7 Reasons why EOS is the next big thing


You may have heard about EOS here and there and a lot on the FLIPHODL telegram for a while now, but maybe you didn’t take that much time to learn about how this new open-source infrastructure is so different from what was proposed until now. Here is why EOS is currently trending and why you should consider being involved.

Heavy Background

Even before talking about any concrete technological advancement, looking at the team backing EOS should make you feel comfortable investing in the asset. EOS core is being developed by Block.one, which acts as a foundation seeking for fundings to provide an autonomous and open-source software. The heads of Block.one are Brendan Blumer (CEO), an inventive entrepreneur who started his quite successful career at 15 years old and Daniel Larimer (CTO), a genius entrepreneur who is better known for his technical skills. The latter notably designed Bitshares and Steemit. One of the co-founders and team member of Block.one is Brock Pierce, an influent investor in the blockchain world who is not less than the co-founder of Blockchain Capital (Coinbase, Kraken, Civic, …) and Chairman of the Bitcoin Foundation. Recently, Richard Jung, former CEO of Bithumb (the current biggest crypto exchange in the world), joined Block.one as the lead developer for Korea.

Laudable Ideology

Before we talk about the 1 year ICO and the incredible amount of money it brings to Block.one daily, I think it is important to talk about the mindset of Block.one leaders.

Dan Larimer and Brendan Blummer don’t need money. Like Brock Pierce, they were multi-millionaires way before EOS was in the picture. Dan Larimer was a crypto-anarchist way before you’ve ever heard about cryptos.

EOS is actually the technological and ideological continuity of Dan’s decentralized projects Bitshares and Steemit. On the technical side, EOS borrows from them their capacity to process an astonishing amount of transactions/second, to be user-friendly (readable addresses and no fees) and to be totally immutable. On the ideological side, EOS pursue the idea that a blockchain must be capable of being more than a trustless means of exchanging value and data. It aims to be a Decentralized Autonomous Organisation, or Decentralized Autonomous Company, like described by Dan Larimer himself in 2013:

Think of a crypto-currency as shares in a Decentralized Autonomous Corporation (DAC) where the source code defines the bylaws. The goal of the DAC is to earn a profit for the shareholders by performing valuable services for the free market.  With this goal in mind set out to maximize shareholder value at every stage as you design the bylaws that govern operation of the DAC.

Bitshares is a decentralized exchange, Steemit is a decentralized social network/blog platform, EOS is a decentralized operating system allowing the creation and hosting of such specific networks as well as an infinite variety of other specific networks that can be interconnected at will. To summarize, we can think of EOS as a mix between the Bitcoin initial ideology (headless, unstoppable and uncensorable), the Ethereum technical concept (smart-contracts) and… Dan’s innovative touch.

Terrific Technology

EOS isn’t cool because it’s new or because it brings some improvements to the world of trustless communication. EOS is cool because it answers to specific needs while providing the basis for even more advanced developments. Say goodbye to block size issues, gas war, network congestions, inefficient smart-contracts, painful forks and say hello to a variety of features that will make decentralization powerful, accessible and responsive.

  • DPOS – You probably know Proof of Work (PoW) and Proof of Stake (PoS). Well, Delegated Proof of Stake (DPOS, which is btw another thing invented and designed by Dan Larimer) is a system where stakes have the ability to vote for block producers. There are 21 block producers. This number is actually not that much arbitrary. It is not too much so we can identify them, but it is still a sufficient number so we avoid centralization. If you have any doubt about the latter issue, think about the pooling that occurs in the current decentralized ecosystems: Bitcoin’s network is almost entirely maintained by 15 pools and 5 pools share 75% of the hashrate. The situation is very similar to the Litecoin and Ethereum ones. For all of those blockchains, 3 pools share more than 51% of the hashrate.
  • Accounts – Similar to what is already available with Steemit, fucking unreadable and impossible to remember addresses are replaced by names that users choose when they create an account. With EOS, it goes deeper since you actually create domains and subdomains like “@Savings.BillyAccount”. How awesome is that?
  • Roles and Permissions – This feature is extremely powerful since it enables out of the box anything related to data sharing. Let’s say you want to store a picture on the blockchain with a service similar to IPFS (but built on EOS). You will be able to manage in a very handy way who can access it and what actions this account will be able to perform on it, exactly like a file manager on Windows. Now you understand why EOS is actually an OS.
  • Sandboxing – I’ll quote the whitepaper: When an unstoppable application acts in an unpredictable manner, “a blockchain using EOS.IO software allows the block producers to replace the account’s code without hard forking the entire blockchain. Similar to the process of freezing an account, this replacement of the code requires a 17/21 vote of elected block producers”.
  • And many many more fascinating and deeper features that I invite you to discover in the technical whitepaper.

Decentralizing Everything

Well, actually, with some improvements of their core, a few forks or off-chain add-ons, any blockchain would be able to propose the features mentioned above, even if the DPOS+sandboxing infrastructure may be a bit touchy to be applied in a patchy way. One particular thing, however, places one more time EOS above all its competitors right out of the box: its capacity to process up to 100 000 tx/sec single threaded and up to 1 freaking MILLION tx/sec with parallelization.

Today, even a stupid game with collectible cats can’t properly run on Ethereum, a network that can handle up to 100 tx/sec (but operating at 20’ish). Not that we are specifically hostile to Ethereum, the issue would certainly be the same on the vast majority of available blockchains, but Ethereum is the main network for smart-contracts as of today and it is facing scalability issues that need to be addressed. So, how are we supposed to run the decentralized applications of tomorrow if they are not conceived for and hosted by the proper infrastructure? Paypal is around 200 tx/sec, Visa is around 2000 tx/sec with 4000 tx/sec peaks, Twitter activity, Bing queries and Facebook status updates are between 500 and 1000 tx/sec.

Decentralized social medias and payment processors will not be on the Ethereum network, they will be on the EOS network.

By the way, if you want a complete and comprehensive guide to the differences between Ethereum and EOS, I suggest you read this.

Fairest ICO

To make sure that everyone is able to participate in the EOS ICO, Block.one decided to distribute all the tokens over a period of 341 days. While it may be the most inclusive ICO ever, many investors used to fast and furious crowdsales saw this as scam attempt. During the first weeks, there was a lot of FUD like herethere or even there. Some thought that people involved in Block.one would risk everything to capture a few million from seemingly blatant money laundering strategies. Others thought that Block.one would develop no product at all or that taking Bitshares as a part of the base infrastructure was something completely delirious.

Of course, you don’t have the time to elaborate all these theories when the ICO ends after 17 freaking seconds. But Block.one chose otherwise and decided that the initial development had to be twinned with the initial tokens distribution. A regularly updated testnet acts as a “beta test” for the software and the network, ensuring that all the planned features are ready to be launched at the end of the ICO.

A 1-year ICO seemed long at first, but now that we are 4 months away from the launch, it feels totally decent. It was enough time to build a strong community of developers, raise awareness among investors and future users, and support the first projects to run on the network. The beta (testnet) is currently running for 2 months and you can join anytime. On this matter, I suggest you read this or simply go to the official website.

Though, you may wonder what it means exactly to own EOS tokens besides its speculative aspect. Even if Block.one like to legally keep its distance with the token issued during the ICO, owning EOS ERC20 tokens is the equivalent of owning a part of the project (next chapter details this point). The EOS technical whitepaper states this at the very beginning and a bit everywhere after:

This means that Block.one will not be the owner or head of EOS. They will deliver the open-source software and anyone will be able to run its own version on its own network. The thing is that, and that is why this double shot legal/ideology is nicely thought, developers are more likely to be financially involved in the project (i.e. they’ll have ERC20 tokens), so, of course, whatever happens (see [Note] below), someone competent enough will launch the EOS network that will import the current ICO’s data and instantly resume the activity of an already existing and strongly supported multi-billion $ market.

To further support the current ICO, Block.one may partner with a few relevant projects that wish to base their distribution on the EOS holders pool via airdrops. One of the first projects that announced an airdrop to EOS token holders is the decentralized Wikipedia named Everipedia. That means EOS token holders will not only own a part of the EOS project, they will also own a part of some pioneering Dapps to be deployed on the main network.

[Note] – Worst case scenario: someone creates his own EOS network, starts an ICO for the distribution and a gazillion developers + investors jump in. The developers have in mind that they are willing to make this clone more interesting if they have parts in it. They would code for a lot of money, which is less sure with an already done ICO (the original one). However, it is not like a load of devs would suddenly express interest in EOS after the end of the original ICO. So how long should be this new ICO? How fairly should the distribution be thought?

Smartest Investment

Following the distribution, the EOS software is conceived to economically link block producers, stack holders and users. Block producers are financially compensated for their computational power, token holders act as nodes. They own the network bandwidth, they store the blockchain and they have an equivalent voting power. The network is consequently free for “simple” users (the bots or humans emitters of the transactions). However, users need to stack at least enough EOS to store the information related to their account. You can think of it as a lifetime membership whith a decreasing lockout over time (or a decreasing cost inside the EOS economical system).

To summarize, transactions are handled for free by the block producers that are rewarded thanks to the token supply inflation (depending on the computing load and less than 5% yearly). Storage and bandwidth are managed by the users/stackers that are rewarded thanks to the holding of tokens that makes the price to increase in value over time. The overall deflationist tendency of the token’s economy is an incentive for bandwidth consumption, which helps to deploy the network technically (competition, decentralization, …) and economically (costs optimization, store of value, …).

Because it is a Delegated PoS, stacks not only provide technical and economic advantages, they also provide “social” functions. Since the 21 block producers are the ones who have to reach a consensus to alter the network’s behavior (actions directed to specific accounts, alteration of contracts’ behavior, core modifications, …), they need to be individually authorized to take part in the consensus process. This is achieved thanks to the voting power of the stack holders.

TL;DR: The sooner you get the ERC20 tokens, the more you get and the more you can impact in what will most likely become a whole decentralized society. So this is not only about becoming rich, it is in great part the opportunity to be involved in something greater than what blockchain used to be until now.

At the time I am writing those lines, EOS project is quite on fire. There is a live testnet that will soon be available in its 3.0 version, the former CEO of Bithumb joined the project, TomorrowVentures and Mike Novogratz joined the VC program, some ICOs are already on the rails,  interest and price are jointly increasing while only 25% of the total supply is now available for distribution and Weiss Ratings gave EOS a B mark (see [Note] below).

[Note] – Weiss Rating is a traditional notation agency which rates opportunities mainly depending on the corresponding assets’ sustainability. They consider that EOS is a BUY and that this asset is “[p]robably stable even in an adverse business or economic environment“.

Logo is a Chestahedron

Yes, it is a nerdy heptahedron (7 sided polygon).

 


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