At the beginning of 2020, there was a circulating supply of over a billion. Blocks generated on-demand with no market cap. Two years ago, investors were already funding EOS cryptocurrency with over $4 billion before the release.
$4 billion with no product yet. EOS could have been just another one of the many coins released in late 2018. Why would someone bet so much on a token that didn’t prove any results yet?
It’s such a big deal that EOS appeared in the top five of 2019’s best-performing coins.
The founders got it straight: EOS tokens served for operational purposes mainly, not intended to be financial instruments (trading). Any investor would wonder: Should we buy EOS at all?
Today, EOS has shown the real worth of all technological innovation behind it. As we introduce these breakthroughs, many will relate to the long-awaited Ethereum 2.0: fast transactions, low energy costs, and higher throughput.
What Is EOS Cryptocurrency?
EOS(IO) is a decentralized smart contract platform providing fast, free transactions. It aims to make it easy for anyone to develop on their platform. They base on a user-friendly interface and support decentralized apps(dApps) for developers.
The EOS (EOS.io) believes to be the solution for the financial sector, which requires thousands, if not millions of operations made per second.
According to the company vision(block.one), EOS plans to expand on four areas:
- Scalability to optimize resources(CPU, NET bandwidth, and RAM) in proportion to the stake we hold
- Developers who may want to leverage free and fast transactions on EOSIO
- User feedback to keep the platform effective and secure for everyone
- Enterprises which require faster smart contract processing
Now, many platforms share these objectives, and very few get the reception EOS got. What makes it different is a solution to the multiple problems in the crypto-world:
- Slow transaction speed. EOS protocol allows them to beat the average rate of Bitcoin or Ethereum, which is 3-15 transactions per second. EOS already manages over 3,000 per second and aims to surpass 100,000 soon.
- Transaction fees. Service costs add up fast, which makes frequent transfers not viable. Not only it works far quicker, but also for free.
- Lack of scalability. In EOS, you only “pay” for the resources you need. It uses delegated proof of stake, so the more tokens you stack, the more features you unlock. Generic users only need a few EOS to use the platform(costing around $3 today in July 2020), while expert developers may need around a hundred.
- Computer power limited. Twenty-one nodes compose this network, being twenty of them elected by stakeholders. Anytime, they can reassign their votes to the most effective node for the network among hundreds of candidates.
- Complex development. EOSIO brings an intuitive platform with lots of developer tools. This space already supports C++, which instantly attracted professionals. Within the first year, EOS was already supporting 235 dApps.
5 Key Features Of EOS Cryptocurrency
The following features help us understand how this “operating system” works and what makes EOS so intriguing for developers:
1. Delegated proof of stake
This network distributes across twenty-one nodes known as witnesses. Every stakeholder delegates work on these computers to generate and validate blocks except for the 21st selected randomly.
More tokens scale voting power just as it does with dev resources.
2. Democratic Inflation-based Economy
EOS cryptocurrency seeks a balance between transaction speed and control. It does sacrifice some decentralization while still keeping robust cybersecurity.
The network nodes used to be large hardware enterprises chosen because of their capabilities. Since it only operates with 21 nodes, the EOS protocol consumes far less energy than Bitcoin’s proof-of-work.
Of course, voters elect whoever they think will better generate blocks for them, thus preventing unethical practices. However, investors have concerns about this weighted democratic model. Whoever held the most EOS cryptocurrency would have massive influence over the network. Such power may lead to centralization.
3. Distribution of the inflation rate
But the EOS team has thought of that already. Since witnesses have incentives to earn more, the system limits the yearly inflation rate to 5%, as high as it can be.
This rule will cap producer awards to prevent anyone from misusing the platform. Likewise, candidates won’t receive rewards if they don’t create at least 100 EOS tokens per day. It ensures that nobody votes for themselves to get rewards with a fake candidacy.
Every year, this 5% inflation distributes 1% to reward block producers(25%) and voters(75%). The remaining percentage saves as a work-on-proposal fund. So the team can invest in anyone looking to improve the network’s infrastructure.
4. Role-based permissions
A useful feature helps developers to manage teams. The platform includes two default roles(which you can use to expand on top): Owner and Active.
Any Active user can vote, transfer funds, and execute high-level account changes. The Owner role should only symbolize ownership and manage everyone else’s permissions. Very few changes require this entry-level, which is why it mainly serves to restore compromised permissions. Never share it with anyone.
5. Permissioned private keys
Security in EOS is just as important as in any other platform. Because we’re exchanging cryptocurrency, any change is likely permanent: protection is a must.
As a common practice, the platform adds 2FA authentification. You will require a code that changes every few seconds and is exclusive to your trusted device.
Has someone accessed your account? Don’t worry: your tokens are safe. Any critical change will restart the same verification steps again.
We know these features may sound a bit complex for an introduction. Here’s a flow chart with everything you can do with EOS.
Is EOS “Better” Than Ethereum?
By the time EOS came up, thousands of developers were already working on projects powered by Ethereum. If you’re going to create a large scale platform, the features must be valuable enough to make it worth switching platforms.
The current Ethereum entitles the whole network resources as long as you pay the fee. It may first sound as if you were getting a lot, but let’s not forget that you’d be sharing those resources with everyone else. This volume may be limiting ETH’s transaction speed.
In EOS, there are no transaction costs. Depending on how many tokens you stack, it assigns processing power and bandwidth. You only pay for what you need, and you can buy RAM from an internal market. As more people adopt this cryptocurrency, traders might expect it to rise from three dollars to over a hundred, if not a thousand, within a decade.
Delegated proof of stake proves more efficient than ETH’s current proof-of-work, although they’re transitioning to proof-of-stake in the new version.
Despite offering faster speed, EOS will need to change in order to meet the financial demand. The current model isn’t as decentralized as PoW to secure smart contracts.
Ethereum uses Solidity as a contract-oriented coding language. EOS cryptocurrency uses C++ and includes a compiler, so you can choose any language you prefer. That’s a plus that will attract new developers.
You just need to look at the hundreds of dApps powered by EOS, most of which are games, gambling apps, and exchanges.
Yes, exchanges. One can create its own cryptocurrency from EOSIO via cross-blockchain. You can leverage the infrastructure and start your network with tokens and block producers.
How To Use EOS?
Due to its popularity, you can purchase this token on almost every major exchange, including CoinBase, Kraken, BitFinex, Bittrex, and Binance.
Mind that when using the DPoS model instead of PoW, we use a saving strategy instead. We will need a safe wallet to stack our tokens (we recommend Exodus for computers and Ledger Nano X for hardware wallets).
You may need to set up an EOS account if you plan to stake EOS. Once you buy tokens from the exchange, you transfer to the wallet and choose the amount to stake. You just need one or two tokens to use the network, which you get back once you unstake. Remember to add a bit more since a 1% fee may apply.
What Can We Expect From EOS CryptoCurrency?
As we’ve seen, the platform offers real value that may increase its adoption within a few years. If the innovation wasn’t enough, Block.one has just released a massive update this July: EOSIO 2.
“The new Quickstart Web IDE lets developers start building full-stack EOSIO dApps within minutes.”
As soon as it went live on 4th July, EOS started a positive trend in the performance chart. It did impact the price but not at the same point the pandemic incident did. Knowing the average price has always wavered around $5.50, stakeholders could see it surge from the current $3.06.
It’s also true that the funding happened in early 2018. Back to the Bitcoin bubble, crypto-investors would make pretty risky decisions since every coin was surging.
Most wouldn’t surprise if EOS were worth over a thousand dollars someday, especially with all the innovation we’ve seen. Otherwise, why would investors spend billions on it?