EOS is a blockchain project that is intended to become an “Ethereum killer” in the race for dapp adoption. The blockchain has been described as an operating system that allows for vertical and horizontal scaling of dapps. The EOS blockchain uses a DPoS consensus mechanism that allows token holders to cast votes to elect block producers that become arbitrators of the network.
EOS had undergone a year long ICO that raised over $4 billion by the end of the token offering. The project has created partnerships with some high profile companies. However, the project has also been riddled with accusations of collusion and centralization.
In this article, we will take a look at the potential for EOS to increase by 265% before the end of 2019. We will take a look at some of the positive drivers that may help this occur but some of the potential negative drivers that may hold EOS back in 2019.
For EOS to increase by 265% from today’s price, it will need to reach the $15 mark before the end of 2019, as shown in the chart below;
Positive Drivers for EOS Price
Partnerships
One of the recent major partnerships announced by EOS is with the mobile forum app, Tapatalk. The application boasts over 300 million users, which can further extend the potential reach of EOS. The partnership will give birth to the Gold Point Reward System that will be powered by the EOS blockchain.
The 2 projects have partnered together to make the Gold Point Reward System more transparent by running on the EOS blockchain. Users can use the reward system to pay for digital goods, remove advertisements and make donations to admins. Users can also use the Gold Point wallet, built on top of EOS, to conduct micro-transactions within the application.
Another recent partnership recently is with the interoperability-focused blockchain, WanChain. WanChain focuses on enabling blockchains to communicate and interact with each other. The WanChain integration is set to take place at some point during Q2 2019 which will make the EOS blockchain interoperable with other blockchains such as Ethereum.
Weiss Rating
The Weiss Crypto Ratings Agency provides weekly and monthly evaluations on the biggest projects in the cryptocurrency industry. In their latest rating release, the company gave EOS a Technology/Adoption rating of Grade “A”, alongside both Ripple and Bitcoin. EOS was ranked in 2nd position, behind Ripple but ahead of Bitcoin.
The agency stated that EOS deserves a Grade A due to it becoming the “backbone of the new internet.”
Upcoming Big Announcement
EOS founder Dan Larimer has shared that a big announcement is on the way, one that he described as the biggest since the birth of EOS. Not much information has been provided about what may be coming, but the announcement is expected in June.
Potential Negative Drivers
Collusion
The governance of EOS revolves around 21 nodes that check and validate transactions on the EOS blockchain. The entities that run these nodes are known as Block Producers, and are voted in by EOS token holders.
However, there have been reports that the Block Producers may have been colluding with one another to secure votes in becoming Block Producers. If this is the case, this is a major flaw within the EOS governance model which could lead to the Block Producers continuing to collude to stay in power.
Fear Of Centralization
Along with collusion, the EOS blockchain has been accused of being heavily centralized. Block Producers have the power to arbitrate transactions on the EOS blockchain, including freezing accounts and reversing transactions.
This was made apparent not too long after the EOS blockchain was launched when 7 EOS accounts were frozen by Block Producers in June 2018. Furthermore, in November 2018, a Block Producer had reversed another transaction, without the permission of the account owner, on the grounds of a phishing scam.
Another incident which helped to shed some further light on the drawbacks regarding EOS’s centralization had occurred towards the end of 2018 when a hacker managed to steal over 2 million EOS.
The hacker’s account was quickly frozen — however, for the account to remain frozen, all of the Block Producers have to keep an updated list of blacklisted accounts. One newly appointed Block Producer had failed to keep the list updated which temporarily caused the blacklisted account to be unfrozen, allowing him to transfer the stolen funds.
Blockchain Bloat
Adding further to the fear of centralization, the EOS blockchain has now reached over 4TB and is continuously rising.
As the blockchain continues to increase in size, it becomes more expensive for the node operators to host the entire blockchain. As fewer node operators run full nodes, this increases the risk of centralization which is a big “no” for cryptocurrency evangelists.
EOS Long-Term Price Analysis
Let us take a look at the EOS/USD market and highlight some key areas of resistance on the way up to $15.
Taking a look at the EOS/USD chart above, we can see that in March 2019, EOS has been able to break above and remain above the 100-day moving average, a positive sign for EOS traders.
If EOS can climb higher, the market will meet initial resistance at the 2019 high around $4.48. Above this, further resistance lies at $6.00 which is the October 2018 high.
Further resistance above $6.00 can then be expected at the bearish .382 and .5 Fibonacci Retracement levels (drawn in red), priced at $6.93 and $8.58 respectively. This bearish Fibonacci Retracement level is measured from the June 2018 high to the December 2018 low.
More resistance above $8.58 can be expected at the $10.00 handle.
If the buyers continue to climb further above $10.00, they will meet more resistance at the bearish .786 Fibonacci Retracement level at $12.56 before being clear to complete the 265% price increase and make an attempt at $15.00.
Conclusion
EOS certainly does have the potential to increase by 265% before the end of 2019. This will largely be based on the continued success from EOS partnerships, along with the upcoming “big announcement” expected at some point in June 2019.
However, the fear of centralization will persist until Block.one makes some updates to their constitution. This could potentially hold back the growth of EOS on the run up to $15.00.
