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What Is EOS? Introduction To The EOS Token

EOS stands for... wait.. they say "we have decided not to formally define it ourselves."

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What Is EOS?

EOS is a blockchain network and platform for decentralized applications built on Ethereum. It performs many of the same functions, but with much greater capacity — up to millions of transactions per second. EOS stands for Ethereum Operating System – unofficially. The EOS cryptocurrency token sale raised $4 billion over a year-long ICO. 

Ethereum was the first blockchain to support development of decentralized applications. It sounds great in theory, but it was plagued by scalability issues once released into the wild. EOSIO is colloquially known as the “Ethereum Operating System,” because it adds a layer on top of Ethereum to make this dream of a dApp community a reality.

Bitshares and Steemit creator Dan Larimer created EOS through a private Cayman Islands-based company called block.one as one of the first Ethereum dApps. It was created as a sidechain solution competing with solutions such as the Raiden Network or Lightning Network. The roadmap is aggressive, with the team planning apps for computer resource sharing, like CPU and RAM (a la Golem, another Ethereum-based dApp), decentralized P2P cloud storage (like Siacoin), and more.

Of course, running on top of Ethereum means the EOS market value remains tied to Ethereum’s. Can this symbiotic model succeed in tomorrow’s blockchain-based economy?

Before exploring this question, let’s look at how the EOS token is performing on the cryptocurrency market.


EOS Crypto Market Performance

EOSIO currently has a market cap of $4,899,514,004 as of October 22, 2018. This is based on a circulating supply of 906,245,118 EOS (out of a total supply of 1,006,245,120) and an exchange rate of $5.37. The highest price so far was $21.46 on April 28, 2018.

The EOS ICO is the most successful of all time, as of this writing, raising over $4.1 billion between June 2017 and June 2018. During this period, 1,000,000,000 EOS was distributed as follows:

20% – distributed between June 26 and July 1, 2017

70% – distributed between July 2017 and June 2018

10% – withheld by block.one

EOS is a utility token based on the ERC-20 Ethereum protocol. As such, it’s supported by wallets and exchanges that support ERC-20 tokens. It’s also easily exchanged OTC for ETH.

Wallets that support EOS include Infinito Wallet (mobile), SimplEOS Wallet (desktop), and Scatter Wallet (web).

The EOS token can’t be mined, and it does not have “any rights, uses, purpose, attributes, functionalities, or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.”

Of course, we know that’s bullshit, because EOS is used by dApps as a staking mechanism. The amount of resources allocated to a dApp are proportionate to the EOS staked, but a user account can operate the dApp without spending EOS.

As an ERC-20 token, it also inherits a delegated Proof-of-Stake consensus.

EOS is accepted on a variety of cryptocurrency exchange markets, including DOBI trade, Bithumb, IDAX, Binance, Bitfinex, HitBTC, and Huobi. Over $370 million is traded on a daily basis, and trading pairs include BTC, USDT, and ETH.


An Aside About Sidechains

When Ethereum first introduced the world to the idea of a blockchain-based network, it sounded revolutionary, and it was. The problem the Ethereum network ran into when released from the test environment into the real world was scalability. As the ledger grew, it bottlenecked processing, and sidechain solutions developed from this.

The concept of sidechains is to allow developers to process transactions offchain, only adding to the general public ledger as needed. Sidechain capability is also what helps different blockchains interact with each other.

In this sense, what’s being built in the blockchain sectors is an interconnected web of blockchains. This isn’t much different than the distributed cloud-based model the world is already deeply entrenched in. In fact, this interconnected web is the basis of the Internet itself.

The difference in this new blockchain-based interweb is the “original” internet as we know it was built built at a time when home computers weren’t mainstream, and wireless devices didn’t even exist. This new web is simply a more efficient way to do what we’re already doing, and new players like the Ethereum Foundation, block.one, and OnChain are becoming new players in the tech, business, and financial world because they created technology to fuel the next generation of the Internet.

Control over which platform makes money has always been an issue. Look at your mobile phone – if you wanted to download a game on your phone in 2003, you bought it from your carrier (AT&T, Sprint, etc). Now you purchase it from your phone’s operating system developer (Apple App Store, Google Play Store, Amazon, etc) or even the phone manufacturer (Samsung, Google, Apple).

On the blockchain, Ethereum is racing against developers on its own platform who are creating their own ecosystems. Many only use the Ethereum network as a betanet launchpad, creating a proprietary blockchain and cryptocurrency protocol for the mainnet release.

EOSIO doesn’t even need to move off the Ethereum network because it supports its own blockchain ecosystem. The mainnet (which was released June 1, 2018) can simply be developed to support other sidechain solutions like NEO.

This is one of the reasons EOS and ETH are often viewed as competing cryptos.


Block.one Is Forging EOS Partnerships

I mention partnerships a lot because it’s important. Even the best-built blockchain is moot if it’s a ghost town with no development or users. We know block.one has development chops in Larimer and strong community development from engineers like Kevin Heifner. The smart contract network is solid, and ICOs, air drops, and STOs are ready for launch.

One of the bigger partnerships EOS secured so far is with Everipedia. This blockchain-based wiki encyclopedia is designed to get information through government firewalls around the world and ensure educational reference material is available equally to everyone around the world, regardless of citizenship, financial means, or social status.

EOSBet is one of many gambling apps developed on EOSIO to compete with Ethereum-based Augur. The dApp began on Ethereum and ported to EOS to avoid bottleneck issues, a bad sign for Ethereum.

These are just two of many dApps being developed in this thriving ecosystem. The development support and partnerships being forged today will feed the EOS Platform for years to come.

The network is expected to handle upwards of 6000 transactions per second too. Slow transaction processing times plague early cryptocurrencies like BTC and ETH. This means these applications can run simultaneously with no lag, so long as they have enough EOS to stake the resources. And while the EOS economy sounds great in theory, it’s already been tested in practice (check out our story on RAM).


EOS Introduction Summary

EOSIO is one of many sidechain solutions being implemented in blockchain. This one launched on Ethereum, providing another overlay to facilitate offchain development. EOS is viewed by many as a rival of Ethereum, although the two networks have a symbiotic relationship that foreshadows the future of blockchain.

  • EOS is an ERC-20 token that is traded for resources as opposed to mined and used to pay transaction fees. There are no transaction fees on EOSIO.
  • EOSIO was developed by block.one, headed by Ethereum/Steemit blockchain development vet Dan Larimer.
  • The EOS Platform has a strong development community and many projects migrated to the EOS mainnet from Ethereum after experiencing scalability issues.

 

The author is not invested in any digital currency mentioned here.

 

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