A beginner’s guide to the dapp platform that looks set to be one of the industry’s main contenders.
A blockchain platform for the development of decentralized applications (dapps), EOS is being built with the aim of creating the world’s most powerful infrastructure for dapps. Regularly listed as a leading contender to Ethereum, EOS released its Dawn 3.0 update in April 2018 and quickly became one of the five largest cryptocurrencies by market cap.
There’s plenty of hype surrounding the platform and its native token, also called EOS, so let’s take a closer look at how EOS works, the benefits it offers and what the future might hold for this ambitious project.
Live EOS (EOS) price
What is EOS?
EOS offers an operating-system-like set of tools and services for 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 resulting technology is a blockchain architecture that may ultimately scale to millions of transactions per second, eliminates user fees and allows fothe creation, hosting and execution of commercial-grade dapps. Its software includes everything from user authentication and accounts to cloud storage and server hosting, with the aim of providing an all-in-one solution for dapp developers. EOS is designed to not only ensure the quick and easy deployment of dapps, but also to potentially scale to millions of transactions per second and eliminate user fees.
EOS is similar in many ways to Ethereum, the original dapp platform that invented the smart-contract system and is the world’s second-largest digital currency. However, while EOS is currently still running on the Ethereum blockchain as an ERC20 token, the project’s mainnet is scheduled for release in June 2018. When this happens, holders of EOS tokens will be able to exchange them for EOS coins, which will be hosted on the EOS network.
Where to buy EOS
What does the EOS coin do?
The EOS coin is the native currency of the EOS ecosystem. Once the EOS mainnet is live and developers can create and deploy dapps on the network, they’ll need EOS coins in order to generate tokens for their own platforms. Whether or not an application will actually be accepted on the EOS platform will also be determined by a voting system only available to EOS token holders.
In a unique move, the EOS token sale began in June 2017 and is taking place over the best part of a year (341 days), though US residents are not allowed to participate in the token sale. The year is split into 350 periods of distribution – at the end of each period, the total number of tokens to be distributed during that period will be allocated to buyers based on the amount of Ether (ETH) they contributed as a proportion of the total ETH received during the period. Once the token sale is done, 1 billion EOS tokens will have been distributed.
What makes EOS unique?
What problems does EOS aim to solve? Why does the world need another blockchain-based dapp platform? The most succinct explanation of what the project aims to achieve can be found in its white paper abstract:
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 resulting technology is a blockchain architecture that may ultimately scale to millions of transactions per second, eliminates user fees and allows for quick and easy deployment and maintenance of decentralized applications, in the context of a governed blockchain.
In a lot of ways, EOS aims to do what Ethereum does – but in a new way. While Ethereum uses its own programming language, EOS focuses on user-friendliness by allowing developers to create smart contracts with a host of widely used existing programming languages. While Ethereum is looking for the best solution to the scalability problems that currently limit the number of transactions it can process at any one time, EOS uses a delegated proof-of-stake algorithm that’s designed to scale much more effectively. Whether this proposed solution works or not remains to be seen.
In short, EOS aims to offer a complete toolkit for dapp development, making it quick and easy for businesses and individuals to create blockchain-based applications.
How it works: The technology behind EOS
In its white paper, the EOS team outlines some of the key requirements for blockchain applications, including:
- Support for millions of users
- Free usage
- The flexibility to ensure easy upgrades and the fixing of bugs
- Low latency with a delay of no more than a few seconds
- Sequential performance to handle high volumes
- Parallel performance to divide the workload of large applications across multiple CPUs and computers
To achieve these goals, EOS uses a delegated-proof-of-stake (DPoS) consensus mechanism.
Under this system, anyone who holds tokens on a blockchain that uses the EOS software can select block producers through a continuous approval voting system. Anyone may choose to participate in block production and will be given an opportunity to produce blocks, and the software enables blocks to be produced every 0.5 seconds exactly. This is designed to not only provide the flexibility needed to upgrade the system or fix bugs, but to also allow the system to scale toward 1 million transactions per second.
Other features of the EOS software include:
- An authentication system that includes user accounts with different permission levels
- Server hosting and cloud storage
- Parallel execution and asynchronous communication to allow the support of thousands of commercial-scale dapps
The EOS team
EOS is being built by block.one, a Cayman Islands exempted company. 100,000,000 EOS, or 10% of the total amount of EOS tokens to be distributed, will be reserved for block.one and not offered to the public as part of the token sale.
The project is led by block.one CEO Brendan Blumer and CTO Daniel Larimer, both of whom have significant tech experience. Larimer in particular has an impressive resume, having played a key role in the development of successful crypto projects Steem and BitShares.
But while block.one is building the EOS software, it will not configure or launch the EOS blockchain platform – this will be managed by members of the community unrelated to block.one.
Recent months have seen the announcement of a couple of key partnerships that could drive the future growth of the EOS ecosystem:
- In January 2018, block.one announced a joint venture with digital assets merchant bank Galaxy Digital focused on developing the EOS ecosystem and investing in projects that use EOS blockchain software. This saw the creation of a new $325 million EOS.IO Ecosystem Fund.
- In March 2018, block.one announced a $100 million joint venture to develop projects that use EOS software with German fintech incubator FinLab AG.
Wallets that support EOS tokens
For long-term storage of your EOS (ERC20) tokens, you’ll need to find a secure wallet that lets you retain control of your private keys. EOS recommends using either the MetaMask Chrome browser add-on or MyEtherWallet to store its ERC20 tokens. This information is likely to change, however, when the EOS mainnet goes live and the EOS ERC20 tokens are swapped for EOS mainnet coins. Check the EOS announcements page regularly to keep updated.
Please note that the EOS website also features a list of those wallets that are known to be incompatible with the token sale, such as the Jaxx mobile and desktop wallet, Exodus and wallets offered by a number of crypto exchanges.
What’s next for EOS: The EOS roadmap
In April 2018, block.one announced the first feature-complete pre-release of the EOS software, known as Dawn 3.0. You can check out this blog post for a full rundown of what the update provided, but highlights include improved scalability features, inter-blockchain communication using light clients and security delayed transactions.
On April 6, the day of the Dawn 3.0 release, EOS was trading at $6.10. However, excitement generated by the update, set against a background of widespread market optimism, saw its price climb above $18 by the end of the same month.
The launch of the EOS mainnet is scheduled for June 3, 2018. This is obviously a huge milestone in the project’s ongoing development and one that could have a huge impact on the adoption of the platform, not to mention on the value of its native currency. If all goes smoothly and the software functions as promised, including a planned initial goal of 1,000 transactions per second, it could mean big things for EOS in the months ahead.
On June 2, 2018, at 22:59:59 UTC, shortly before the launch, EOS tokens will be frozen on the Ethereum blockchain. These tokens will then be converted to “real” EOS tokens on the EOS blockchain. If you own any EOS tokens that were purchased on an exchange, you’ll need to register your ETH address (where your current EOS tokens are held) to a public EOS key by June 1.
What to watch out for
The key issue to be wary of if you’re thinking of buying any EOS tokens is simple: It’s still being developed. Until its mainnet is launched in June 2018, noone can say for certain whether it will be able to deliver on its revered potential.
Will it function smoothly without any bugs or technical issues? Will it be able to deliver the oft-talked-about scalability that could see it process millions of transactions per second? In other words, will it offer an efficient and effective framework that will attract dapp developers in droves? Only time will tell.
It’s also important to point out that EOS is operating in a highly competitive corner of the cryptosphere. Not only will it need to do battle with the much larger and well established Ethereum, which does admittedly face its own challenges, but EOS will also need to compete with other highly valued projects like NEO, Lisk and Qtum.
If you’re considering buying any EOS tokens, make sure you do your own research before parting with your hard-earned cash. While EOS could one day offer a viable alternative to Ethereum and, on paper at least, has a few key benefits over the Ethereum network, the key fact to remember is that it’s not yet proven. Furthermore, while EOS is being developed, Ethereum and other established dapp platforms continue to grow and cement their position.
If the June 2018 launch goes smoothly and as scheduled, and subsequently delivers on its spectrum of promises, EOS certainly has the potential to become a major contender.
Frequently asked questions
Disclosure: At the time of writing, the author holds IOTA and XLM.