We live in an exciting time for blockchain enthusiasts. The world of distributed apps (dApps) is exploding. Ethereum brought 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 to handle any load. The platform aims to allow for thousands-times more 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 what is EOS?
EOS runs on a completely different set of principles than other blockchain projects as it makes use of 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 could 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 similar to the web-based applications, like providing secure access and authentication, permissions, data hosting, usage management, and communication between the 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 way similar 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 existed. The blockchain can now process and complete more than 50k needed to be completed confirmations per second. Accordingly, the coin will give business and startups to develop very advanced blockchain-backed apps. The services and features which are delivered by the EOS Blockchain, the current development in EOS and of Block.one – make EOS a strong competitor for any platform that supports dApps while cementing its place stronger.
What makes it very unique? EOS does not need any mining farm. This is all result of the new EOS token that is created whenever block producers generate a specific number of blocks, in which case the reward is the above mentioned new EOS tokens. The EOS blockchain allows the block producers to give the desired figure for their expected pay. Depending by the general median value of the desired pay given by the producers in general – the number of tokens will variate. On top of all, a mechanism has been installed by the backing up team 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 large variety of standard application types to be deployed with minimal effort. This would allow for the creator of an EOS dApp to only need to customize their program without reinventing 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. The Version 1.0 was released as open-source software in June, 2018. EOS was launched by block.one, a developer of blockchain technologies for businesses. The core team behind, including Brendon Blumer, the CEO, has been involved in blockchain since 2014. He has previously been involved in companies dealing with currency exchanges in MMORPGs and in the real estate. Dan Larimer, is the CTO. He is the creator of delegated proof-of-stake and decentralized autonomous organizations aka DAOs.
CTO Dan Larimer is credited with inventing delegated proof-of-stake and the concept of decentralized autonomous organizations, and 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 claimed to be 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 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 launching, and 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 (the “EOS Tokens”). Block.one is building the EOS.IO Software but it will not configure and/or launch any public blockchain platform adopting the open source EOS.IO Software (the “EOS Platform”).
As you understand, the EOS ecosystem consists of two key elements: the EOS.IO and the 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. The EOS token is the EOS cryptocurrency.
A developer simply needs to hold EOS coins, 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 pace for the creation of a smart contract. Instead of being charged a fee for using resources such as storage or bandwidth, a user is allocated all this based on the amount of coin they have.
EOS coin initial coin offering (ICO) started on the 26th June, 2017 and will end on the 3rd July, 2018. The total supply of these tokens is 1 billion EOS. It is a novel approach with a one year long ICO period. As per EOSCollective.org, EOS 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 EOS token sale works like no other token sale so far. The token sale takes place over a full year, starting June 26, 2017, with 350 periods of distribution. At the end of each period, the total number of EOS tokens designated for that period will be distributed to contributors based on the amount of ETH they contributed divided by the total contribution.
EOSIO 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 EOSIO ideal for both enterprise and community-driven blockchains.
Depending upon your use case, EOSIO can be configured to use one of two different Web Assembly engines, Binaryen and WAVM. A single EOSIO blockchain can support up to 1,000 TPS and future versions of EOSIO will provide the tools necessary to simplify inter-blockchain communication, allowing your business to scale horizontally.
EOSIO is released under the open source MIT license and is offered “AS IS” without warranty of any kind, express or implied. Any security provided by the EOSIO 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 EOSIO 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 EOSIO, 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 been advised of the possibility of damage.
You can access an EOSIO blockchain with your EOSIO private key. Assuming that the blockchain is launched as described above, you will need to have access to an EOSIO account in order to access the EOSIO blockchain.
The EOSIO software is also available on GitHub. If you are a developer who is interested in getting started, you can always visit the EOSIO Developer Portal.
EOSIO was released on the 2nd June, 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 software 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 EOS 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 and 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 use it. This is especially true for DAPPs that are looking for mainstream acceptance.
- Free Usage
The platform should enable the 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 the developers the freedom to upgrade the dApp as and when they want. Also, if some bug does affect the DAPP, the developers should be able to fix the DAPP without affecting the platform.
A platform should allow their DAPPS to be processed parallel in order to distribute the workload and save up time.
- Keep It in the Cloud
Server hosting and cloud storage are part of the EOS system as well, meaning that application 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 and 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 systems That’s how EOS processes transactions more quickly than Ethereum. But EOS also uses this system to eliminate transaction fees – sort of. Instead of the typical per-transaction fee, users on the EOS network will be able to access network power proportionate to the EOS tokens they hold. If, for example, a dApp holds 1% of all existing EOS 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 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 other blockchains with smart contract capability such as BitShares and Graphene currently. 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 binaries. It might make maintaining proprietary smart contract tech confidential difficult.
There is no cap on the amount of money being funded 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 EOS Tokens do not have any rights, uses, purpose, attributes , functionalities or features , express or implied, including , without limitation, any uses, purpose, attributes, functionalities or features on the EOS 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, 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 Co-ordination: There have been some concerns about EOS that has been raised by Ethereum co-founder Vitalik Buterin.|
EOS Blockchain is aiming to 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 the risk, but to accumulate as part of a diversified portfolio and just hold and watch the project grow. But along with all the hype and excitement about EOS, there’s also a large amount of skepticism coming from the crypto community.