EOS has become one of the most talked about cryptocurrencies of 2018. Created by the same founder of Steem, EOS has the potential to provide much faster processing speeds than other digital coins. It is based on the Ethereum blockchain, prompting some to claim EOS is an acronym for Ethereum on Steroids. It has a common set of rules that are attached to every block, and, like other cryptocurrencies, the source code is available for developers who want to create their own applications.
The History of EOS
Dan Larrimer is the creator of the EOS token and platform. It is based on the Ethereum blockchain and incorporates many of the same features. Larrimer is best known as the creator of Steem and the Steemit platform. In many ways, EOS and Steem a much alike. They have similar reward systems, a built-in level of inflation, and scalability.
EOS is essentially a decentralized operating system. This allows developers to create their own applications within the platform’s blockchain framework. When one owns EOS tokens, they also establish a claim on server resources. What this means is that only those who own tokens can become active developers within the platform. It seems like a complicated method to manage the blockchain but the founders maintain that it is a more efficient way.
Developers are allowed to create user-friendly applications, and this is one of the primary ways in which EOS was built to differ from Ethereum. The other is in transaction speed. EOS uses something known as horizontal scaling which is able to process millions of transactions in a single second. The apps created on the EOS platform will benefit from this speed which is a vast improvement over Bitcoin and Ethereum.
EOS is also the very first digital currency to establish its own formal Constitution. The constitution sets forth rules that everyone can agree to follow and creates a sort of governance for the platform. Those who own tokens will be given voting rights to determine various aspects of how the platform is managed. This includes determining an inflation rate. It will likely be 5% annually. Unlike Steem, there are also a fixed number of EOS tokens that will be created. This number is set at one billion.
EOS tokens were not pre-mined for the purpose of an ICO. In fact, the coins are not mined at all. They are instead created in a fashion similar to that of Steem. The ICO for the coin has been set to last for one year. The developers are hopeful that a longer ICO will encourage more adoption and give more individuals the time and resources to become involved. 200,000,000 million of the tokens were distributed during a period between June 26, 2017 and July 1, 2017.
This coin does appear to face some challenges that may affect its success. For one, other platforms that are ultimately developed on the Ethereum blockchain may be easier and less expensive for developers to use. Other digital assets are already using Smart Contracts in the tradition of Ethereum and may be able to adopt a model that is similar to that of EOS in terms of processing speed.
It should also be noted that the involvement of Dan Larrimer could end once the platform gets on its feet. Larrimer is a talented developer that has done wonders with Steem, but he tends to move on from a project once it has been established. Losing Larrimer’s input could cause EOS to suffer. But, this is dependent on how many early adopters there will be for this new player in the digital coin market.
EOS is not a mined coin like Bitcoin or Ethereum. Instead, the process of distributing coins is a lot like it is with Steem. In Steem, miners are referred to as Witnesses. In EOS, they are referred to as Producers. Today, the trend in cryptocurrencies is to develop a POS or Proof of Stake platform in contrast to the POW or Proof of Work platforms that are used by the oldest digital tokens.
Mining cryptocurrencies has grown beyond the means of many cryptocurrency hobbyists. It requires specialized computer equipment that uses a lot of resources. Mining can require a substantial investment that might take years to recover. On the other hand, those that want to experience the thrill of mining coins can participate in a mining collective for much less money.
One such mining collective is Genesis Mining. Users purchase hash power in the form of a mining contract on a rig that is shared among multiple individuals. This contract allows them to reap the rewards of coins mined on Genesis Mining’s equipments. The company maintains secure mining farms in undisclosed locations around the world. Individuals are not responsible for paying the cost of upkeep on mining rigs and must only purchase a contract.
EOS Use and Acceptance
EOS is still a young token, so the opportunities to use it as a medium of exchange are limited. This can be expected to change as more people accept all cryptocurrencies as spendable resources. For the present, EOS can be used at certain websites which allow users to post items for sale like they would on EBay or Craigslist. These items can include clothing, collectibles, and artwork. There are even sites that which allow users to purchase Amazon gift cards with digital coins.
It is also possible to buy and hold EOS as an investment vehicle. This is done by using a cryptocurrency exchange. It is also possible to exchange EOS for other tokens like Bitcoin or Ethereum and then cash those tokens out for traditional currency.
EOS may provide new and exciting ways for individuals to incorporate blockchain technology into a wide variety of ventures. Its fast processing time could serve as an important model for future cryptocurrency platforms.