Common Misconceptions

FUD FAQ

This page aims to provide some clarity around some common misconceptions that have cropped up about Ergo.

Emission

  • Myth: Ergo developers can manipulate the emission.
    Fact: The emission process is controlled by a transparent smart contract, visible in the source code. Any changes require miner consensus and are public on-chain. See EIP-27 and the foundational paper 'Soft Power: Upgrading Chain Macroeconomic Policy Through Soft Forks'.
  • Myth: All Erg was pre-mined.
    Fact: Coins were produced at genesis and systematically awarded to miners. The emission contract is public and does not allow arbitrary extraction by developers.
  • Myth: There are out-of-thin-air emissions in the "coinbase" transaction.
    Fact: Ergo prohibits out-of-thin-air emission in the coinbase transaction. Every coin is traceable and originates from a legitimate source.
  • Myth: EFYT was an ICO.
    Fact: EFYT was an airdrop to foster community, not a traditional ICO. It constitutes less than 1% of supply.
  • Myth: Ergo won't be able to support miners after emissions ends.
    Fact: After emissions, miners are incentivized by transaction fees, MEV, storage rent, and potentially custom emission contracts (FIMO). Off-chain bots and new DeFi tools also provide rewards.

Mining

  • Myth: ASICs will take over Ergo.
    Fact: The algorithm is designed to neutralize ASIC advantage. No known serious ASIC efforts exist. The community can hardfork if needed.
  • Myth: FPGAs are already taking over Ergo.
    Fact: FPGAs are not competitive due to chip shortages and ROI. SRAM is not feasible long-term due to memory requirements.
  • Myth: Ergo is at risk of a 51% attack.
    Fact: Real-world risk is low. Decentralized mining pool projects like Lithos further reduce risk. See miningpoolstats and Lithos project for more info.
  • Myth: Ergo ignored miners who warned about the difficulty algorithm.
    Fact: Miners' concerns were considered. The EIP process now encourages greater miner participation and transparency.
  • Myth: Ergo's difficulty adjustment algorithm is being manipulated.
    Fact: The algorithm maintains the intended block time. Fluctuations are monitored and the community can propose changes if needed.

Organisational

  • Myth: Ergo's marketing sucks.
    Fact: Ergo prioritizes organic, community-driven growth and education over conventional marketing. The Sigmanauts programme empowers the community to lead initiatives.
  • Myth: Ergo won't succeed without VC investment.
    Fact: Ergo thrives without VC funding, avoiding centralization and conflicts of interest. Progress is driven by the community and robust technology.
  • Myth: The Foundation is centralized.
    Fact: The Foundation's role is transitional. As the network matures, the community takes over. See the Transparency Report for more info.
  • Myth: Ergo could not operate without its foundation.
    Fact: Ergo is open-source and permissionless. The ecosystem is becoming more decentralized and would persist without the Foundation.
  • Myth: Ergo is a 'Russian coin'.
    Fact: Ergo is a global project with contributors worldwide. Its decentralized nature prevents influence from any single country.
  • Myth: Ergo is an unregistered security.
    Fact: Based on the Howey Test, Ergo is not considered a security. The initial allocation was for ecosystem development, not investment.
  • Myth: The Foundation's actions are causing price depreciation.
    Fact: Foundation expenses are a tiny fraction of trading volume. Most payments are in ERG and recipients manage them independently.

Ecosystem

  • Myth: Ergo's TVL ratio is too low.
    Fact: TVL is growing as infrastructure matures. The Rosen Bridge and new dApps are increasing liquidity and utility.
  • Myth: The ecosystem isn't growing.
    Fact: The number of dApps and developers is increasing. Track growth on DefiLlama and Artemus.
  • Myth: This new stablecoin will kill SigmaUSD.
    Fact: Multiple stablecoins can coexist. Competition drives innovation and benefits users.

Technical

  • Myth: eUTXO is too difficult for developers.
    Fact: eUTXO offers flexibility and security. Resources and tutorials are making it more accessible.
  • Myth: Ergo should've used an easier language than Scala.
    Fact: Scala is concise, efficient, and cross-platform. Off-chain code can be written in many languages. SDKs are available for JVM, Rust, JS/TS.
  • Myth: Ergo's lack of in-built sharding means it won't scale with atomic composability.
    Fact: Ergo uses other strategies for scalability and atomic composability, including eUTXO, Layer 2, and ACE concepts.
  • Myth: Proof of Work is not sustainable.
    Fact: PoW's energy use is proportional to value and security. More efficient mining solutions are emerging.
  • Myth: Proof of Work may face increased regulatory scrutiny.
    Fact: Legal challenges are complex. Fair-launch PoW chains are best positioned to weather regulation.
  • Myth: Ergo is a privacy coin.
    Fact: Privacy is optional and not unique to Ergo. Transparent and private transactions are both supported.
  • Myth: Ergo transactions are too slow.
    Fact: 2-minute block interval is strategic for security and smart contracts. Weak blocks and scaling methods improve throughput.
  • Myth: Ergo's development is too slow.
    Fact: The eUTXO model and fair start require careful implementation. The approach ensures long-term sustainability and fairness.
  • Myth: Ergo is at risk of quantum attacks.
    Fact: Quantum computers are not yet practical. Ergo monitors developments and will adapt as needed.
  • Myth: There is nothing unique in Ergo.
    Fact: ErgoScript, Sigma Protocols, NIPoPoWs, Storage Rent, and the eUTXO model make Ergo unique. See the Discover Ergo document for more.