Some users were voting within a module inside Zoom, the videoconferencing service hosting the call, while others were casting votes on messaging site Telegram.

“For crying out loud we wasted more time talking about how to vote than voting,” said a participant named David, according to the call transcript.

At the second meeting on Friday, the group spent about an hour debating before voting unanimously to launch the network, agreeing to issue the extra tokens needed for the initial user’s RAM.

Write to Paul Vigna at [email protected]

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