I have been following the developments around EOS lately and believe it may be a game changer.
However, reading sections of the technical paper and the EOS Token Purchase Agreement, I am quite confused and would be happy to be enlightened by more informed and tech-savvy Steemit members regarding the reference to below.
Technical White Paper excerpt mentions about Token Value and function here..
"Separating Transaction costs from Token Value
One of the major benefits of the EOS.IO software is that the amount of bandwidth available to an application is entirely independent of any token price. If an application owner holds a relevant number of tokens, then the application can run indefinitely within a fixed state and bandwidth usage. Developers and users are unaffected from any price volatility in the token market and therefore not reliant on a price feed. The EOS.IO software enables block producers to naturally increase bandwidth, computation, and storage available per token independent of the token's value.
The EOS.IO software awards block producers tokens every time they produce the block. The value of the tokens will impact the amount of bandwidth, storage, and computation a producer can afford to purchase; this model naturally leverages rising token values to increase network performance."
However, Token Purchase Agreement says...
"1.4. EOS Tokens. No Purpose. As mentioned above, the EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied. Although EOS Tokens may be tradable, they are not an investment, currency, security, commodity, a swap on a currency, security or commodity or any other kind of financial instrument. Company’s Use of Proceeds. Buyer acknowledges and understands that the proceeds from the sale of the EOS Tokens will be utilized by Company in its sole discretion."
"7.1. No Rights, Functionality or Features. EOS Tokens have no rights, uses, purpose, attributes, functionalities or features, express or implied. EOS Tokens do not entitle holders to participate on the EOS Platform, even if the EOS Platform is launched and the EOS.IO Software’s development is finished and the EOS.IO Software is adopted and implemented. 7.2. EOS Platform. Buyer should not purchase EOS Tokens in reliance on the EOS Platform because EOS Tokens are NOT usable on the EOS Platform and do not entitle Buyer to anything with respect to the EOS Platform."
It is fair to say that in general cryptocurrencies do not have value as it is not backed by any entity such as a sovereign body. It appears to have value because people believe it has.
Where I am getting lost is the mention about the EOS token not having any "purpose, attributes, functionalities or features" in the token purchase agreement as mentioned above. Is the functionality not to provide the holders, the protocol's bandwidth, storage, and computation"?
Both of these appear contradicting each other or is it purely because the purchase agreement is for legal purposes only while in practice there is indeed functionality and utility?
It would be important for everyone who is jumping into the bandwagon to understand this better in my view.
EOS ICO launched on Ethereum. EOS will not operate on Ethereum, EOS will have its own blockchain.
What they will do is take the EOS ICO tokens for those public keys that correctly registered on the Ethereum blockchain, and convert those registered public keys into the Genesis block for the EOS blockchain.
At which point all Ethereum EOS tokens are useless.
Also, this is USA legal lingo to cover your butt. "If and when someone launches a blockchain using EOS.IO software." They are disclaiming liability in case the project fails, this prevents lawsuits.
If I guarantee users to provide a product and never provide it they can sue. If I guarantee them nothing at all, then it doesn't give them much grounds to sue on. Most everything in the US works on that ideology.
Thanks for the detailed explanation. I am getting it somewhat now. Therefore, we can conclude that the real utility would kick in once those registered public keys are converted into the Genesis block on EOS blockchain. Is that a fair assumption?
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