Eco’s New Cryptocurrency Is Tackling Economic Inequality
Crypto for the People
Eco seeks to create the most usable digital currency platform to date, offering users an alternative to bitcoin, gold and fiat currency at Eco.com.
Last week, Garrett Camp (of Uber/Expa) publicly announced the pre-release of a new cryptocurrency called Eco. Like many cryptocurrencies, Eco is meant to be a viable medium-of-exchange, with low transaction rates and fast speeds, all packaged in a much simpler wallet interface.
However, unlike most digital currencies, Eco's protocol aims to solve the issues that continue to mount for large market cap currencies like Bitcoin and Ethereum by addressing these problems deep within its technical foundations.
Here are the facts: Whitepaper
Eco wants to be a better digital currency, devoid of issues in governance, scalability/efficacy, and usability currently associated with top cryptocurrencies Bitcoin and Ethereum.
Eco recognizes the negative impact of mining pools and crypto whales due to leverage by volume (individuals that own a large amount of any single currency). Single entities create a severe imbalance in markets. Eco proposes a mining program with verified pre-selected nodes allocated to academic institutions.
However, the emergence of large mining pools has led to uncertainty around long-term governance, and a small number of entities now control mining capacity.
Eco recognizes that Proof-of-Work requires inordinate amounts of energy.
Eco will start with larger blocksizes and shorter blocktimes than Bitcoin, enabled by a fast network of servers.
Eco proposes an improved speed (~1m) of a transaction and lower cost.
Targeting an initial confirmation time of less than 1 minute, Eco will enable fast transactions with low fees. Our goal is an initial transactional capacity of approximately 1000 transactions per second, facilitating a faster payment network for use-cases like remittance and wire transfers.
Eco will implement a mining system that equally distributes rewards between nodes and billions of users around the world.
Instead of rewarding anonymous miners, Eco will give the majority of its value created to billions of users around the world. This can help more than two billion people in developing nations gain improved access to financial services, and achieve a more balanced distribution of resources.
Eco will launch with user-friendly interfaces on web and mobile, and create a currency that is easy to quantify and use
New payment systems are needed that are not controlled by a central institution, and that provide better user experiences using mobile devices.
While Eco’s shining promise to solve the mounting problems in mining efficacy, governance (and power) distribution, and technical scalability is appealing to underserved economic minorities, its largest advantage is the growing demographic that is investing fiat into cryptocurrencies.
Let’s face it, devoid of reasonably simple services like Coinbase, Robinhood, and now (hopefully) Circle/Poloniex, the rest of the cryptocurrency space is poorly designed. And with something as risky as money, new services in the space need to build trust through design.
To build trust and quell mounting uncertainty, Eco is focusing on a design-first approach to creating a digital currency for everyone.
The Eco.com team is smart. Exploit the growing attention in the cryptocurrency space and ride the wave to build buzz around their new protocol. How? By employing philanthropy and altruism and packaging its token offering under a shiny app icon.
Their focus on human-usability alone could force the initial adoption of Eco - the incumbents are clunky, riddled with confusion, and require a great deal of faith in the system to simply transfer funds.
Altogether, their design improvements focus on the following:
- don’t call it a cryptocurrency, call it a digital currency
- pre-launch with a shiny website
- promise a mobile app at launch, don’t call it a wallet
- make mining program easy, leverage academic ties for initial validation
- employ 1 trillion token count to enable meaningful numbers, i.e. fiat-comparable quantities, 1.25-eco vs. 0.000000125-btc
- don’t call it a whitepaper, call it a design proposal
Altruistic Foundations as a Marketing Strategy
For the layperson, Eco's strategy is relatable and comforting. By employing the design and implementation tactics so well known of the Expa brand, the Eco brand begins with good faith.
1. Buy a domain name like Eco.com
2. Create a unified brand experience, demonstrate unity between mobile and web
3. Use Expa/leaders as a launch platform
Although it hasn't worked out quite so well for some of their portfolio, Eco will be different. It's not another app that their startup incubator is trying to push in front of people, it's the shiniest object in a room full of crypto fanatics.
To accomplish this goal, they will establish a centralized organization called the Eco Foundation which will be formed to manage the implementation and maintenance of Eco and its properties (i.e. protocol, web, mobile, etc.). Eco, the cryptocurrency (not $Eco), will be created through its work in establishing the global currency protocol.
While Garrett and Co. will be investing an initial $10,000,000.00 into the project, true value will be derived from markets and speculation, not unlike all other currencies in circulation.
The continued altruistic merits of the project manifest itself in what seems like a manifesto to do what most ICOs aren't:
1. No pre-mine by unknown entities, instead through verified academic nodes
2. Equal distribution of block rewards amongst miners/nodes
3. Equitable allocation of the tokens over time to verified humans and "selected" institutions
There are Red Flags
As with all new digital currencies, there will be obsessive trolling and shilling, followed by reasonable arguments against its success.
With Eco, there will be no exception. The largest counterargument to the successful implementation of Eco is that it necessitates a socialist construct. While most mineable currencies reward the fastest (and most powerful) mining operations, Eco nodes mine and share block rewards with the entire Eco community of miners and users.
These nodes are venerated institutions, hand selected by the Eco Foundation for their merit and impact on the world. They’ve cited in their design proposal that the immediate selections will consist of prestigious universities around the world. They hope to evoke the same spirit of openness and decentralization as the origin story of the Internet.
Herein lies the second problem. The very idea that Eco can control and orchestrate the second coming of a technology like the Internet is the most centralized element of this entire proposal.
Now, forget the fact that you diminish the economic incentive of mining and that the Eco Foundation is centralized. Their trust algorithm, most similar to practical byzantine fault tolerance, leaves questions to be answered. Why?
PBFT is most famously implemented by Ripple, mainly to effectively control speed and cost of transaction across select banking organizations. This structure suits their product well - to the ire of much of the purist decentralized/cryptocurrency demographic.
But Eco isn’t Ripple. Eco is aims to be a vastly distributed currency amongst all participants of their global blockchain. Unlike most cryptocurrencies that seek to be a medium-of-exchange, Eco has not opted to build on proof-of-work or proof-of-stake. PBFT may not make sense to scale their distributed platform.
This needs some work.
People are Capitalistic Creatures
I’m optimistic about a future where Eco could work and I’m grateful that a project like this is getting the attention it deserves.
However, my optimism doesn’t come without doubt. While we could spend weeks debating the efficacy of Eco’s trust algorithm or argue about the meaning of a truly decentralized cryptocurrency, I believe the real problem lives deep within our social strictures, which highlight a constant struggle to achieve and succeed at the expense of others.
Speaking solely about what we’ve grown to understand as the ‘American Economy,’ people are driven by greed and corporations are driven by the bottom line. So even if this new decentralized system works in favor of the masses, our society is not decentralized. Rip out the central bank - run into savage competition.
Speaking on behalf of history, our economic system is set up to favor the wealth. If you think distributing money is the solution to the world’s poverty, think again. Owning (value-producing) resources is the ticket to wealth, and the poor don’t possess or have access these resources. Redistribution of wealth would be a temporary bandaid fix to the inequality in the world.
I’m excited for Eco. Whether or not it succeeds as the ambitious project it is, it will set a foundation for future projects like it.
I admire their goals to bring a digital currency to the masses and empower people to reclaim their own wealth. Not only do the espouse these beliefs in the way their organization is set up, but they also employ their technologies to follow the same ideologies.
I’m encouraged at the future of a truly functional medium-of-exchange that people can trust and that can shift the power back to the masses.