Tokyo FinTech
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Tokyo FinTech

Charles Hoskinson on Dan Larimer and EOS

Charles Hoskinson, CEO of Input Output HK and creator of the Cardano blockchain protocol, had a passionate response when asked about his Twitter fights with Dan Larimer during a recent Tokyo FinTech Meetup. This is only a short excerpt of almost two hours of opening comments and Q&A, which you can find in full length on our YouTube channel.

Q: So I always see you fighting with the CEO of Block.one on Twitter, so…

CH: I do not fight with him, I just talk $hit.

Q: …I just wanted to know what your problem is with the EOS project?

CH: My problems stem mostly from the existential issues. It is not okay to say you have no fiduciary or moral obligations to anybody, but then take 4 billion dollars from them. It was not okay to say they put the money they raised back into the crowd sale. They do not have any transparency, it is not okay not to disclose all the investors and the people who are behind the project or the obligations these people have with the money that they raised. It is not okay for 90% of the supply to be controlled by 1% of the actors — and the way the system works, 51% can permanently control the system —and then resell those to exchanges and other actors.

It is not okay to say you have 500,000 transactions per second performance when independent tests that Consensys conducted show about 250 transactions per second. It is not okay to say the system is done and secure, and then for people to lose money and for systems to fall apart.

It is perfectly okay to experiment and take risks and do crazy things. Tezos is a system were this happens. And they are doing good work. There are good people there.

It is not okay to say you can do X, but you really cannot do X, and there is no independent evidence of that. And you just say “I don’t need evidence. I mean, science, f@ck your scientists, it will just slow us down.” It’s not okay to do that.

It also it contaminates our entire space. Because what it does is it says “This is decentralization.” 21 mills and a PSP protocol, it is not decentralization, it is not. And this is why China likes it, why they are so highly rated. “Oh, yeah, we like the system, it is very easy for us to get an understanding of it, to run it, and to deploy it.” So this is my problem.

And it was not so much of an issue until they raised 4 billion dollars, because it is not my issue, it is the Securities Exchange Commission’s issue. They solicited US investment. I was in New York City at Consensus in 2017. They had two floors of that conference, they had their logo on Time Square’s video screen. Just say that they did not do a road show and solicit US investment is insane. And the Securities Exchange Commission will inevitably get involved and they are not going to differentiate “So EOS is the bad actor, and Cardano is the good actor.” They are going to make a general purpose claim as they are doing with Kik, and it makes my job harder and everyone else’s job is harder.

And then add to that on top — when Dan Larimer lied and said that we plagiarize his work, his $hit work, without any evidence at all, that was wrong. You know, I will tell you about Boulder. We had a professor kill a student. He hit him with his car, he got suspended. We had another professor who plagiarized, he got fired. So in the academic world when you say an academic is plagiarizing, it is serious, it is a bad deal. We never did. There was no evidence of it. He lied and never retracted the lie. And his community carried it on for months and months and months and months and months. We wrote not only one but two rebuttals.

All our work has been peer reviewed. We sent it to EuroCrypt and CCSN and Crypto, major conferences where only 10% of the papers submitted or accepted among academics from Stanford and MIT and the University of Tokyo and other major institutions. Zero of their work has been submitted to outside criticism, yet they assert “Well, we are just geniuses, we know everything and anybody who has invented anything copied our work.” All he did was take a 1980s protocol, put a voting system on it and built a Rube Goldberg machine to raise a lot of money during the bubble. Great for him!

And then to assert moral superiority over the entire ecosystem, everybody, and force all of us now to live with their malfeasance is immoral and wrong. I do not have any issues with Brandon or any of these other people and I actually kind of like Brock, I see him every now and then. Not a bad guy. What I have issues with is whining about our project, raising 4 billion dollars, saying they have no fiduciary obligation to people they raised the money from.

I run a for-profit business. I have an obligation to deliver Cardano. I have a contract for that. I have spent years of my life following that contract, writing papers, writing code, delivering things. I have a help desk. Your have a problem, you submit a bug report to me, I have responsibilities and obligations. Okay? He says he does not have any, he can just spend it on a yacht. Can we allow as an ecosystem this type of behavior? Are we any better than the bankers who collapsed the economy 2008 and gave themselves hundred million dollar bonuses for the privilege of doing that if we allow this to happen, because he was smart enough to raise the money at that particular period of time. It’s wrong. It’s morally wrong.

Next question!

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Norbert Gehrke

Norbert Gehrke

Passionate about strategy & innovation across Asia. At home in Japan. Connector of people & ideas.