EOS is the cryptocurrency of the Eos.io blockchain, which aims to be the most powerful infrastructure for DApp development in terms of:
- Number of transactions per second
- interoperability with other blockchains
Some called it the Ethereum Killer because of its competitive ambitions and promising team, while others consider its DPoS-based governance too centralised.
Eos is the deity of dawn in Greek mythology, later called Aurora by the Latins.
What are DApps?
DApps are decentralised applications and differ substantially from the apps we are used to. Traditional apps, which we download from the Apple Store or Google Pay, are:
- developed and updated by a few people
- free (or paid) and identical for each end user
- “stored” in a given geographical area on centralised servers
On the other hand, Decentralised Applications are:
- Decentralised. They operate on a distributed computing system (i.e. a set of computers located anywhere in the world).
- Open-source. Their programming code is public and can be taken over by others to be improved or adapted to the needs of a given purpose.
- Self-sustainable. They do not need to sell advertising space within the app to keep going. Depending on the conditions expressed by smart contracts and distributed consensus models, DApps are self-sustainable, both financially and in terms of development. Only the complete abandonment of the project by developers and end-users would determine the end of a DApp.
Dapps on Eos.io, for example, are self-sustainable as the network is based on a reward system:
- It rewards developers and marketers
- Users pay to use the services offered and earn money if they want to contribute to the maintenance of the DApp
- It rewards developers for their work.
If we think of blockchain as the Internet and smart contracts as the World Wide Web (www), decentralised applications (DApps) are comparable to Facebook, Twitter or YouTube.
The virtual land game Upland is an Eos Dapp, as is EOS Dynasty, a role-playing game in which participants’ actions are powered by cryptocurrency.
How was Eos born?
EOS is the brainchild of crypto celebrities. Daniel Larimer is best known for creating Bitshares and Steem, the blockchain behind the social network Steemit. As Chief Technology Officer of Block.one, Larimer is the main architect behind the Eos.io software.
Larimer had already experimented on these projects with a new consensus mechanism of his own invention, the Delegated Proof-of-Stake (DPoS), a mechanism that only shone with the rise of Eos.
Founded in 2017 by Larimer and Brenden Blumer, Block.One is the private company that developed the Eos.io protocol, famous for launching the largest ICO in history: it raised over $4 billion, selling 1 billion EOS in its first year.
Differences with other blockchains
Like any other cryptographic project that focuses on development rather than payments, Eos.io takes after Ethereum. Its technology attempts to solve the historical problems associated with DApps, which have congested even a long-lived and stable blockchain such as Ethereum, resulting in performance problems for all users.
Eos.io is therefore a blockchain with an ideal and simple architecture for DApp developers. Unlike the others:
- It allows more transactions per second (4,000)
- It doesn’t charge any transaction fee. These are charged to DApp developers who have to pay for network resources.
- It allows DApp developers to use traditional programming languages instead of a project-specific language.
The EOS blog provides guides, tips and tutorials on the network for developers.
Block.one has launched a social network based on Eos.io that is currently in the testing phase. It is called Voice and creator Daniel Larimer wants to go a step further than his previous social project, Steemit, by implementing an anti-spam system in the platform. In March 2021 Voice announced that in addition to a social, it will also be a platform for the creation and exchange of NFTs.
Everipedia: on-chain knowledge
Everipedia is a for-profit online encyclopaedia, similar to wikipedia, but based on the Eos.io blockchain and powered by its cryptocurrency, the IQ token. One of the company’s goals is to prevent certain countries from blocking content, through the integration of the blockchain model, which is immune to any kind of censorship.
In this way, countries like Turkey and Iran, which block Wikipedia, are no longer able to do so. Mike Novogratz, CEO of Galaxy Investment LP, and Block.one leads a group of institutions that invested $30 million in Everipedia on February 8, 2018. Novogratz also funds Eos.io Ecosystem, a $325 million joint venture between Galaxy Digital LP and Block.one.
In December 2020, Everipedia also formed a partnership with The Associated Press (AP), an independent US news agency.
Why buy EOS?
- Portfolio diversification. The value of EOS is linked to its use to build and power the DApps and the governance of Eos.io. The more successful the DApps based on Eos.io and its large-scale use, the greater its value.
- Stake. Being based on a form of Proof-of-Stake, it is possible to stake EOS earn periodic incentives.
- Build a DApp. A developer simply needs to hold EOS coins, rather than spend them, to be eligible to use network resources and to create and run dApps. A token holder who does not run any apps can also allocate or rent its bandwidth to other participants who may need it.
- Play. If you are a gamer, EOS is the currency to use for games built on Eos.io.
- Participate and vote. Collect EOS to have voting rights on the network and support the infrastructure changes you think are right.
Diving Deeper: How DPoS (Delegated Proof-of-Stake) works
We explained the differences between Proof-of-Work and Proof-of-Stake in the article on Ethereum 2.0, which is converting to the latter and thus increasing its scalability, something that Eos.io is still better at.
The Delegated Proof-of-Stake consensus model, DPoS for short, is based on staking, whereby all Eos.io participants have to stake an amount of Eos, even if only to open a wallet. Regarding the validation of transactions, the mechanics vary slightly. Whereas in PoS, validators are chosen on the basis of the tokens they are staking, DPoS requires a second step.
Those who have staked at least 1EOS vote for the nodes that will confirm the transactions. These nodes are called Block Producers (BP) or Supernodes and are the voting delegates (or witnesses). On Eos.io there is a defined number of Block Producers: 21. This small number makes the network more scalable, but some consider it centralising, not least because of the (proven) risk of Block Producers cartels forming.
The governance of Eos.io has a further peculiarity: it has a proper Constitution, and its guidelines can be found on the EOS Github page.
It is also worth mentioning that Block.one, as the recipient of 10% of the first tokens created with the ICO, has also regularly taken part in the Block Producer voting since 2018.
Finally, in October 2020, none other than Google Cloud joined Eos.io’s list of Block Producer candidates.