Instead of Bitcoin [BTC] death spiral, “we should be talking about EOS,” says Investment Analyst

Corey Miller, a member of the investment team at BlockTower in his recent tweets revealed his views on how the EOS ecosystem might be operating at a loss wherein the block producers [BPs] look forward to turning off operations. There were six tweets in total, justifying the standpoint. The genesis tweet read:

“1/ Instead of discussing a BTC mining death spiral, perhaps we should be talking about EOS Block Producers turning off their operations. Although the narrative is that EOS BPs are financially well-off, many are currently underwater…”

He subsequently posted a survey that was filled out by block producers of EOS, mentioning the break-even cost at $4 per token. However, Miller pointed out that this figure of the break-even cost looks frail as the cryptocurrency is currently trading at a depreciated price of $1.8.

In the next tweet, the blockchain space enthusiast wrote that if the EOS ecosystem does not have a difficulty adjustment mechanism, the block producers will have the obligation to operate at lower costs or shut down at once. In his words:

“3/ Given there is no difficulty adjustment mechanism in EOS, BPs are going to be forced to either downsize their operations/cut costs or, in some cases, completely shut down.”

Here, Miller admitted that the latter is a greater possibility at this point. In his opinion, approximately 10% of the 81 BPs who receive the rewards are currently inactive. Furthermore, in an efficient market, people would stop voting for these block producers but that does not seem to be the case, claimed Miller.

As a solution to this situation, the investment expert gave a quick opinion stating that the problem can only be solved if the price of EOS jumps up again or the BP reward is increased.

On these tweets, a Twitter handle called EOS New York commented:

“How are you determining that around 10% are shut off?”

Corey Miller reverted by explaining:

“I admit that it’s not really possible to tell, but I’m assuming that at least some of the BPs who’s endpoints are down are shutting down.”