EOS was the most hyped cryptocurrency in 2017 until somewhere in the early of 2018. It broke the record in the ICO (initial coin offering) space where EOS was able to raise over $4 billion USD in a long-year ICO.
For some time, EOS has been deemed as one of the biggest competitors to Ethereum. At the time this post was written, EOS was like the 8th largest cryptocurrency by market cap. This article will explore more of the EOS’ relevancy in the crypto space and what are their actual selling points.
Brief History Of EOS
In short, the EOS project was actually launched by a team that called itself Block.one. There are two most important people in the Block.one team. They are the Chief Executive Officer Brendon Blumer and the Chief Technology Officer Dan Larimer. Brendon Blumer was involved in various businesses such as the real estate business and MMORPG. Meanwhile, Dan Larimer was one of the most respected figures in the crypto space, because he was the one who co-founded STEEM and BitShares.
Not only that, but Dan was also the founder of the Delegated Proof of Stake (DPoS) consensus mechanism. If you look at most smart contract platforms that were launched in 2017 or above, many of them utilize DPoS or at least the combination of DPoS and another consensus algorithm.
EOS got hyped a lot prior to its Initial Coin Offering in 2017. And unlike other projects in the altcoin space, they chose to let the ICO open for one year. At the end of the day, they successfully raised $4 billion USD, and they sold 1 billion EOS tokens. After they announced their mainnet, they got a lot of dApp developers and community supporters that want to be part of the EOS family. According to dappradar.com, EOS remains one of the strongest Ethereum competitors.
Technological Features Of EOS
In terms of the end goal, EOS is more or less similar to Ethereum. It wants to be that decentralized platform where all kinds of dApps are being built on top of it. EOS understands it needs to have better technological advantages if it wants to be able to attract developers and users into the EOS ecosystem.
The main difference between EOS and Ethereum is within the consensus mechanism. EOS is utilizing Delegated Proof of Stake or DPoS where the confirmations in the blockchain are only maintained by a certain number of representatives. Specifically in EOS, there are only 21 block producers.
What does it mean? It means there are only 21 entities who will produce the new block and confirm transactions. With Ethereum’s Proof of Work, new individuals or entities can join and become the new miner.
These block producers in the EOS network are voted in by the community who want to “stake” their EOS tokens to vote for each representative. There are only 21 entities because EOS believes it can speed up the entire process in the blockchain. This consensus algorithm often invites criticism from both Bitcoin and Ethereum camps. They believe EOS is sacrificing a degree of decentralization because true decentralization requires hundreds or even thousands of entities confirming the same block (instead of just twenty-one entities).
However, Dan Larimer himself disagreed with this criticism. He said 21 block producers are already much more powerful than centralized data centers when only one corporation or entity can decide or manipulate every data record. Even though he agreed that EOS sacrifices a slight degree of decentralization, he claimed that it’s a must-have sacrifice in order to have a scalable and fast blockchain ecosystem.
According to EOS Network Monitor, the current stats on EOS says that EOS could achieve 3,996 transactions per second (TPS) on the mainnet itself. This is impressive considering Ethereum couldn’t even achieve 100 TPS in its mainnet.
Another interesting thing to point out about EOS technology is the idea of resource allocation. Developers who are interested in creating a dApp on top of EOS can get some resource loans (i.e., bandwidth or CPU resources). EOS token holders who have sufficient EOS tokens can allocate their bandwidth to these dApp developers and get rewarded for it.
When it comes to adoption, EOS is doing decently. It’s not doing bad at all because it’s one of the top 3 dApp platforms even though it still has a lot of work to do before they can overcome Ethereum. That being said, EOS had a $4 billion USD that they raised from ICO, and such financial prowess should be used more to attract dApp developers to their ecosystem.
Also, there isn’t much variation in the EOS’ dApp list. Ethereum has various different interesting ERC20 tokens in its ecosystems, such as MakerDAO, popular stablecoins, and others. Meanwhile, there isn’t much popularity when it comes to tokens that operate on top of the EOS blockchain.
Block.one itself is now trying to up their game by launching a new decentralized social media that they call Voice. The hope is that Voice will become mainstream and become a direct competitor to social media giant like Facebook. However, this won’t be an easy task, especially because Voice itself is taking a very long time to launch.
Criticisms and Controversies
While EOS has a big fan base but it also has received a lot of legit criticisms. Perhaps one of its biggest controversies was the early involvement of Brock Pierce. For your information, Brock Pierce is a well-known figure in the crypto space, and he was also a child actor where he appeared at Disney films such as The Mighty Ducks.
With the Block.one team, he was tasked as one of the early advisors. The controversy began when John Oliver, a famous late-night host show, accused Brock Pierce of being involved in a Hollywood pedophile ring scandal. The story became very famous in many mainstream media and Block.one team had no choice but to break all of its relationships with Brock himself. After the incident, people couldn’t find Brock’s name on EOS official website nor in EOS youtube videos.
Another criticism is regarding EOS’ enormous $4 billion dollar ICO. Most critics believe it made no sense how EOS actually needed $4 billion when other blockchain networks could achieve the same technology with much less funding in the first place. Block.one team also hasn’t shown any commitment to use a good amount of the funds for branding and marketing efforts. Some of the EOS biggest FUD-ers believe the $4 billion was only there to enrich the EOS developers.
Last but not least, Voice.com itself is not free from criticisms. Many people believe it’s just another recycled version of STEEM but built on top of EOS, considering Dan Larimer was the co-founder of STEEM. The fact that Voice.com is still in the development stage with no clear launch date has made a lot of people question the transparency in progress.
EOS is a great project, and it has more scalability and speed compared to Ethereum, although it had to sacrifice a certain degree of decentralization to do that. EOS is also doing decent when it comes to adoption, where there are a good amount of dApp developers that are still active building for EOS.
However, EOS mainnet has been live for quite some time, and it doesn’t look like they will be able to overcome Ethereum any time soon. It is interesting to see what they are going to do next in order to speed up adoption.