Tag: DPoS

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Cryptocurrencies

What’s EOS? A Beginner’s Guide

The first (Bitcoin) and second (Ethereum) generation blockchains each brought groundbreaking innovations in the blockchain space. Bitcoin pioneered the concept of blockchain and cryptocurrency – completely changing the face of finance. Ethereum took the idea of blockchain and expanded it to include smart contracts and decentralized applications. 

The first (Bitcoin) and second (Ethereum) generation blockchains each brought groundbreaking innovations in the blockchain space. Bitcoin pioneered the concept of blockchain and cryptocurrency – completely changing the face of finance. Ethereum took the idea of blockchain and expanded it to include smart contracts and decentralized applications. 

The first (Bitcoin) and second (Ethereum) generation blockchains each brought groundbreaking innovations in the blockchain space. Bitcoin pioneered the concept of blockchain and cryptocurrency – completely changing the face of finance. Ethereum took the idea of blockchain and expanded it to include smart contracts and decentralized applications. 

But even with those contributions, the two blockchains somehow couldn’t hack the test of scalability. Both Bitcoin and Ethereum’s transactions per second (at 7 and 15 respectively) pale in comparison with real-world systems that can handle millions of daily active users. 

EOS, a blockchain project by Chinese company Block.One wants to solve these problems. It aims at supporting thousands of transactions per second, as well as providing a free interactive environment for developers from all over the world to experiment with and create decentralized applications. Ambitious goals notwithstanding, EOS has not made it unscathed by a controversy or two.

Let’s dig into what EOS is all about.

Understanding EOS

EOS is a blockchain and cryptocurrency project that supports the creation of decentralized applications (DApps). The EOS team also wants to solve some of the problems burdening blockchains such as low transaction speeds and complexity of use that would lock out many developers. The EOS platform claims to support 1000+ transactions per second. For these reasons, it has been dubbed the ‘Ethereum Killer.’

EOS is the brainchild of Dan Larimer, a well-known figure in the crypto space and creator of successful blockchain platforms, Steemit and BitShares. EOS is known as just that: EOS. There doesn’t exist a full form of the name, and neither have the creators offered any. 

Block.one, the company behind EOS, raised a record-setting $4.1 billion in a year-long initial coin offering (ICO) that ran up until July 2017. This represents the biggest ICO to ever happen in the blockchain space to date. 

EOS’s Approach to Blockchain Applications

EOS believes in and seeks to achieve these requirements for blockchain: 

#1. Support Millions of Users 

If blockchain applications are to compete with businesses such as eBay, Amazon, Uber, and Facebook, blockchain tech would need to support tens of millions of users at any time. 

#2. Free Usage

If blockchain is to realize greater adoption, it needs to be free for users. Developers and businesses using the platform can then explore and implement other monetization strategies. 

#3. Flexibility and Bug Recovery

A blockchain platform should be flexible to allow businesses to upgrade their applications if and when needed. The platform should also be able to identify and root out bugs when they occur.

#4. Low Latency

Blockchain applications should relay high volumes of data with minimal delay (latency). Low latency would ideally be near real-time access to data. Anything less would frustrate users and render blockchain uncompetitive against legacy systems.

#5. Support Sequential Performance

Not all applications can be implemented with parallel algorithms. Applications like, let’s say, crypto exchanges require sufficient sequential performance to deal with high volumes. 

How Does EOS Work?

EOS’s product is essentially like that of Ethereum – offering a conducive environment for developers to create DApps. But EOS wants to focus on the most critical problems currently facing blockchain, such as high latency, scalability, flexibility, that have held back blockchain from achieving its full potential.

EOS endeavors to address these issues by supporting more scalability, flexibility, and ease of use. The developing team claims the network can support thousands of industrial-scale DApps without suffering performance bottlenecks by the use of sequential performance and “asynchronous communication” of data. 

Additionally, EOS achieves scalability by employing certain features. First, it’s ownership model promotes free usage for clients, and significantly reduces or eliminates transaction fees. Developers can also utilize various on-platform resources based on their stake in EOS. This means app developers are in a better position to predict their hosting costs, as well as design the best monetization strategies for their respective products. 

EOS: Delegated Proof of Stake (DPoS)

Dan Larimer conceptualized the delegated proof-of-stake of consensus mechanism. In DPoS, network delegates vote for a few representatives, who are then tasked with securing the network. These chosen delegates will also oversee the generation and verification of new blocks as well as their addiction to the blockchain.

In the context of EOS, 21 delegates (supernodes) are chosen from a pool of potential block producer candidates. Block producers are rewarded for their role in maintaining and securing the network. Rewards are granted on a per-block-basis and the block rewards system bankrolled by a 1% annual token inflation. 

Controversies Surrounding EOS

EOS has not been without a few controversies. It all started with the year-long ICO that raked in $4.1 billion. Some members of the community felt this was irresponsible, greedy, and shady. 

There have also been concerns that its delegated proof-of-stake consensus mechanism, in which there are only 21 producers, is too centralized. Blockchain testing company Whiteblock has also come out to say that the project is not genuinely censorship-resistant, saying “the foundation of the EOS system is built on a flawed model that is not truly decentralized.” 

The EOS network was also rigged with bug after bug, especially leading up to the main net release. This was very bewildering for many people who couldn’t fathom how this was possible with all that money collected. This led to the company establishing a bug bounty system that rewarded benevolent hackers who identified bugs in the system. Even after the project went live, bugs were still reported.

EOS.IO and EOS Tokens

The EOS network houses two tokens: EOS and EOS.IO. The role of EOS.IO is to manage functions in the ecosystem. It facilitates the vertical and horizontal scaling on the network. 

The EOS token allows developers to purchase a stake and obtain access to various natural processes to create and run DApps. Token holders who are not running DApps can rent their bandwidth to others who need it. And lastly, the EOS token can be used as a speculative investment and is available for purchase/trading on various exchanges. 

Economics of EOS

An inflation rate of 1% of EOS is used as block producer rewards. The inflation rate was adjusted from 5% in February 2020. As of Jul 25, 2020, EOS’s per-token value is $2.62, and it has a market cap of 2.4 billion, which makes it the 12th biggest cryptocurrency in the world. EOS’s 24-hour volume is $1, 294, 563, 760, its circulating supply is 934, 603, 711, and its total supply is 1, 021, 303, 722. EOS’s all-time high was $22.89 (Apr 29, 2018), while its all-time low was $. 0.480196 (Oct 23, 2017). 

Buying and Storing EOS

You can purchase EOS from a variety of exchanges, including Binance, OKEx, Huobi, HitBTC, DigiFinex, Bitrue, ConBene, Gate.io, Upbit, LATOKEN, and BitMex.

As for which wallets support EOS, you have several great options such as Ledger Nano, Guarda Wallet, Atomic Wallet, Trezor, Jaxx Liberty, and Infinito.

Final Thoughts

EOS proposes a brave new world of free blockchain transactions. If it can indeed support a TPS of 1000+, it will be a far cry from the single and double-digit TPS offered by Bitcoin and Ethereum, respectively. Could this combination of capabilities bury Ethereum? That remains to be seen.

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Crypto Guides

Consensus & Its Importance In Any Existing Cryptocurrency

Introduction
In most of our previous articles, we have discussed a lot of topics regarding cryptocurrencies. We now know the properties of cryptos, advantages, and their fundamental purpose. In this

Introduction
In most of our previous articles, we have discussed a lot of topics regarding cryptocurrencies. We now know the properties of cryptos, advantages, and their fundamental purpose. In this

Introduction

In most of our previous articles, we have discussed a lot of topics regarding cryptocurrencies. We now know the properties of cryptos, advantages, and their fundamental purpose. In this article, let’s discuss the concept of consensus and why it is essential for the existence of any cryptocurrency.

The consensus algorithm plays a vital role in validating the transactions of any crypto network. One of the crucial reasons for the success of cryptos is its ability to handle the problem of double-spending adequately. And this also an important reason for the failure of digital currencies before Bitcoin; they weren’t able to solve the problem of double-spending. So let’s see what this problem is about.

Double Spending

Double spending is a fraud where the same money is promised for two different transactions but is spent on making only one transaction in real. This is a significant problem for digital currencies because the entire system is decentralized, and there is no entity confirming the authenticity of the transactions. The cryptos after Bitcoin alleviate this problem by waiting for the confirmation of the payments. During this wait time (which is very minimal in general), the transactions are validated by the users present in the blockchain network using the ‘consensus’ algorithms.

The consensus here is nothing but a mutual agreement within all the partiers that are present in a cryptocurrency network. The majority of the validators must approve the transactions, and this is made possible by the consensus algorithm. Also, because of this protocol, a crypto network cannot be controlled by a single person or a group of people. Now, let’s look at two of the most important and equally reliable consensus mechanisms – Proof of Work & Proof of Stake.

Proof of Work (POW)

Proof of Work is used by Bitcoin blockchain. This consensus algorithm proposes a mathematical problem for the miners in the network. To solve this challenge, high power computing devices are used, and thereby a lot of electricity is consumed. The first one to solve the problem gets to validate the transactions and communicate the same to all the other miners in the network through gossip protocol. Then all the other miners verify the transactions and seal them in a block.

The crux here is this. To solve this challenge, the miner uses a considerable amount of power and hardware, which is a costly process. Hence, one would be honest enough to not validate faulty transactions as a lot of stake from the user side is already expended. This is how POW makes the miners be reliable and run the blockchain efficiently. They are rewarded with the in-house cryptos for doing this work. Though the POW consensus algorithm is the most efficient one out there, it is the costliest of all the consensus algorithms and not eco-friendly, which is the need of the hour.

Proof of Stake (POS)

In this consensus protocol, the participants who want to be the validators must stake some of the native cryptocurrency in a virtual safe for a specified period. The network randomly picks the validators based on certain methods. The two most used methods are ‘Randomized Block Selection’ and ‘Coin Age Selection.’ In Randomized block selection, the validator is chosen based on the highest stake and lowest hash value. While in the Coin Age Selection, the validators are picked based on the duration of the native currency staked in the virtual safe. Dash and Peer coin are examples of cryptos that use POS.

Why is POS more reliable than POW? 

POS algorithm uses considerably less energy compared to POW. Hence, the process is less expensive, and most importantly, it is eco-friendly. Also, the POS protocol fulfills the fundamental property of blockchain as it serves the purpose of complete decentralization. This is not the case in POW because currently, there are large mining pools who mine cryptos (Bitcoins, for example) and get the maximum reward. But that’s not possible in POS, making them truly decentralized.

Conclusion

Apart from these two, there are other major consensuses like Delegated Proof of Stake (DPOS), Proof of Burn (PoB), Proof of Elapsed Time (PoET), and Proof of Activity (PoA). These protocols are gaining momentum because of their efficiency and eco-friendly nature. However, a lot of research is still happening to develop more efficient and cost-effective consensuses. We hope you find this article worthful. Let us know if you have any questions in the comments below.

Categories
Crypto Guides

Knowing About the EOS Cryptocurrency & Its Blockchain

Introduction
EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping

Introduction
EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping

Introduction

EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping to develop industrial-scale applications.

The EOS blockchain platform was announced its white paper in 2017 by a private company called block.one. The platform came into the market as an open-source platform in June 2018. The EOS is informally called the ‘Ethereum Killer’ in the crypto community. That is because this platform offers almost all the features of the original Ethereum platform but with a lot of improvements. These improvements enable DApp developers to build industrial level applications with ease.

Objective

While there are many blockchain platforms in action now, we can say each one has its unique features suitable to different industries in the market. Each platform is developed to overcome the shortcomings of its predecessor. EOS platform has been introduced to improve functionalities offered by Bitcoin and Ethereum platforms. EOS whitepaper says it is possible to run 1000 transactions per second during the initial stages, and later it aims to run a million transactions per second. Thus enabling industrial level applications to be run on the platform without scaling issues. Moreover, the platform has made transaction fees-free, making people choose EOS over other cryptos.

Consensus

So how does the EOS work to hit a million transactions per second? EOS uses the Delegated Proof of Stake (DPoS) as its consensus algorithm. There will be only 21 block producing nodes in the network. These blocking producing nodes are chosen by the people in the network who hold EOS cryptocurrency on a voting process, which happens continuously. Thus, maintaining the integrity of the users in the system is of utmost importance to the block producing nodes. Hence the transaction should be validated by only these 21 nodes to get confirmed in a block, and it is a relatively straightforward process. The block producing nodes are rewarded with EOS for validating the nodes.

EOS ICO

To ensure the native currency of the platform (EOS) is widely available, a billion coins were sold on the Ethereum platform as ERC 20 tokens. The ICO was held for an entire year. 10% of these tokens are reserved for Block.one, the founding company. EOS raised a record amount of $4 billion in its ICO, although the working product wasn’t available in the market then.

Market Cap

EOS stands at seventh place in the crypto world with close to $3 Billion in value. The price of each coin is $3.25 as of 30/10/2019. The 24-hour trading volume is around $2.5 billion, with 938 Million coins circulating in the market.

Price History

EOS began trading with a price of $1.03 in July 2017. The coin didn’t get much attention for the first four months, and the price started slumping. By November 2017, it was trading at $1.21, and by January 2018, it is traded at $18.06. Then from a peak of $18.06, it fell to $4.08 by March 2019. It slowly increased and decreased from then without a very drastic change, and the price as on 30th October 2019 is $3.25.

Conclusion

There has been a lot of negative talk about EOS, but crypto enthusiasts see high potential in the EOS platform because of the promising features it offers. Applications can be written in any language on EOS, unlike the Ethereum platform, which allows only its native programming language, Solidity. Hence not only crypto enthusiasts but also industry experts believe that the EOS platform is revolutionary due to its scaling and flexibility options.