EOS was launched in June 2018 with ambitions to establish itself as the go-to blockchain for developers to build decentralized applications (dApps).
EOS aims to make it easy for programmers to embrace blockchain technology. To do this, the project is investing millions into the creation of resources and educational tools to help easily onboard developers to the platform.
If EOS becomes the most user-friendly blockchain available to developers, they can be certain it will become the go-to choice for developers. Where the developers go, the users will flow.
Other goals include fixing the scalability issues faced by other blockchains such as Bitcoin and Ethereum. This mainly includes the time for transactions to be processed and the cost of doing so.
By improving the experience for both developers and users, EOS hopes to capture a larger percentage of the pie that’s currently being fought over by many layer 1 blockchains. This fight is currently led by Ethereum. This ambition is why many have dubbed EOS an “Ethereum killer” since its launch.
Let’s dive into EOS and figure out how it works, what makes it so cool, and its drawbacks.
So how does it work?
EOS makes the development of blockchain-based applications easy. Think of a platform like Shopify or Wix. Look at how easy they made it for developers to build websites. Everything a developer needed was put into one place and made super accessible and easy to understand. These projects invested heavily in training, education, and user-friendly tools. That’s what EOS is doing for businesses and individuals entering Web3.
The fundamentals of EOS Token and EOS.IO
Okay, so let’s keep things clear and concise.
EOS.IO is like the operating system of a computer. Think of it like iOS, or macOS on your Apple products. It manages and controls the EOS blockchain.
EOS is the native token used on the blockchain. They can be used as payment on the network. Developers hold them to access tools and build on the network. And with them, holders have a kind of governance on the network (which we’ll go over when we discuss how the EOS network is secured).
What makes EOS special?
Firstly, EOS is tackling the scalability faced by its rival Ethereum. It does this by utilizing a different consensus mechanism to secure its network. A consensus mechanism is a method in which a network verifies transactions on a blockchain and is key to maintaining security. Ethereum is notoriously bad at this, with security that is considered slow and expensive. EOS solving this issue is its first big win.
Secondly, if it makes it as easy to build dApps on their platforms as they claim, developers will shift over to their platform and build on EOS. This would in turn bring more apps, and then more users to the network.
So, by making dApp development easier, and solving issues of scalability, EOS could become a dominant space in this competitive landscape.
How can EOS improve scalability?
As mentioned, EOS uses a different consensus mechanism which eliminates the slow transaction times and high gas fees faced by competitors. The consensus mechanism used by EOS is called delegated proof-of-stake.
Delegated proof of stake works similarly to regular proof of stake (PoS). However, it involves a voting and delegation mechanism to incentivize users to secure the network with their staked collateral.
Delegated proof of stake allows users to spend their coins to vote for various delegates. They essentially choose who gets to verify the transaction. The delegated proof of stake mechanism utilized by EOS appears to be an effective one that is both sustainable and scalable.
A centralisation issue?
The EOS platform was built by a company called Block.one.
As we discussed in a positive light before, token holders have the ability to vote on who gets to verify the transactions thanks to the delegated proof of stake consensus mechanism. They also have the ability to vote on other factors such as protocol changes.
However, critics view this as negative. They believe that the extensive involvement of Block.one means the decentralization that makes most blockchains so appealing is lost. The tokenomics however don’t really suggest this as only 10% of tokens from the ICO continued to be held by the founders, with 90% going to investors. Also, note this allocation to Block.one isn’t happening overnight but over a 10-year period.
