Last Updated on: 3rd February 2021, 02:27 pm
EOS.IO is a blockchain protocol powered by its native token, EOS.
In practice, this means providing blockchain developers with a set of necessary tools and services to build and scale decentralized applications.
The network’s first whitepaper came out in 2017 and the team ran a year-long ICO securing more than $4 billion in investment. It is one of the largest crowdfunding events in crypto history, with EOSIO now holding one of the largest market caps of all blockchain systems.
The protocol emulates most of the attributes of a real computer including hardware (CPU(s) & GPU(s) for processing, local/RAM memory, hard-disk storage) with the computing resources distributed equally among EOS cryptocurrency holders.
EOSIO operates as a smart contract platform and decentralized operating system intended for the deployment of industrial-scale decentralized applications through a decentralized autonomous corporation model.
The smart contract platform claims to eliminate transaction fees and also conduct millions of transactions per second. EOS is software that introduces a blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications.
The EOS software provides accounts, authentication, databases, asynchronous communication, and the scheduling of applications across multiple CPU cores and/or clusters.
How does EOS work?
It aims to build a decentralized blockchain that can process transactions super fast and free of charge as well as support smart contracts.
EOS strives to function as an operating system by providing out-of-the-box services like cloud storage, user authentication, and server hosting. This is supposed to make the development of dApps incredibly simple and streamlined.
To use the EOS blockchain and resources, developers must hold EOS tokens they don’t need to actually pay to use EOS, they just have to hold some coins to get access to it.
In some regards, EOS is similar to Ethereum. They both are capable of hosting dApps that are built using smart contracts.
But one of the main differences is that EOS is being built to process thousands of transactions per second while Ethereum is able to process a measly 15 transactions per second.
EOS makes this possible because it adds an extra layer on top of Ethereum, solving the scalability issues. However, this also means that EOS’s market value is permanently tied to Ethereum.
What are the key benefits of EOS?
- Scalability: As mentioned already, EOS is being designed for the development of industrial-scale dApps. It’s much more scalable and user-friendly (comes with a web toolkit for interface development and self-describing interfaces) than what can be achieved with current blockchains.
- Free for everyone: The platform aims to enable developers to create dApps that are free to access for blockchain users, opening up the platform’s benefits to everyone.
- Utility token: The native token EOS is a utility token, meaning that it gives holders both the bandwidth and storage on the blockchain, which is proportionate to the entire stake (e.g., holding 1% of EOS tokens permits the usage of up to 1% of the blockchain’s bandwidth).
- Solves gas issue: EOS combines high throughput of BitShares and Graphene with the amazing smart contract capabilities of Ethereum as well as solves the gas price issue. So, in short, it is free and faster and more scalable than any other Ethereum-based blockchain.
Why use EOS?
Many companies have migrated to the EOSIO network from Ethereum to solve the scalability issues.
As one of the many sidechain solutions being implemented on the Ethereum blockchain, EOSIO stands out as a well-rounded, out-of-the-box option.
EOS, the native utility token, is not mined but traded for resources, such as bandwidth and storage, and used to pay transaction fees. That’s why all transactions on EOSIO are free.
While the EOS ICO has given the network a celebrity-like status, the project has received its fair share of criticism, some skeptics have even called the software’s “blockchain” status into question (EOS supporters have come back with a strong answer, though).
Vincent Nyagaka is a Professional Trader, Analyst & Author. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Check out Vincent’s Professional Trading Course here.