what is EOS?

Calling itself the most powerful infrastructure for decentralized applications, EOS is a blockchain-based decentralized system that enables the development, hosting, and implementation of commercial scale decentralized applications (dApps) on its platform.

There is no official complete form for EOS, and the maker decided not to formally set it himself. EOS supports all the core functionality needed to enable businesses and individuals to create blockchain-based applications in a manner similar to web-based applications, such as providing secure access and authentication, licensing, data hosting, usage management, and communication between dApps and the Internet.

This is also supported by the web-toolkit for interface development, making it a complete offer for application development without hassle. This basically works in a way similar to the Google Play Store and the Apple App Store.

EOS.IO and EOS Tokens
The EOS ecosystem consists of two main elements: EOS.IO and EOS tokens.

To draw parallel, EOS.IO is similar to a computer operating system - EOS.IO manages and controls the EOS blockchain network. EOS.IO uses a blockchain architecture built to allow vertical and horizontal scaling of decentralized applications. EOS tokens are crypto currencies from the EOS network.

Developers only need to hold an EOS coin, instead of spending it, to be eligible to use network resources and to build and run dApps. Token holders who do not run any applications can also allocate or rent their bandwidth to other participants who might need it.

Currently owned by the block.one organization, EOS was launched by Dan Larimer, who is also the founder and founder of established platforms such as Bitshares and Steem.

How is EOS Different?
Although there are already a number of blockchain-based networks such as Ethereum, which facilitate decentralized applications, EOS focuses on critical points of the blockchain and attempts to solve problems of speed, scalability and flexibility are often obstacles to the blockchain-based system. (For more information, see Introduction to Ethereum Classic.)

With the dApps ecosystem size increasing every day on certain blockchain networks, it often suffers from limited availability of resources on the network. They include problems such as networks that are limited by a large number of fake transactions and similar requests, spam applications, slow execution speeds, and limited computing power available throughout the network.

EOS.IO seeks to overcome this problem by offering more scalability, flexibility and usability through its unique mechanism.

It claims to be able to support thousands of commercial scale apps without pressing performance barriers through the use of parallel execution and asynchronous communication methodologies across the network. Efficiency is increasingly enhanced by separating various modules involved in dApps work. For example, the authentication process is carried out separately from the execution process.

EOS.IO offers flexibility in the development and maintenance of dApps through various features. Its ownership structure promotes free use by users, and eliminates transaction costs because developers are allowed to use resources in proportion to their ownership rather than the standard pay-per-transaction model. It also makes it easy for application developers to estimate hosting costs, and allows them to create effective monetization strategies.

EOS.IO uses a delegated and role-based proof of ownership concept, which allows flexibility to make instant high-level decisions, such as rollback, freezing and bug fixes from damaged applications, through majority agreements among designated stakeholders.

It comes with major usability features - web tools for interface development, self-describing interfaces, self-describing database schemes, and declarative permission schemes - which make the work of developers easy to create and maintain applications.

EOS economy based on Democratic Inflation
EOS arrangements do not have the concept of mining. Conversely, there are only block producers that produce the number of blocks needed and get rewarded with making new EOS tokens for each new block they produce. Block producers have the freedom to publish the desired number for expected wages, and the number of tokens made is calculated based on the median value of the expected salary issued by all block producers.

Because block manufacturers clearly want higher pay, this feature can be easily misused. To overcome this problem, there is a mechanism to limit producer awards so that the total annual increase in supply of tokens will not exceed 5%. Sign holders, who are voters in such matters, have the authority to choose block producers who demand more inflation, if deemed necessary.

This mechanism acts as a complement to EOS storage, because all token holders will pay for file storage on the EOS network through a portion of annual inflation. As long as they store files on the network, their EOS tokens will be held back, and will lose value at the inflation rate.

The more storage is needed, the more blocks will be asked from block makers who can demand more value for their work through higher salary inflation that can be approved by token holders. In terms of decreasing storage demand, inflation will be lower, leading to a smaller decrease in the loss of the value of EOS tokens.

Unique Year-Token Distribution
EOS takes a new approach to the ICO period for one year. In accordance with EOSCollective.org, the distribution of EOS tokens is carried out as follows with the aim of distributing tokens to all ecosystems at realistic market prices without providing undue benefits to selected people during the short ICO period:

  • 200 million (20%) tokens were initially distributed over a five-day period from June 26 2016 to July 1, 2017.
  • 700 million (70%) tokens are currently distributed on a continuous basis of 2 million per day for 350 days.
  • 100 million (10%) are held in escrow for one block to keep their incentives in line with the EOS community. The Block.one Token will be granted for a period of 10 years at 10 million tokens per year.
  • EOS tokens can be stored in several wallets including Ethereum Wallet, MyEtherWallet, and MetaMask, and can be traded on exchanges such as Bitfinex and YoBit.

The potential of EOS seems to be very large because it aims to overcome the problems associated with standard blockchain-based networks. However, this is still a conceptual initiative that may or may not produce the expected fruit.

Claims that dare to process 100,000 transactions per second are still questioned by many supporters of the blockchain world. The requirement to hold EOS tokens to be eligible to send transactions makes participants vulnerable to volatility. Many things are worth watching in the near future because the EOS ecosystem is formed.

Investing in cryptocurrency and other Early Coin ("ICO") Offers is very risky and speculative, and this article is not a recommendation from Investopedia or the author to invest in other cryptocurrency or ICO. Because each individual's situation is unique, qualified professionals must always be consulted before making financial decisions. Investopedia makes no representations or guarantees regarding the accuracy or timeliness of the information contained herein.
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