EOS Digital Currency (EOS) is a proprietary EOSIO blockchain token. This token is for making payments to run some apps on the EOS network. What impresses EOS is its potential to increase scalability. The network was created in June 2018 by Block.one and is co-founded by Dan Larimer and Brandan Bloomer.
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The coins themselves were launched in June 2017. Larimer, the creator of the blockchain, was known for helping Bitshares and Steemit before the project began. He is also one of the people who helped develop the concept of delegated Proof of Stake.
What is EOS?
EOS is a platform designed to build decentralized applications. This decentralized platform enables the use of smart contracts and DApps, which makes this digital currency a competitor to Ethereum. The blockchain operating system was released on January 31, 2018 and has ranked 13th on CoinMarketCap for more than a few years.
EOS Digital Currency aims to improve the user experience and business. While the project seeks to create more security and less discord for consumers, it also seeks to open up flexibility and adaptation for companies.
EOS claims to be the strongest infrastructure for decentralized applications. EOS is basically a blockchain technology that is exactly like Ethereum. They plan to create their own proprietary blockchain with a long list of impressive features. Some even consider EOS to be the main killer of Ethereum. However, with all this EOS excitement, a lot of pessimism comes from the digital currency community.
In fact, EOS has big apps. This software will act as a decentralized operating system. Developers can then build applications on EOS software. The most notable feature of this digital currency is its horizontal scalability, which means that the EOS blockchain is capable of running smart contracts in parallel and processing transactions simultaneously.
EOS is part of the stake proof algorithm, or PoS, developed by co-founder Dan Larimer. This system is less focused or uses much less energy and is extremely fast. In addition, there will be no commission on the EOS blockchain. It also sets them apart from the competition and can help them make the most of their operating system.
How does EOS work?
EOS management is based on its own consensus mechanism, in which 21 people are selected each day to validate transactions. The user community elects these 21 lawyers or deputies. This has several advantages:
The first one is that the validity is accountable for their actions, and if the community is not satisfied with their performance, it can withdraw its vote.
The second one is that having a small pool of validators takes very little time to verify transactions. In addition, any potential problems with having a small group of voters are eliminated by voting daily.
The supply of EOS digital currency is growing at about 5% per year, of which 1% is allocated to block validators at the end of the year. This reward is given to them for their efforts throughout the year to encourage them and thus be effective in maintaining their performance. With the help of EOS-specific consensus protocol, there is a high potential for scalability. No matter how large the network community is, the small number of daily selectors selected to validate blocks will keep transaction speeds high. Paying part of the EOS to the creditors of the blocks also eliminates the need for transaction fees.
The pros of EOS network
The followings are the advantages of this digital asset:
This network has the potential for almost unlimited scalability. This is because of the consensus mechanism that enables EOS to potentially have millions of transactions per second, regardless of network growth rate. This is because the pool or group of creditors stays small as the network grows.
The most popular decentralized applications
Decentralized applications built on the EOS blockchain are more popular, used, and traded than their competitor, Ethereum. This is partly because the ownership of the network is reserved for coin owners.
The EOS consensus mechanism allows the network to respond more quickly to problems such as the Dao attack on the Ethereum network. If the same thing happened to the EOS digital currency network, blockchain creditors could vote to freeze the app until the problem was resolved, allowing the network to run normally.
Decentralized EOS operating system
The fact that EOS is a decentralized operating system software allows token holders to own a portion of the network in proportion to their share of tokens. This eliminates the need for transaction fees that networks such as Ethereum need to be operational.
Disadvantages of EOS cryptocurrency
Undoubtedly, no project is complete. The EOS blockchain and the EOS cryptocurrency, like other digital currencies, have weaknesses that we will describe below:
Numerous EOS competitors
Like Ethereum, EOS has numerous competitors, including NEO, Rootstock RSK, and RChain. In addition, there is still room for other similar platforms to be launched with the EOS-like mechanism.
Support for unsupported tokens
Although the EOS user community is working hard to implement the blockchain so that holders of Ethereum-based EOS tokens can claim their tokens in the new chains, this is not legally required. As Block Datwan, as the EOS Implementing Agency, has not launched any blockchain for the project, it is the responsibility of the users to guarantee this.
The possibility of centralization in the EOS currency code
Some say that EOS is more centralized than other platforms, including Ethereum, because of its DPOS protocol. This is not a far-fetched concern, as EOS relies on only 21 blockchain manufacturers to approve all transactions; Because eventually several big data centers take over the EOS cryptocurrency network. Another issue that has led some to worry is that ordinary users will not be able to compute the EOS system; unless they become a complete or full node. Finally, EOS relies on voting, which in historically similar systems has seen a decline in participation over time, which in turn can lead to greater centralism and fewer people involved in determining the direction of the blockchain.
It is understood that Block Datwan claims that the EOS blockchain still enjoys a lower degree of centralism than Bitcoin and Ethereum; because in these two blockchains, a small number of mining pools are responsible for approving all network transactions.
Abuse of EOS
One of the unique features of Currency Password is that it allows users to send and receive transactions anonymously; Just like trading cash in the real world. However, some people resort to using currency codes to be able to use them anonymously to commit crimes. Crimes, including drug trafficking, weapons and stolen bank cards. For instance, in one case, bitcoin was used to pay for private assassinations.
Meanwhile, EOS is no exception to other currency codes. In addition, we must not forget that most blockchain databases such as Ethereum and Bitcoin are quite public. This means that anyone with an Internet connection can view all the transactions that took place on the blockchain, as well as the balance of all accounts.
However, according to Daniel Larimer, the former founder of EOS, while the address of the sender or recipient of transactions cannot be hidden from others, the entire balance of a user’s wallet can be hidden.
This feature can be very attractive for those who are looking for tax evasion; since they can hide their wealth from the tax authorities. Of course, the advantage of this feature is that it provides additional security for wealthy cryptocurrency holders. An important point to keep in mind is that all technologies can be misused, but only a small minority seeks to do so.
EOS has the potential to turn Blockchain technology into a mainstream technology with its high-speed transactions, user-friendly development tools and teamwork. However, the road to achieving this goal is a long one, and there is now strong resistance from activists in the cryptocurrency community and the blockchain against the EOS digital currency. However, if the Datwan Block Institute, as the EOS operator, proves that the blockchain, like its counterparts, is decentralized and offers many advantages over the traditional blockchain platform, it could become a major player in the subsequent evolution of the decentralized economy.