With the introduction of its first initial coin offering (ICO) in July 2017, the EOS blockchain shook the blockchain world with its entrance. The smart contract environment of the EOS allows businesses and industries to develop scalable decentralized applications (dApps) in a way similar to web-based applications. This blockchain supports diverse features and has been a potential competitor of both market leaders (Ethereum) and newcomers (Tron and Neo).
What is EOS, and how does it work?
First launched in 2017 by Block. One company, EOS (short for the electro-optical system), is a blockchain-based decentralized platform that operates on a Delegated-Proof-of-Stake (DPoS) consensus mechanism and is used to build a wide range of industrial-scale dApps and ecosystems.
The robust and agile infrastructure of EOS blockchain provides a user-friendly and business-friendly environment to create dApps while avoiding the issues of high fees and slow transaction speeds of traditional blockchains (e.g., Ethereum).
The EOS network has two key elements:
- EOSIO/ EOS.IO software works like the operating system of a computer. It is responsible for controlling and managing the blockchain network while also ensuring two-dimensional (vertical and horizontal) scaling of the dApps;
- EOS tokens are the cryptocurrency of the EOS network. Moreover, to use the network resources, and build and run dApps, it is a prerequisite for a developer to hold EOS coins and not spend them.
EOS blockchain has been embraced by the blockchain community. Ubuntu Energy Ledger, All_ebt Food Stamps, and DACTROIT are some of the numerous applications that have been built on the EOS platform.
Before starting to trade on the EOS blockchain, users need to create an EOS wallet that can send and receive EOS tokens while also storing private-public key pairs. The most popular EOS wallet examples include Exodus Mobile, MyEOSwallet, Guarda, and Scatter.
Technical features of EOS
In 2016, Ethereum suffered an infamous DAO hack in which hackers exploited a code vulnerability of the blockchain and stole coins worth around $60 Million leading to the creation of a hard fork called ‘Ethereum Classic’.
The DPoS mechanism protects the EOS blockchain from such security threats since it involves elected delegates who continuously monitor the network and can freeze faulty dApps.
Processing any transaction on a PoS-mechanism-based blockchain network requires the consensus of all network nodes, reducing the number of transactions executed per second (TPS), also known as scalability.
EOS blockchain officially reaches a transaction capacity of 100,000 TPS, which is significantly higher than its opponents, such as Visa (1700 TPS), PayPal (193 TPS), Ethereum (27 TPS), and Bitcoin (7 TPS).
EOS network achieves higher transaction rate via- horizontal scaling, i.e., adding more systems to its network to widen its resource pool; vertical scaling which involves boosting the computing power of specific parts of the network or dApps.
Transactions on the Ethereum blockchain require the user to pay the gas fee, which gets more expensive as more people use the network.
The working of the EOS blockchain differs in this regard as it bestows its user’s ownership of the network resources (e.g., computing power) in direct proportion to the tokens they hold. This method replaces the payments for individual transactions.
- Comprehensive permissions
Creating custom smart contracts and permission schemes for various businesses is the primary focus of the EOS network.
The comprehensive permission system of EOS can be used by developers to safeguard specific smart contract features. Moreover, this crypto platform offers the feature of splitting authorities required to invoke a smart contract function, across different accounts with different command weights.
All EOS-based apps are upgradeable and modifiable meaning users can implement code fixes, and make additions or changes in the application’s features and logic. Moreover, rather than dealing with permanent bugs, the EOS network allows developers to renew their dApps.
- Multi-tasked processing
The parallel processing of EOS smart contracts can be achieved by three prominent features. First, through asynchronous communication, transaction parties need not be present simultaneously to communicate.
Secondly, the interoperability feature enables the smooth transfer of data and information between two blockchains.
Thirdly, the horizontal and vertical scaling options of the EOS enhance the transaction capacity of the network.
Ups and downs of EOS blockchain
During its 2017-2018 ICO, EOS raised the equivalent of around $4 Billion by releasing over 700 Million tokens. However, its user base started shrinking after four years. Moreover, the value of the EOS token toppled from $10 in June to $4.46 in August 2021.
Conclusion
Presently, the EOS blockchain has become the most widely used blockchain-based network worldwide. With its permissioned and enterprise-scale nature, it is becoming a platform that can provide several benefits to businesses and industries.
However, there are still some doubts and criticisms from the blockchain community members regarding the undelivered promises and degrading quality of EOS.IO code that need to be addressed.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
