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:

  1. They plan to completely remove transaction fees.
  2. 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?

#1 Scalability

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.

#2 Flexibility

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.

#3 Usability

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.

#4 Governance

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.

Self-Sufficiency

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 is EOS Blockchain: Beginners Guide

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.

TAPOS

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 DYour Own Research.

Hold on for dear life.

Is EOS the “Ethereum Killer” or will it help Ethereum scale?

EOS has often been referred to as the “Ethereum Killer”. So let’s get down to the basics. if we already have Ethereum, why do we need EOS?

Dan Larimer, the creator of EOS, BitShares, and Steem believes (as many of us do) that in the future, everything will be on the blockchain.

This will require a whole new scale of performance, and that’s where EOS comes in.

What is High Perfomance for the Blockchain?

In existing technologies other than blockchain, we have examples of requirements of 20K transactions per second for credit cards, 52K likes per second on facebook (not including posts, comments and other actions), and 100K trades per second in financial markets, sometimes on a single market pair.

Transactions per second requirements

These are just a few examples. The use cases for blockchain technology are nearly endless.

Use Cases to consider for Blockchain Performance

Let’s look at some of the blockchain use cases beyond currency and dApps:

  • Capital Markets & Securities
  • Supply Chain Management
  • Healthcare
  • Real Estate
  • Media
  • Energy
  • Record & Identity Management
  • Voting
  • Taxes
  • Non-Profit Agencies
  • Legislation/Complicance & Regulator Oversight
  • Big Data & Data Storage
  • Internet of Things

These are all systems that stand to benefit HUGELY from blockchain technology.

Just to take a couple examples, bringing the features of blockchain to Voting, Media, and Non-Profit Agencies would prevent a substantial number of ills that plague modern society.

These would include corrupt politicians, fake or dishonest news media, and phony non-profit organizations.

The Blockchain Industry Requires Massive Scale

If all these systems and more migrate onto the blockchain, they will easily create millions of transactions per second.

There’s a big gap between where we are today and where we need to be to handle millions of transactions per second when we look at the most widely used blockchains.

Among the top cryptocurrencies, ripple is the fastest with 1,500 transactions per second. This number is dwarfed by visa, which can handle 24,000.

transactions per second vs visa

 

Moving these systems onto the blockchain is indeed a big and radical change on a global scale. There are many unknowns about potential impacts this will have on current systems, but there is a grand vision many of us share for blockchain technology.

Introducing Dan: The man with the plan

Dan Larimer (Source: Hackernoon)
Dan Larimer (Source: Hackernoon)

Dan Larimer is a programmer and visionary systems architect who created successful blockchain platforms BitShares (the world’s first fully decentralized exchange) and Steem (a social media platform that pays its users).

Dan’s mission in life is “to find free market solutions to secure life, liberty, and property for all.”

He is also an anarcho-capitalist whose current goal is to “engineer the economic incentives which make freedom and non-violence profitable.”

Right now Dan is working on something that will be bigger than Steem. In fact, its potential is so massive, it has earned the nickname “The Ethereum Killer”. 

After successfully building and launching Steem, Dan moved onto EOS, otherwise known as “Ethereum on steroids”.

A Breakdown of EOS

EOS is an intricately designed system that can be difficult for the average person to understand. It took me months of curiosity to dig deep enough into it to get a good understanding.

The key to understanding EOS and the true potential it represents, is to understand the problems it is trying to solve.

Problems EOS wants to solve

  1. Scaling (e.g. Bitcoin’s scaling war and Ethereum’s crypto kitties)
  2. Cost (e.g. High gas fees on the Ethereum network)
  3. Interoperability (Legacy businesses have difficulties navigating & integrating)

Blockchain technology is redefining the internet as we speak, but most businesses are still facing technical hurdles that prevent them from adopting the technology.

EOS plans to make blockchain technology easy to use and to adopt by creating a blockchain operating system for companies.

The EOS Solution to Blockchain’s Problems

The EOS whitepaper addresses the three problems above in this except below:

“The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications.

This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters.

The resulting technology is a blockchain architecture that scales to millions of transactions per second,eliminates user fees, and allows for quick and easy deployment of decentralized applications.” –EOS White Paper

A Deeper Dive into EOS

EOS has some key features that make the project stand out as an intricate and well-designed solution to the problems blockchain faces foday.

  • Parallel Processing: The ability to do things in parallel, faster transaction speeds and more scalability.
  • A Constitution: A set of rules on which everyone agrees upon. The rules are linked to every block mined.
  • Self Sufficiency and Evolution: The current model allows for a 5% inflation. This will be used to develop the network further.
  • Decentralised operating system: EOS is similar to a decentralised operating system, in practice this means that developers can build applications on EOS.

The utility of EOS tokens

Owning EOS coins is a claim on server resources. A developer needs to have EOS coins to use the EOS blockchain.

Developers will not spend the coins to use the server resources. They just need to prove they hold them. The EOS operating system will be hosted on servers that also act as block producers. Block rewards on EOS are the incentive for servers to host EOS applications.

The applications running on this decentralised OS will be able to communicate with each other. They can share frameworks or libraries which make development faster, more secure and less technical.

EOS will allow developers to create blockchain applications that are easy for end users to interact with. Probably most users will not even know that they are interacting with one when using EOS as this will be completely transparent to the users.

Are EOS Strengths a match for Ethereum weaknesses?

Scale

CryptoKitties, a program that allows users to own virtual cats has exposed serious scaling issues for the Ethereum blockchain.

As a proud owner of my own litter of these unique digital cats, I have first-hand experience with how congested the Ethereum blockchain became with these simple transactions.

Here is one of my favorite kitties. I named him “Edgy Brah” after Eddie Bravo because of his world views.

Cryptokitties Edgy Brah Eddie Bravo

Eddie Bravo Flat Earth

Note that the types of transcations you make with Cryptokitties are all very simple, including: Buy, Sell (Reverse Action style), or Sire (Breed).

Currently, the two other blockchains designed by Dan Larimer (Steem and BitShares) are accounting for a larger share of transactions than both Bitcoin and Ethereum. For Steem, this volume of transactions is not even utilizing 1% of the throughput capacity.

EOS plans to be an even higher performing blockchain than Steem.

Cost

Interacting with the Ethereum blockchain is not a user-friendly experience. One of the main reasons is because Etherum demands users to pay for every transaction.

EOS will not have fees. This will increase adoption. When ICOs can be hosted on EOS without gas fees this will surely help with adoption.

Interoperability

EOS is being developed with capabilities for interoperability with multiple blockchains, so that for example Ethereum could leverage EOS for its superior performance.

As Ethereum continues to struggle to scale at the rate needed by its fast growing ecosystem of large-scale applications, it may one day in the near future face a choice. Either (A) Integrate EOS or (B) Failure

Can EOS and Ethereum work together?

Upon further examination into the strengths and weaknesses of the two projects, one may want to revisit the “Ethereum Killer” concept and consider another probable outcome.

EOS and Ethereum are potentially complimentary components of a system in which Ethereum can benefit from the superior performance of EOS and EOS can benefit from the volume of applications on the Ethereum network.

The Long-Term Perspective

One assumption I am more than comfortable making is that 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.

EOS is far more likely to succeed on a massively bigger scale through such a partnership with Ethereum.

It has been said that EOS is capable of running the entire ETH blockchain inside a single contract.

Due to Ethereum’s first-mover advantage, it has grown to a size that gives it an upperhand that will be a challenge even for a far superior technology to overtake in short time.

Integration with Ethereum and EOS will provide a win-win for network effects, scale and performance, costs, and interoperability for end-users.

Current Price & ICO

EOS is just entering the final quarter of a year-long ICO that started last June. The EOS ERC-20 token is currently trading on many major exchanges and can later be redeemed by investors for EOS tokens on the EOS blockchain once it is live in June.

The current price of EOS is $8.00, which is down a solid 50% from some short-lived all-time-highs in the altcoin rally in January. Anyhow, the current price is substantially higher than it had traded for most of the prior year and we can expect to see the price rise further in anticipation of the official launch of EOS in June 2018.

Some find a year-long ICO odd or frustrating, but it’s due to Dan Larimer’s decentralization philosophy. The year long ICO maximalizes distribution of EOS to a wider userbase.

EOS coinmarketcap March 3rd, 2018
EOS coinmarketcap March 3rd, 2018

If EOS can deliver on its promises, it may bring huge upsides for early investors.

Come June, EOS is going to be big.

Always DYour Own Research.

Hold on for dear life.

Up ↑