- EOS is currently the 5th largest cryptocurrency in market cap
- EOS rivals other smart contracts platforms like Ethereum
- EOS protocol aims to provide a “performance-based and self-governing” blockchain
EOS is a powerful blockchain infrastructure that supports decentralized application (dApps) and functions in a fashion akin to Ethereum (ETH). With the quick integration of blockchain technology in the development of decentralized applications, EOS has massively grown from an experimental ICO to a valuable coin in the cryptocurrency market.
According to its whitepaper, EOS blockchain was developed to provide a “performance-based and self-governing” blockchain offering an operating system to support commercial-scale- dApps. EOS enables developers to build commercial applications similar to web-based applications. Financial applications built on the EOS blockchain infrastructure will accumulate zero transaction fees along with the capability of completing a large number of transactions per second.
History of EOS Blockchain
EOS was developed by private company “Block. One” based in the Cayman Islands and launched on June 1, 2018. To finance the project along with ensuring the widespread adoption of the platform’s cryptocurrency, an Initial Coin Offering (ICO) amounting to one billion ERC-20 tokens were distributed by Block.one. The ICO sale raised close to over four billion USD to support the platform’s development, and became, at the time, the most successful ICO ever.
The Team Behind EOS Blockchain
A private company, Block.one, based in the Cayman Islands is the core team behind EOS blockchain. The company’s CEO, Brendon Blumer is credited with the creation of the EOS blockchain and has been involved in developing virtual currencies since 2014.
Dan Larimer is the company’s CTO with vast experience in innovative technologies ranging from virtual reality simulators to second generation cryptocurrencies such as Steem and BitShares. He is also the man behind proof-of-stake and decentralized autonomous organizations (DAOs).
Since its launch in 2017, EOS blockchain platform has been released in various versions with continuous improvements in every form. The first version was the Dawn 1.0 version which was released on September 3, 2017. Dawn 2.0 was the second version and was released on December 4, 2017. Dawn 3.0 was released on January 25, 2018, and Dawn 4.0 on May 7, 2018.
Technology Behind EOS Blockchain
The primary objective of the EOS blockchain is to provide a platform for hosting decentralized application, smart contract integration and to offer a storage solution for decentralized applications, thus solving the scalability issues of other blockchains like Ethereum and Bitcoin.
While Ethereum provides a platform for the development of decentralized applications with exceptional smart contract capabilities, the slow transaction speed coupled with high transaction fees is a huge setback in using the platform for dApp creation.
EOS aims to offer free transaction in all dApps built on its platform. This is achieved via its multi-threaded feature along with the implementation of the delegated proof-of-stake for its consensus protocol. EOS blockchain looks at being the first decentralized operating system that will host and provide a platform for the development of a decentralized application with the already developed applications including Steemit, a social media platform that pays its users in digital currency and BitShares, the first decentralized cryptocurrency exchange (DEX).
EOS software architecture is based on consensus over events rather than the more popular consensus over state thus facilitating a faster transaction speed – from 3 transactions per second on Bitcoin to 3 million transactions per second.
The software matches some attributes of a real computer such as hardware including GPU, CPU, RAM and a hard disk for processing and storage. The language used to develop the EOS blockchain platform is a portable stack machine language known as WebAssembly which includes Rust, C, and C++ languages.
Regarding consensus, the EOS blockchain employs Delegated Proof of Stake (DPOS) with a two-tier governance structure. In the first tier, block producers are selected in 21 rounds with each block producer being allocated one block per round as a reward for the validation of incoming messages and production of the block messages.
The producer community continuously elects each round of producers through the use of proof of stake (PoS). The block producers generate and validate blocks within a 500 ms block time. When a block producer releases a block, it is first verified by the immediate producer followed by the next one and so on using the long chain mechanics. If a block is not validated, then it cannot progress by the addition of other blocks to form a blockchain. A block checkpoint is established when a block that is accepted by a minimum number of producers as immutable is reached.
EOS is a utility token employed to provide both bandwidth and storage on the blockchain ecosystem which is powered by its cryptocurrency. A producer owing 1% of the EOS tokens is offered 1% of the total available bandwidth on the EOS blockchain platform. EOS utility token also provides its owners with the power to vote and participate in the on-chain governance on the blockchain depending on the stake owned by an individual.
The EOS blockchain platform allows its users to create accounts which are named using a unique name with a maximum of 12 characters selected by the account owner. The creator of an account is required to set aside a certain amount of RAM necessary for storage to harbor the new account until the account matures to store the stakes tokens in its RAM.
Trading in RAM
The EOS blockchain’s design allows its users to trade in RAM by implementing a free-market approach in which scarce resources are allocated to an individual who needs them. In such an approach, the eos.io system enables users to purchase RAM from the system with an option of selling it back to the system in exchange for EOS cryptocurrency. The RAM trade functions allow liquidity in the RAM market hence facilitates price discovery. The Bancor Relay algorithm has been employed in the RAM market to facilitate an efficient trading system based on a fixed market rate.
EOS Storage Solution
The team behind EOS blockchain has proposed the creation of a storage system that provides its users with the capacity to permanently store and host files online and with the ability to access them vis a simple web browser. The storage cost will be free along with an utterly refundable deposit. To store information on this system, users will require EOS utility tokens to obtain storage space and bandwidth with the option of selling back the storage space and bandwidth when they no longer need it. The storage system will be built on the Interplanetary File System (IPFS) with EOS.IO software.
The Bottom Line: Future of EOS Blockchain
EOS blockchain undoubtedly has a bright future manifested by the growing value of the EOS token which is currently the 5th most valuable cryptocurrency with an exchange rate of $2.44 per EOS token and a market cap of $2,221,712,114. EOS is fiercely competing with its rival Ethereum in providing a suitable platform for the development of dApps. Ethereum must up their game to avoid being pushed out of the market by the steadily growing EOS which offers much greater functionality.