Uber’s Co-Founder to Launch a New Permissioned Cryptocurrency

THE POINT IS -

  • Popular and successful entrepreneurs from the era of internet and mobile innovation are trying to jump on the crypto bandwagon.
  • The fact that Eco's goal of usability and micro-payment functionality are the same as thousands of other crypto projects proves that no one has created a really viable product yet.
  • Eco is a bet on the corporate, permissioned side of blockchain tech, but which denies the network effect required for real adoption.

Garrett Camp, co-founder of Uber, is to launch a new cryptocurrency, Eco, with a testnet expected in six months targeting usability and payment services.

“Eco will prioritize simplicity and ease-of-use in all design decisions, to help accelerate platform adoption and net-work effects,” the start-up says before further adding:

“Eco.com will enable users to create verified accounts, and profiles such as Eco.com/alice or Eco.com/bob will be formed to enable usage such as “send 3 eco to bob” via interfaces like texting or voice command.”

All of it appears to be at a very early stage with no whitepaper, but only a design proposal which describes a corporate coin of sorts:

“The Eco Foundation will verify the identity of the initial nodes to help bootstrap the network across a broad geographic distribution. The network will initially accept approximately a few hundred nodes, targeting universities across 50+ nations.

This group can then expand to more organizations based on transparent nomination and acceptance (for example by 80% of verified nodes) until most geographies have several operational nodes.”

As the validating nodes are sort of trusted, the incentives have been changed so that instead of winer takes all mining rewards, all nodes are given the same amount of eco tokens.

There would, therefore, be no race condition, with the validating nodes having the incentive to do the least work, rather than piling hardware.

How that would work exactly either in practice or conceptually is left in the air, because if such proof of work is so low we can see how one hacker of one node can bring the whole thing down.

Moreover, if they have no incentive, then why should they be running this at all? One reason might be that lazy nodes are kicked off the network, but we’re not concerned about lazy people when it comes to money.

“Eco will avoid mining by unknown parties, and have verified nodes distribute block rewards to other nodes and users. Instead of a node keeping all of the block reward, the majority will be immediately distributed to all other verified nodes and qualified users, to remove any financial incentive to game the system.”

It is quite curious Camp thinks universities should be running our money. The halls of knowledge arguably have too much power as it is, giving them the ability to set monetary policy would arguably give them absolute power.

Not least because we can’t see how this system would be forked like eth and eth classic or bitcoin and bitcoin cash. But it would be just one of many cryptos, so the free market in free lands will give people the choice to use them or use permissionless and open blockchains.

“Eco will ensure that the majority of the economic value generated by the platform is fairly distributed to the community through accounts created at Eco.com, to create a more balanced distribution of resources.”

It’s not very clear what this sentence means by “accounts created at Eco.com.” If it means what we think it means, as in you sign up through the website for, in effect, a bank account, then it’s difficult to see what’s the point of all the rest.

Arguably, the distributed blockchain would provide more security from admins manipulating data, but we don’t see how you can have smart contracts here, and without smart contracts you’d be missing on an incredible amount of innovation.

It’s a corporate coin. The AOL of blockchain or the Facebook of the internet. A centralized and inflationary money without the public accountability save for through the free market.

The design could change however. Instead of having online accounts, you could have SPV wallets that connect to the network, but then they wouldn’t have as much control.

The Proof of Work choice in this set-up does appear to betray some lack of familiarity with this broad space. Camp, afterall, only bought bitcoin in May 2017.

A proof of authority set-up with random node selection in each round would probably be safer because then a hacker of one node can do limited damage. While Proof of Stake would probably be even safer since this does have coins.

This unfamiliarity is further shown by a complete lack of innovation in this proposal. With the idea seemingly being this blockchain thing is cool, but let’s get back to online bank accounts.

And of course why universities or other institutions would want to be bound to eco.com with a governance model using “processes currently employed by large public organizations,” does remain a bit of a mystery.

If they wanted to create a university consortium coin of sorts, we can see many ways how they can keep it fairly open and decentralized to a decent extent while keeping nodes permissioned without needing in any way some online logging bank account.

But, with all that said, there is one innovation here.

Corporate coins.

They’re coming.


This article originally appeared on TrustNodes.

Ian Simpson