Guides to Cryptocurrencies
Founder: Daniel Larimer
Prominent Developer Group: Block.one
Protocol: Delegated Proof-of-Stake (DPoS)
Speed: Max 4000 TPS
Chinese Name: 柚子
EOS is a cryptocurrency and blockchain that uses Delegated Proof-of-Stake (DPOS) consensus protocol to operate as a smart contract platform and operating system with an election system that allows token owners to vote for block producers who validates transactions and create blocks. With a speed of maximum 4000 Transactions Per Second (TPS) as reported by its largest development team, it aims to provide decentralized applications hosting, smart contract functions and enterprise storage solutions globally. EOS was designed to solve the common blockchain scalability issues encountered by bitcoin, ethereum and other cryptocurrencies with the end goal to eliminate all transaction fees for users on its network.
EOS.IO platform was developed by its founder, Daniel Larimer, and uses WebAssembly (Rust, C, C++) for its smart contract language, a portable stack machine currently being developed by private company Block.one. Block.one was registered in the Cayman Islands and is led by its CEO, Brendan Blumer, and CTO, Daniel Larimer. Daniel Larimer is the founder of BitShares decentralized cryptocurrency exchange, Delegated Proof-of-Stake (DPOS) consensus protocol and the Steemit social media platform.
EOS.IO white paper was published in 2017 and the original test net, named Dawn 1.0 was released on 3 Sep 2017. One billion new cryptocurrency EOS native tokens were issued out as ERC-20 compliant coins to promote and allow everyone globally to launch the blockchain and applications. Brendan Blumer announced that Block.one would use one billion USD funding from token sale to support the blockchain but they exceeded expectations and successfully raised over four billion USD. On 1st June 2018, Block.one successfully launched EOSIO mainnet as an open-source software to the public and migrated its new cryptocurrencies onto it.
The native token of EOSIO is called “EOS” and it provides CPU, bandwidth and storage on the ecosystem as a utility token. Users receive CPU and bandwidth on the blockchain in proportion to the total number of tokens that he/she staked. For example, if you own and stake 5% of all EOS tokens, you will be able to utilize up to a total of 5% available blockchain bandwidth. Storage (or RAM) cannot be acquired through staking and can only be purchased with EOS tokens.
DPoS Voting Mechanism
Users with EOS tokens have the rights to choose and vote for active delegates or block producers for the blockchain. The top 21 block producer candidates that won the most votes will become the official block creators and get paid for their new jobs of validating transactions.
EOSIO blockchain has an inflation mechanism to its native coin supply similar to Bitcoin, Ethereum and most other cryptocurrencies. The difference is that Bitcoin has a cap of 21 million coin supply while Ethereum and EOS have no cap. As of 2019, Bitcoin has an average of 10 minute block creation time and current block reward level is 12.5 Bitcoin per block, this will result in around 657,000 tokens being created per year meaning an inflation of close to 4%. For EOSIO, the inflation rate of EOS tokens is 5% per year adding around 50 million tokens into circulation one year after launch.
Inflation drives the entire EOSIO ecosystem, allowing free transactions for all users, financing block producers and Worker Proposal Fund. 1% of the inflation rate will be used to reward block producers and standby block producers. 25% of the 1% inflation will be used to pay top 21 active block producers and 75% will be allocated to the standby block producers who received minimum amount of votes to be rewarded at least 100 EOS per day. Block producers will need those payments for upgrading and maintaining their infrastructure including increasing RAM capacity and storage to keep up and provide reliable services for the EOSIO ecosystem. The remaining coins from the 4% inflation will be allocated to the Worker Proposal Fund for token-holders elected projects that will benefit the EOS community. Token holders can vote to adjust the inflation rate as and when required, there are already on-going discussions to remove the 4% inflation allocated for Worker Proposal Fund.
Due to the limited number of block producers validating transactions, a block can be produced within 3 seconds when (2/3+1) of the 21 block producers voted on it which requires 15 votes. Users do not need to wait for every block producers to complete the confirmation of transactions. This allows EOSIO to have fast transaction speed of near 4000 Transactions-per-second (TPS) max as reported by Block.one. Comparing to the Proof-of-Work (PoW) coins that validate transactions through mining instead of nodes, Bitcoin is slow at around 7 TPS and Ethereum is able to clear around 15 TPS. Based on a report from MyBroadband, VISA handles on average of around 1700 TPS, derived from its official claim of over 150 million VISA transactions per day although they are capable of processing higher than that.
Users are advised to vote for block producers carefully with the best interest for the EOSIO ecosystem. This will ensure block producers that misbehaved, not qualified or not doing their jobs properly will be excluded from blockchain roles. This is why EOS is regarded by many to be the most democratic and least centralized blockchain in the world since every token owner can exercise an amount of influence on changes for the ecosystem.
Competitor of Bitcoin and Ethereum
EOS reached cryptocurrency market cap of more than $5.4 billion USD and a total coin circulating supply of around 912 million as of 24th May 2019. Some members from the cryptocurrency market touted EOSIO as the ethereum killer and that it will be a tough competitor to bitcoin and other altcoin cryptocurrencies for many years down the road. Daniel Larimer and the Block.one development team announced on 1st June 2019 that they are launching Voice social media platform on the ecosystem to compete with Twitter.
Qn: How can I start to use EOSIO applications and blockchain?
Guides to EOSIO Apps
- Lore Free E-library
- KARMA Social Network
- Top Bidder Auction DApp
- Lumeos Polling DApp
- EOS Discussion App Forum
- HireVibes Recruitment DApp
- Everipedia Encyclopedia Platform
- Chintai Token Leasing DApp
- Murmur Micro-Blog
- Nebula Application Ecosystem
- Paytomat Payment Application
- EOSREX.IO Resource Rental Platform
- Voice Social Media Platform
- USDEOS Duo-Token Stablecoin Platform