EOS is a decentralized cryptocurrency and blockchain-based protocol. It is designed to serve as a simple way for developers to create decentralized applications (dApps). One advantage to dApps is that they do not require the use of extensive amounts of code. EOS, in essence, acts as its own decentralized operating system with built in crypto-economic incentives.
Users do not need to spend tokens in order to access network resources and build dApps. Instead, they simply need to be token holders.
What does EOS stand for? While nobody knows for sure, many suspect that it is an acronym for Ethereum Operating System.
EOS.IO was founded by developer, Block.One. They released their white paper in 2017. Block.One did not launch EOS mainnet. Instead, they relied on the EOS community to launch as an open-source software. At launch, one billion tokens were administered to ensure widespread distribution.
Their ICO raised over four billion USD, with an included one billion USD of direct support from Block.One. This broke the record for the largest amount of cash raised during an initial coin offering.
Serial entrepreneur, Daniel Larimer, is the current Chief Technology Officer of EOS. Larimer is also the original founder of the cryptocurrency platform, Bitshares, and co-founder of the decentralized social network, Steemit.
EOS.IO was designed using a decentralized autonomous corporation model that uses a Delegated Proof-of-Stake algorithm. This allocates resources to coin owners and gives them the power to cast votes on the EOS.IO operating system.
EOS is used to host applications built for the network, similar the social network Steemit. There is also a smart contract platform supported by the network.
EOS.IO is powered by the native cryptocurrency EOS, which is used to show stake in the network. It also gives users the ability to exchange RAM and other resources in order use ESO.IO’s hosting services.
EOS.IO uses what is called a Delegated Proof-of-Stake (DPOS). This system is different than Bitcoin’s Proof-of-Work (POW) algorithm. Bitcoin miners compete to be the first to solve a difficult hashing problem, which takes a large amount of processing power. Rewards go to the first person to have a block validated by the system.
In EOS’s delegated Proof-of-Stake, a group of 21 producers are chosen based on how much cryptocurrency they hold. EOS must ensure that block and transaction times are kept low. Thus, producers who do not participate are punished and removed from future consideration as producers.
Transactions can be validated by anyone on the system who has stake in the form of EOS. When a validator thinks they have a block that can be added to the chain, they place a bet on it. If it is added, they are rewarded proportionately to the amount of their bet.
This consensus algorithm avoids some of the pitfalls of POW, such as low transaction volume (3-4 transactions per second in the case of Bitcoin). EOS.IO claims that with their DPOS algorithm, it is possible to produce millions of transactions per second. This a necessary condition for building the type of decentralized application environment that EOS.IO wants to be.
The EOS token can be purchased on most of the major cryptocurrency exchanges such as Binance, Bitfinex, and Changelly. On some exchanges, it can only be purchased using other cryptocurrencies, like Bitcoin or Ethereum. Changelly gives users the ability to buy EOS coin using fiat currency, but the fees tend to be much higher.
EOS.IO released 1 billion ERC-20 tokens as part of their Initial Coin Offering (ICO) to raise capital. As of June 2, 2018, all these ERC-20 tokens became frozen and non transferrable. In order to receive an equal value of EOS currency, token holders had to register for the third-party blockchain Mainnet. Essentially, anyone who did not register lost their investment, unless there are future plans to transfer the ERC-20 tokens to Mainnet. Currently, there is no way to register for Mainnet without an EOS.IO account which was created during the ERC-20 token distribution.
There have been a few criticisms of the EOS.IO software and the architecture of their consensus system.
One issue has been bug-fixing. EOS.IO seems to be employing a last-ditch effort strategy to combat holes in their security. Their recently employed Bug Bounty program is a great example.
Another issue is their reliance on voting to enact changes to their constitution or to resolve inconsistencies with forking. Low participation and apathy regarding decision making could potentially lead to Block.one having disproportionate control over decisions.
Relying on a large groups to make changes could also lead to slow adoption. This could also result in the rejection of improvements to the environment. This issue has been well described here https://vitalik.ca/general/2018/03/28/plutocracy.html.
Since the Mainnet blockchain has come online, all ERC-20 tokens offered during the ICO have been frozen. It remains to be seen what kind of activity will take place among investors in the EOS space.
Any number of chains using the EOS.IO software could pop up in the future to support wide ranging functionalities. However, the details of these services remains unknown.
The price of EOS has been rising, and they are clearly trying to be a competitor to Ethereum. The potential for scalable, no-fee transactions is certain to benefit the cryptocurrency community as a whole. By the time EOS-based services are launched, it is possible that these innovations could be released by another blockchain platform. EOS has the potential to be an important advancement to this ever changing space.
|Genesis Date||July 01, 2017 (8 months)|
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