We live in an exciting time for blockchain enthusiasts. The world of distributed apps (dApps) is exploding. Ethereum brought us the innovation of smart-contracts. However, it currently cannot provide them at scale. EOS is a blockchain solution aimed at solving that problem by providing a dApp-friendly blockchain platform that scales easily and smoothly, and can handle any load.
The platform aims to allow for a thousands-fold increase in transactions per second, enabling large-scale applications to be brought to the blockchain. EOS developers envision apps like Facebook, prediction markets, and exchanges being run on the EOS blockchain. So then, what exactly is EOS?
EOS runs on a completely different set of principles than other blockchain projects, using a system known as delegated Proof-of-Stake.
What is EOS Crypto?
“EOS” isn’t an acronym. It’s simply what the system is called. Some of the suggestions about what it might stand for are “EOS Operating System”, “Ethereum On Steroids”, “End of Silence”, “Endless Online Scaling”, etc.
The idea behind EOS is to bring together the best features and promises of the various smart contract technologies out there (e.g. security of Bitcoin, computing support of Ethereum) in one simple to use, massively scalable dApp platform for the everyday user to empower the impending blockchain economy.
EOS supports all of the required core functionality to allow businesses and individuals to create blockchain-based applications in a way that is similar to web-based applications, like providing secure access and authentication, permissions, data hosting, usage management, and communication between dApps and the Internet. It is also supported by a web-toolkit for interface development, making it a complete offering for hassle-free app development. It essentially works in a similar way to Google’s Play Store and Apple’s App Store.
The EOS blockchain network was launched in July 2017 with the idea of developing the fastest dApps platform ever. The blockchain can now process and complete more than 50k confirmations per second. Accordingly, the coin will give businesses and startups the ability to develop very advanced blockchain-backed apps. The services and features which are delivered by the Blockchain, the current development in EOS and of Block.one – make EOS a strong competitor for any platform that supports dApps while further cementing its place.
What makes it unique? EOS does not need any mining farm. This is the result of the new token that is created whenever block producers generate a specific number of blocks, in which case the reward is new tokens. The EOS blockchain allows the block producers to give the desired figure for their expected pay. Depending on the general median value of the desired pay given by the producers in general – the number of tokens will vary. On top of that, a back-up mechanism has been installed to check if the feature is being misused. Per annum, the level of token supply will not surpass 5 percent.
At its core, EOS is intended to be a highly scalable platform on which distributed applications can be run easily. While competitors like Ethereum can be thought of as a global computer, EOS is more like a global operating system.
While Ethereum-based applications need to be created from scratch each time, EOS claims that it will allow for a wide variety of standard application types to be deployed with minimal effort. This would allow a developer of a dApp to simply customize an existing program, instead of having to reinvent the wheel.
This software enables businesses to rapidly build and deploy high-performance and high-security blockchain-based applications. In order to ensure widespread distribution of the native token at the launch of the blockchain, one billion tokens are being distributed on the Ethereum blockchain by block.one. This will provide a distribution that anyone can use to launch the EOS blockchain once the software is released, while the CEO of block.one, Brendan Blumer, announced that Block.one will support the EOS.io blockchain with over one billion USD in funding from the token sale.
The EOS.io platform was developed by private company block.one, a Cayman Islands exempted company. Version 1.0 was released as open-source software in June, 2018. block.one is a developer of blockchain technologies for business. The core team, including CEO Brendon Blumer, has been involved in blockchain since 2014. He had previously been involved with companies dealing with currency exchanges in MMORPGs and in real estate.
Dan Larimer, is the CTO. He is the creator of delegated proof-of-stake and decentralized autonomous organizations, a.k.a. DAOs. He founded BitShares (a decentralized asset exchange) and Steemit (a blockchain-based social media platform). Larimer and the BitShare core development team also founded Cryptonomex, the company behind Graphene, an open-source blockchain deployment platform, purportedly capable of processing over 100,000 transactions per second with an average confirmation time of less than 1 second. Some might say, however, that Larimer is a controversial figure in the blockchain community (of the snake-oil salesman variety).
CEO Brendan Blumer is also the founder and CEO of ii5, whose debut product is 1group, a centralized property-listing platform for realtors in India. Before ii5, Blumer founded Okay.com (also a real estate platform, in Hong Kong), which merged with Asia Pacific Properties (APP) about a year after being launched. Before that was Accounts.net, an MMORPG trading platform (in the US). Blumer’s LinkedIn profile says he relocated to Hong Kong at the age of 18 when Brock Pierce (currently Chairman of the Bitcoin Foundation and Co-Founder and Managing Partner of Blockchain Capital; founder of IMI Exchange, ZAM, and IGE) acquired an operation he had started (at 15), selling virtual assets on a website he had developed. Brock Pierce is also block.one’s Chief Strategy Officer.
Another blockchain veteran involved in EOS is advisor Ian Grigg, a financial cryptographer who has been building cryptographic ledger platforms for over 20 years; inventor of the Ricardian Contract and co-inventor of Triple-Entry Accounting.
The EOS Token Sale
EOS tokens are ERC-20 compatible tokens distributed on the Ethereum blockchain pursuant to a related ERC-20 smart contract. Block.one is building the EOS.IO Software but it will not configure and/or launch any public blockchain platform adopting the open source Software (the “EOS Platform”).
The EOS ecosystem consists of two key elements: EOS.IO and EOS tokens. EOS.IO is akin to the operating system of a computer – it manages and controls the EOS blockchain network. EOS.IO uses blockchain architecture that is built to enable vertical and horizontal scaling of decentralized applications.
A developer simply needs to hold tokens, instead of spending them, to be eligible to use network resources and to build and run dApps. A token holder who is not running any apps can also allocate or rent his bandwidth to other participants who may need it.
The EOS coin serves as the ticket to making use of the EOS server capacity for the creation of a smart contract. Instead of being charged a fee, a user can have resources allocated to them, such as storage or bandwidth, based on the number of coins they have.
The ICO started on June 26, 2017 and ended on July 3, 2018. The total supply of these tokens is 1 billion. It is a novel approach with a one year long ICO period. As per EOSCollective.org, token distribution was carried out as follows with an aim to spread tokens far and wide throughout the whole ecosystem at realistic market prices without giving undue advantage to a select few during a short ICO period.
The token sale took place over a full year, starting June 26, 2017, with 350 periods of distribution. At the end of each period, the total number of tokens designated for that period was distributed to contributors based on the amount of ETH they contributed, divided by the total contribution.
EOS.IO allows developers to write business logic that is compatible with consensus algorithms that demand deterministic execution. Your user base can interface with this business logic using the secure public key infrastructure, bringing blockchain-level security, accountability, and auditability to your business. Business logic is easily updated according to the governance structures of your organization.
It is designed to operate in environments without any tokens where system administrators allocate potentially unlimited resource quotas to users. Alternatively, smart contracts can allocate resource quotas by other means, such as token staking, market fees, or voting. This makes EOS.IO ideal for both enterprise and community-driven blockchains.
Depending upon your use case, EOS.IO can be configured to use one of two different Web Assembly engines, Binaryen and WAVM. A single EOS.IO blockchain can support up to 1,000 TPS. Future versions of EOS.IO will provide the tools necessary to simplify inter-blockchain communication, allowing your business to scale horizontally.
EOS.IO was released under the open source MIT license and is offered “AS IS” without a warranty of any kind, expressed or implied. Any security provided by the software depends in part on how it is used, configured, and deployed. Without limiting the generality of the foregoing, Block.one makes no representation or guarantee that EOS.IO or any third-party libraries will perform as intended, or will be free of errors, bugs or faulty code. Both may fail in large or small ways that could completely or partially limit functionality or compromise computer systems. If you use or implement EOS.IO, you do so at your own risk. In no event will Block.one be liable to any party for any damages whatsoever, even if it had not been advised of the possibility of damage.
You can access an EOS.IO blockchain with your private key. Assuming that the blockchain is launched as described above, you will need to have access to an account in order to access the EOS.IO blockchain.
The software is also available on GitHub. If you are a developer who is interested in getting started, you can always visit the official Developer Portal.
EOS.IO was released on June 2, 2018 and it is designed to include::
- Free Rate Limited Transactions
- Low Latency Block confirmation (0.5 seconds)
- Low-overhead Byzantine Fault Tolerant Finality
- Optional high-overhead, low-latency BFT finality
- Smart contract platform powered by Web Assembly
- Designed for Sparse Header Light Client Validation
- Scheduled Recurring Transactions
- Time Delay Security
- Hierarchical Role-Based Permissions
- Support for Biometric Hardware Secured Keys (e.g. Apple Secure Enclave)
- Parallel Execution of Context Free Validation Logic
- Inter Blockchain Communication
The EOS Vision
EOS has big plans. It will be a platform that will act as a decentralized operating system. Developers can then build applications on the EOS software. It will be highly scalable, flexible, and usable.
The Block.One vision is to build a blockchain dApp platform that can securely and smoothly scale to thousands of transactions per second, all while providing an accessible experience to app developers, entrepreneurs and users. They aim to provide a complete operating system for decentralized applications focused on the web by providing services like user authentication, cloud storage, and server hosting.
What Does EOS Have on the Table?
- Support for Millions of Users
It should be scalable enough for millions of users to exploit it. This is especially true for dApps that are looking for mainstream acceptance.
- Free Usage
The platform should enable developers to create dApps which are free to use for their users. No user should have to pay the platform to gain the benefits of a dApp.
- Easily Upgradable
The platform should allow developers the freedom to upgrade the dApp whenever they want. Also, if some bug does affect the dApp, the developers should be able to fix the dApp without affecting the platform.
The platform should allow a dApp to be processed in parallel in order to distribute the workload and save time.
- Keep It in the Cloud
Server hosting and cloud storage are part of the EOS system as well, meaning that developers can build and deploy applications and web interfaces with hosting, cloud storage and download bandwidth provided by the EOS system. This opens developers up to bring their ideas into reality free from the demands of securing storage and bandwidth.
- Low Latency
A dApp should run as smoothly as possible with the lowest possible latency.
How Does EOS Work?
From a technical perspective, EOS is highly different from Ethereum because of its consensus model. Like Ethereum, EOS’s network software supports smart contracts, meaning that developers can create any sort of dApp they’d like and have it work on the EOS platform. While Ethereum runs on a proof-of-work (POW) model, EOS uses a delegated Proof-of-Stake (DPoS) consensus algorithm, and that, at least according to the EOS development team, makes all the difference.
Proof-of-stake systems forgo the number-crunching and achieve network consensus by having transactions validated by network stakeholders (i.e., token holders). Delegated proof of stake networks validates transactions by using a smaller, often random and frequently changing, number of delegate stakeholders. Because only a small number of stakeholders are needed to validate each block of transactions, transactions can be processed much more quickly and efficiently.
Proof-of-Stake validation is how EOS processes transactions more quickly than Ethereum. EOS also uses this system to eliminate transaction fees – sort of. Instead of the typical per-transaction fee, users on the network can access network power proportionate to the number of tokens they hold. If, for example, a dApp holds 1% of all existing tokens, it can use up to 1% of the EOS network’s total transactional power at any given time.
That ties into another unique feature of the EOS blockchain, which is that there is no EOS blockchain. At least, not in the way you’d expect. Rather than operating a blockchain, the developers behind EOS are simply building the software platform for a blockchain that will ultimately be launched, operated, and owned by the community. Ownership of EOS tokens will, in the long run, equate to ownership of a real stake in the network’s power.
The innovation EOS uses to process, what it claims will be millions of transactions per second, is Delegated Proof-of-Stake (DPoS). This is a newer method of consensus, and an alternative to Proof-of-Work. In DPoS there is no mining and there are no miners. Instead, in EOS’ version of DPoS, there are 21 delegates. These delegates are continuously updated as they are voted on by all EOS stakeholders. Blocks are produced in rounds of 21 where the 21 delegates voted on for that round will each produce a block in a random order every 3 seconds (~21 blocks per minute). If a delegate is behaving poorly, they’ll simply be voted out in the next round. On top of this, EOS will use parallelization to scale.
What does this mean? Ethereum can currently only run one operation at a time. This is because for Ethereum every single node must execute the same transactions. Utilizing parallelization, EOS can run multiple operations at the same time. So EOS is solving a scalability problem.
EOS Coin Problems
What EOS is offering is certainly compelling. While it may not necessarily replace Ethereum, it could prove to be a serious heavyweight contender. Perhaps much in the same way that Apple and Microsoft fight for the personal computer market today.
However, we do not know if the cryptocurrency community at large will adopt EOS for the deployment of decentralized apps. If EOS is really able to offer free transactions, then that could give it a highly significant advantage over Ethereum.
There are currently other blockchains with smart contract capability such as BitShares and Graphene. These have limited smart contract capabilities at this time, but they could adapt their systems to a similar model in the future.
Smart contracts will be readable code rather than binary. It might make maintaining proprietary smart contract tech confidentiality difficult.
There is no cap on the amount of money being raised in this ICO. Thus far, EOS has made huge claims with no actual substance as of yet. They have not fully explained how they plan on achieving the impressive list of features their platform will boast.
Advantages and Disadvantages
|Free: No transaction fees
|EOS seems shady, irresponsible, and extremely dangerous to the crypto ecosystem.|
|Parallel Processing: The ability to do things in parallel, faster transaction speeds and more scalability.||The Tokens do not have any rights, use, purpose, attributes , functionality or features , express or implied, including , without limitation, any use, purpose, attributes, functionality or features on the platform.|
|A Constitution: A set of rules on which everyone agrees upon, these are linked to every block mined.||EOS is still a raw project that has just been launched.|
|Self Sufficiency and Evolution: The current model allows for a 5% inflation rate, this will be used to develop the network further.||It is not possible to mine EOS cryptocurrency|
|Decentralized operating system: it means that developers can build applications on EOS.||Negative Coordination: There have been some concerns about EOS that has been raised by Ethereum co-founder Vitalik Buterin.|
The EOS Blockchain aims become a decentralized operating system which can support industrial-scale decentralized applications. EOS is a solid investment, not something to go all in on as there is always a risk, but to accumulate as part of a diversified portfolio and just hold and watch the project grow. Along with all the hype and excitement about EOS, there’s also a large amount of skepticism coming from the crypto community.