15 May EOS to empower the Blockchain Renaissance
EOS is a decentralized blockchain operating system that was designed to support industrial scale decentralized applications (dApps).
While there are many dApp platforms competing for their share of the market, EOS stands out as the technology that will likely play the biggest role in supporting the coming blockchain renaissance.
Why EOS and not Ethereum?
EOS has two key points of differentiation from other blockchain platforms that have brought the project a lot of attention:
- They plan to completely remove transaction fees.
- They claim to have the ability to conduct millions of transactions per second.
Ethereum has been by far one of the biggest breakthroughs in blockchain technology, kicking off a massive wave of innovation and new decentralized applications with the ERC-20 standard utility token protocol.
However, Ethereum is far from ready to scale to meet the needs to mass adoption and mainstream applications with many users. Two key reasons for this are the transaction fees on the Ethereum network (gas) and the low number of transactions per second.
EOS is better for developers
The main difference between how Ethereum and EOS operate is that while Ethereum rents out their computational power to the developers, EOS gives ownership of their resources.
So for example, if you own a 1% stake in EOS then you will have ownership of 1% of the total computational power and resources in EOS.
“EOS’s ownership model provides DAPP developers with predictable hosting costs, requiring them only to maintain a certain percentage or level of stake, and makes it possible to create freemium applications. Furthermore, since EOS token holders will be able to rent / delegate their their share of resources to other developers, the ownership model ties the value of EOS tokens to the supply and demand of bandwidth and storage.” -icoreviews
These fundamental differences between EOS and Ethereum that make EOS more well-suited for supporting the next wave of blockchain innovation and decentralized application, a.k.a. the blockchain renaissance.
Dan Larimer, “The Architect”
Dan Larimer is the CTO and creator of EOS. He is renowned for being one of the, if not, “the” top blockchain developer in the space.
Dan is a true pioneer as demonstrated by his creation of the delegated proof-of-stake (DPOS) algorithm and decentralized autonomous organizations (DAOs). He is the also the man behind BitShares and Steem, two of the most high-performing blockchains in the space.
One of the key reasons people have so much confidence in the EOS project is because of Dan’s solid track record and brilliance in architecting elaborate systems that work flawlessly.
Dan has walked away from two of the most successful blockchain projects in the world, created himself, to work on EOS which promises to be his masterpiece.
What does EOS bring to the table?
The biggest problem the blockchain space is facing is scalability.
Because EOS uses DPOS aka the distributed proof-of-stake consensus mechanism, they can easily compute millions of transactions per second. We will explore DPOS in a bit.
Ethereum’s blockchain came to a halt because of the DAO attack. Everything stopped and the community split with a hardfork.
Because EOS uses DPOS this sort of thing won’t happen. If a dApp runs into these sorts of problems, the block producers can freeze it until it’s resolved. This would be an extension of the DPOS system where not every node has to take care of chain maintenance.
EOS has great usability features for developers. It allows well-defined levels of permission with features like a web toolkit for interface development, self-describing interfaces, self-describing database schemas, and a declarative permission scheme.
In EOS, governance is maintained by establishing jurisdiction and choice of law along with other mutually accepted rules in a legally binding constitution.
Every EOS transaction includes the hash of the constitution in its signature. This binds the users to the constitution.
The constitution can be amended following a thorough process:
- The change is proposed by the block producer who obtains a 17/21 approval rate
- The 17/21 approval must be maintained for 30 straight days.
- All users are required to sign off their transaction using the hash of the new constitution.
- Block producers adopt changes to the source code to reflect the change in the constitution and propose it to the blockchain using the hash of a git commit.
- Block producers again need to maintain 17/21 approval for 30 consecutive days.
- After that, full nodes are given one whole week to adapt to the new changes.
- Any node that doesn’t follow the new protocol is automatically shut down.
The ability to make changes to the constitution is important because if something like the DAO attack happens and EOS needs a quick solution, the block producers have the power to speed up the amending process.
#5 Parallel Processing
Program instructions are divided among multiple processors. EOS provides parallel processing of smart contracts through horizontal scalability (adding more computers), asynchronous communication (all parties involved don’t need to be present to communicate), and interoperability (exchange and use information with other systems). This speeds things up substantially.
All blockchains built on EOS will generate a 5% natural inflation per year. This will be distributed to the platform’s block producers for confirming transactions on the platform.
This ensures that blockchains won’t rely on only one foundation, organization, or individual for its growth, development or maintenance.
A Decentralized Operating System using DPOS
This is the most important feature to understand what EOS is all about and what really sets it apart.
While Ethereum is a decentralized supercomputer, EOS positions itself as an operating system. This makes EOS a more focused product.
Delegated Proof Of Stake (DPOS)
EOS uses Delegated Proof of Stake (DPOS) for their consensus.
What is proof of stake?
Proof of stake makes the mining process virtual and replace miners with validators.
This is how the process works:
- The validators will have to lock up some of their coins as stake.
- They start validating the blocks. Meaning, when they discover a block which they think can be added to the chain, they will validate it.
- If the block gets appended, then the validators will get a reward.
What makes DPOS different from traditional POS?
Anyone who holds tokens on a blockchain integrated with EOS software can select block producers through a continuous approval voting system.
Anyone can participate in the election of block producers and they will be given an opportunity to produce blocks proportional to the total votes they receive relative to all other producers.
How it works:
- Blocks are produced in rounds of 21.
- At the start of every round 21 block producers are chosen. Top 20 are automatically chosen while the 21st one is chosen proportional to the number of their votes relative to the other producers.
- The producers are shuffled around using a random number derived from the block time. This ensures that a balanced connection to other producers is maintained.
- To ensure that regular block production is maintained and that block time is kept to 3 seconds, producers are punished for not participating by being removed from consideration.
- Producers need to produce at least one block every 24 hours to be in consideration.
The DPOS system doesn’t have forks because instead of competing to find blocks, the producers co-operate.
In the event of a fork, the consensus switches automatically to the longest chain.
Confirming Transactions in DPOS
A DPOS blockchain has 100% block producer participation. A transaction is usually confirmed within 1.5 seconds with 99.9% certainty.
In order to have absolute certainty over the validity of a transaction, a node needs to wait for a 2/3 majority (15/21) of producers to achieve consensus.
Transaction As Proof Of Stake or TAPOS is another feature of EOS. Every transaction in the system is required to have the hash of the recent block header.
This is important because it:
- Prevents transaction replay on different chains (i.e. replay protection)
- Signals the network that users and their stakes are on a particular fork.
This prevents malicious behavior on other chains.
Eliminating Transaction Fees
EOS works on an ownership model whereby users own and are entitled to use resources proportional to their stake, rather than having to pay for every transaction.
If you hold 1% of tokens of EOS then you are entitled to 1% of transactions. Holding tokens represents ownership over bandwidth and in essence, eliminates transaction fees.
The blockchain renaissance of the future
The adoption of blockchain technology is set to hit a tipping point of mass adoption within the next couple of years that will require massive scale.
The increased adoption will bring a lot more developers and projects and EOS is well-crafted to meet developer needs, provide proper incentives, and the performance needed to manage the scale.
It has been said that EOS is capable of running the entire ETH blockchain inside a single contract. This being said, EOS is far more likely to succeed on a massively bigger scale through such a partnership and integration with Ethereum.
The integration of Ethereum and EOS would provide a win-win for both projects in terms of network effects, scale and performance, costs, and interoperability for end-users.
Only time will tell how things pan out for the two projects and into the future of the blockchain renaissance. However, one thing is for sure. EOS is going to be big.
Always Do Your Own Research.
Hold on for dear life.