EOS, what is It and What Does it Mean for Bitcoin & Ethereum
EOS is a blockchain platform used for developing decentralized applications, more commonly known as “dapps.” It functions in the same way as the Ethereum and helps make the development of dapps easier as it provides services similar to what a computer’s operating system does. Furthermore, it also provides features and functionalities that are beneficial for dapps.
The concept behind the EOS is to provide all the promises and best features that numerous smart contract technologies do. Examples are the computing support of Ethereum and the security features of Bitcoin. In EOS, all these features have been brought together in one easy-to-use and massively scalable dapp platform which the everyday user can use, empowering the impending economy of the blockchain technology.
How EOS Works?
The goal of EOS is to come up with a dapp platform for blockchain that can smoothly and securely scale thousands of transactions every second while also providing accessible experience to the developers, users, and entrepreneurs. Their main priority is to offer a complete operating system suitable for decentralized applications that are focused on the web by providing certain services like cloud storage, user authentication, and even server hosting.
The network of the EOS is a readymade platform ideal for app developers to be able to tap into an authentication system that’s fully featured. User accounts, with the varying permission levels, as well as their own user data that are locally secured, are the main features of the network. The newest updates of the EOS have allowed access to the shared database in between accounts as well as the ability to keep user data into a local machine within the blockchain.
Recovery of stolen accounts is built into the system as well, which comes with different methods of proving the user’s identity as well as restoring access to an account that has been compromised.
Keep It in the Cloud
Cloud storage and server hosting are both parts of the EOS system, which means that app developers can create and deploy applications, web interfaces, hosting, cloud storage, as well as download bandwidth that the EOS system provides. This allows developers to finally make their ideas come to life without requiring enough bandwidth and secure storage.
Developers of the app will be able to access usage analytics for bandwidth and storage directly from the EOS system, and they also have the option to set limits on certain applications. They can set it to whatever level they want.
Some of the most popular cryptocurrencies such as Ethereum and Bitcoin apply the concept “consensus overstate,” which means that at any point, all the computers that are within the network would be able to verify the current state of the entire blockchain network to prevent fraud and verify transactions. The blockchain in these cases is usually a graph of the current state of the system and if each new block is added to the blockchain, the nodes within the network will take each transaction from the block and will start to update the state of each address linked to those transactions.
When it comes to using consensus during events, the main focus will be on the transactions or the messages instead of the state. The state is no longer verified at any time. Instead, the nodes work by verifying the series of events that have taken place so far in order keep track of the state of the network. This will result in a system that will take longer to reconfirm the history of transactions completely but could handle a higher throughput of transactions when running.
This means that the EOS network is capable of scaling up to one million transactions or messages per every second from the gate using a single machine where infinite scaling is possible between various machines.
Free to Use
Applications built within the EOS platform won’t require any micropayment from the end users to send messages or to do certain tasks within the blockchain. It will be up to the developers of the app to decide how they are going to charge the transaction fees, which are normally very cheap. This means that companies are free to create their own strategies for monetization and to decide whether to offer their services free of charge.
Features, Not Bugs
The EOS system features a governance model based on the block producers that are capable of voting which transactions are confirmed, whether the application is running correctly, and if there are changes on the source of the code of each individual application and on the system of the EOS itself. What this means is that it’s possible for the community to be able to actively upgrade, downgrade, or fix bugs within the system in a more secure and democratic way.
No Trouble Performing
EOS can help to reduce the latency, thereby, maximizing the performance. It works by structuring each block which is currently produced every 3 seconds and tested at 0.5 seconds to more finely cycles. The cycles are structured to “threads” that are running in parallel within the cycles. Doing so allows the transactions and messages to be sent and responded to in a single block and between the blocks, which brings down the limit of the response time.
The roadmap, Team, and Community
The developer of the EOS is Block One led by Dan Larimer, who was also a co-founder of Steemit and Bitshare, together with Brendan Bloomer. Both Larimer and Bloomer have some serious experience in the world of crypto and have been very active in promoting the technology, on top of their own projects.
The team behind the EOS system is inline with the recently proposed roadmap and continues to plug away in development at great speed. The EOS Dawn version 1.0 was released in September 2017. In December 2017, the Dawn 2.0 has started buying resource tracking and inter-blockchain communication. Dawn 3.0 is set to be released in Spring 2018, and this is said to be the system’s first official release date. We’re seeing bright things for the EOS system in the future, and we would highly suggest keeping an eye out on this system as it progresses.
The community that’s behind the EOS is global and vibrant, and there’s a lot of support from both contributors and investors. EOS communities can be found on Twitter, Facebook, and Steemit.
Potential Game Changer
Although the EOS system may have given a few sleepless nights to Ethereum and Bitcoin fans, it’s the type of decentralized app that perfectly emulates the Ethereum platform. For followers of the EOS, it’s mainly a question of whether the superior speed and scale as described on the whitepaper will be delivered.
Currently, Bitcoin is running at 7 transactions per second, while Ethereum is at 14 per second. These speeds don’t take into account the pending Lighting Network of Bitcoin or the Raiden Network of Ethereum. Although some of the “techno-sperts” have valid criticisms and compliments for both networks, there’s a little disagreement.
One of the best features of the EOS platform is its ability to process more than 100,000 transactions per second. That should be enough to convince even the most skeptical crypto investor, and this will no doubt bring a lot of attention to the whitepaper.
EOS vs. Ethereum
Below, we’re going to describe the differences in the technological limitations and capabilities of EOS and Ethereum, as well as the different philosophies of both platforms.
- Design Philosophy – One of the main differences between the Ethereum and EOS network is their design philosophy. Ethereum can be described as “application-agnostic,” which means that it’s specifically designed to become a neutral platform for all potential applications. In this way, as stated in the design rationale document, Ethereum doesn’t have any features and refuses to build even the most common high-level use cases as the intrinsic part of the protocol. This particular rationale minimizes bloat among the applications and also requires several different applications to reuse the code. The efficiency gains of app developers will be realized if some of the more common functionalities are provided in the platform.
- Consensus Mechanism and Governance – Other important differences between Ethereum and EOS are the blockchain’s consensus mechanism and the overall blockchain governance approach. Where Ethereum uses a Proof of Work, EOS uses the Graphene technology, a technology that takes advantage of the Delegated Proof of Stake (DPOS) consensus mechanism. This option plays an important part in the commercial scalability.
- Scalability – For a platform to be considered commercially viable, scalability is extremely necessary. This is one significant area where the Ethereum and EOS differ. As of the moment, the Ethereum network is limited to a single-threaded performance of a CPU. Early test networks have achieved up to 25 transactions per second that will most likely increase to 50 or 100 after the optimization. However, under load from the real applications, Ethereum’s current transaction limit is most likely 10 transactions per second or less.
- Denial-of-Service Attacks – About the scalability of the network, it’s also necessary to discuss the potential attack vectors of the network. For this, we’re going to discuss the potential for denial of these service-type attacks briefly. This kind of attack happens when a malicious attacker ends up spamming a network with traffic to prevent legitimate traffic from being able to penetrate. From what we understand, the Ethereum network has already been proven vulnerable to these types of attacks.
Just 10 Addresses Hold Almost 50% of All EOS Tokens
Following the consensus of the six independent snapshots that verify the state of the EOS ownership, it was revealed that there are only 10 addresses that hold 496,735,539 EOS tokens and that’s equivalent to 49.67% of all the 1 billion EOS tokens, and 100 million of this is being held by Block One. This is the company that was behind the EOS ICO and is also the same company that’s behind the first code version of the protocol. Aside from the $4 billion that they have raised, this gives them another $1.5 billion in EOS tokens.
The other 9 addresses are a bit difficult to discern, although we can say that the least amount that was held by one of them is around 20,675,047.08 while the other eight addresses hold about 380 million in total.
There’s one other address that holds 75 million EOS, and that translates to around $1 billion. After doing quick browsing, it’s showing them being linked to two other addresses.
This might be a cold wallet of an exchange, but if it indeed is, the setup may look a bit strange. It’s very unlikely a hot wallet, although it may also be the owner of a 20.6 million address.
Therefore, the top 10 maybe even less than the ten individuals or entities, although in this particular case, the two or three addresses may be an interaction of different exchanges. Our guess for the 7 out of the 10 top holders based on current ranking regarding trading volumes for EOS is Block.one, Binance, Bitfinex, Upbit, Huobi, OKEx, and Bithumb.
EOS is a truly exciting project in the field of dapp, and with a proven team working behind the system, as well as game-changing features and a great vision on the roadmap, this is definitely something that we are all looking forward to. Make sure you keep an eye out for the stable release that’s expected to happen sometime in Spring 2018. Stay up to date by following EOS’s social media accounts and by picking up some tokens through an exchange if you truly believe in the technology and its potential growth!