EOS is a cryptocurrency that wants to be a direct competitor to Ethereum. It raised more than $4 billion in a year-long ICO, and was designed to run Dapps on a blockchain without having to worry about speed or expending vast amounts of electricity. But as yet it’s untested as a network and has run into a number of problems.
New cryptocurrencies are popping up every day. Some have generated more excitement than others.
Among those hitting the headlines is EOS. This guide will give you a quick overview of what EOS is, a brief history and what’s so special about it.
EOS is best thought of as an Ethereum for big business.
Where it differs from Ethereum, according to the developers, is EOS solves the problems of scale and usability developers experience while using Ethereum. There are a number of other little differences, too, which we explore below.
EOS is owned by an organisation called block.one, but the person most people associate with EOS is Dan Larimer, a software developer who has been involved in other blockchain projects including BitShares and Steemit, the distributed social network. The CEO is Brendan Blumer, a serial entrepreneur.
Did you know?
Daniel Larimer had conversations with Satoshi Nakamoto in the early days of Bitcoin. Satoshi told Daniel Larimer: "If you don't believe me or don't get it, I don't have time to try to convince you, sorry."
📝May 2017, A whitepaper of EOS was released on Github.
💸June 2017, EOS token distribution starts and continues for 341 days.
📡June 2018, EOS goes live.
EOS has two key components that we need to understand: EOS.IO and EOS Tokens. EOS.IO can be best thought of as an operating system. It’s like Windows or Mac OS, it manages all the code that keeps your computer up and running.
EOS Tokens meanwhile, are the cryptocurrency of the network. These are the resources that are used to run and build distributed apps or Dapps, in a similar way to what happens on Ethereum.
EOS uses a different mechanism to verify transactions. Ethereum uses Proof-of-Work where as EOS has developed a new system called Delegated Proof-of-Stake.
Another key feature EOS is promising is scale. One of Ethereum’s challenges is being able to handle multiple transactions at once.
At present, the network currently only supports around 15 transactions per second. By comparison the Visa network can handle 24,000 transactions per second.
Why is this important? EOS wants to create a platform where big businesses can run operations without having to worry about speed.
Did you know?
US citizens were excluded from buying EOS tokens during the initial period of distribution due to regulations on cryptocurrency.
EOS doesn’t use mining like Bitcoin. That technique, known as Proof-of-Work uses a lot of electricity and can only process so many transactions.
Instead, EOS distributed one billion EOS Tokens in a series of sales. After that, EOS uses something called Distributed Proof-of-Stake to create the blocks that make up the blockchain.
In this system the community votes for Witnesses who are responsible for verifying transactions. In this system, if a Witness acts inappropriately, the community can vote them out, and someone else takes their place.
You can buy EOS Tokens by holding Ethereum’s Ether and exchanging it for EOS tokens at exchanges. You’ll also need a wallet that can hold Ether.
Now that EOS has rolled out its own main net, the tokens can be bought using fiat currency.
Did you know?
Many people have tried to work out what EOS stands for. But the creators of the network have decided not to reveal the secret.
EOS has gone to great lengths to not define what can and cannot be done with EOS. But that hasn’t stopped people trading in the currency like they do with Bitcoin.
Did you know?
EOS’ ICO raised £185 million in just five days, beating the previous ICO record of $150 million by Bancor.
EOS generated a huge amount of excitement in the company’s early days. It’s still very early in the development of blockchain so we still don’t know how successful EOS’ will be.
However, the pace of innovation in blockchain suggests a distributed future is closer than we think!