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What is EOS?

What is EOS

EOS is a cryptocurrency used on the EOSIO blockchain – a blockchain designed as a platform for dApps. That platform aims to make the development of decentralized apps as easy as possible. In this way, the organization behind it hopes to speed up adoption among developers.

The EOSIO network is still fairly new: the platform was only launched in mid-2018. One billion EOS tokens were distributed at the time to promote the project. That has worked quite nicely, because EOS has been one of the 25 largest cryptocurrencies by market capital for a long time. That is quite striking, because other large and well-known projects such as Ethereum and Cardano also have a dApp network.

EOS was very strategically developed and put on the map in crypto land during the ICO craze of 2017. That process was masterminded by a company called Block.one. The founders of that company are two bright American entrepreneurs named Brendan Blumer and Daniel Larimer. With the ICO for their project, they raised no less than 4 billion (!) dollars in a year in 2018. That monster yield is still a record in the crypto world. What makes EOS so special?

Tip: Below you will find a video that explains what EOS is.

The technique

In mid-2018, the founders launched the EOSIO platform for the development of dApps. To handle hundreds of dApps simultaneously, along with their combined transaction volume, a network needs to be highly scalable.

The developers kept that in mind when developing the transaction validation algorithm.

The network runs on a delegated proof-of-stake (dPoS) consensus model. That means that, just like with proof-of-stake (PoS), it comes down to how many tokens you own. The more EOS tokens you own, the more weight your vote counts when validating transactions. The difference with a ‘classic’ PoS model is that with dPoS it goes through larger nodes, which have the ultimate voting rights.

The network uses a voting process that is ‘asynchronously byzantine fault tolerant’. A mouth full of long words, but the bottom line is that there is always a search for a two-thirds majority within smaller groups of nodes. Subsequently, a general consensus is again found between the agreed groups.

The great thing about the EOSIO blockchain is that all this happens in fractions of a second. For example, where the Bitcoin network generates a new block every 10 minutes, it happens twice per second on the EOSIO chain. With such lightning fast block times, transactions can be sent very quickly and for free.

Free? Yes and no: you do not pay direct costs for transactions with EOS, but you do pay indirectly. New tokens are created periodically to cover the costs of all transactions over the past period. Of course, that causes inflation, which makes everyone’s EOS worth a little bit less. Quite an interesting model!

Who is the creator of EOS?

It was already discussed: EOS was conceived and developed by Block.one, a company founded by two American entrepreneurs: business man Brendan Blumer, and software code fanatic Daniel Larimer. The two are a kind of natural opposites of each other, but together they managed to set up the most lucrative ICO ever. How exactly?

Blumer is the corporate face of the company and is CEO at Block.one to this day. He was only 31 when he put EOSIO on the map in the midst of the storm of the bull run in 2017. Yet he was already an accomplished entrepreneur by then, as Blumer started his first successful business (also online) when he was just a teenager.

For EOSIO he needed specific technical knowledge. It was found in the person of Daniel Larimer. He, in turn, was already quite successful as an entrepreneur, having co-founded BitShares in 2013 – the very first decentralized crypto exchange. Nice detail: his associate for BitShares was Charles Hoskinson, founder of Cardano and co-designer of Ethereum.

Despite the fact that many of the tokens were sold during the ICO, the founders still kept a small part. At EOS’s highest price point to date (in early 2018), Blumer’s net worth was estimated at at least $600 million dollars. Not crazy. Larimer, of course, received a similar share and so he too must have made a lot of money with EOSIO.

By the way, at the beginning of 2021 he announced that he was going to leave his position, so who knows, Larimer may have already cashed out part of it.

The USP of EOS

The purpose for transactions on the network can be broken down into two main things. First, it must keep transaction costs negligible to enable microtransactions. In addition, the intention is that the network will eventually be able to process millions of transactions per second, in order to run countless dApps. In a previous section, we discussed the inventive consensus model that EOSIO uses to accomplish these two things.

As a dApp platform, the great advantage of the EOSIO network is of course that developers can develop their own application on it. In that corner of the blockchain world, of course, there is a lot of formidable competition. Think of Ethereum, which is currently dozens of times larger, and Cardano, which made a tremendous sprint in 2021 in terms of market capital and transaction volumes.

Still, there is much to be said for EOS’s proposition as a cryptocurrency. It can be used for free transactions on a mainnet that can verify countless transactions per second. If you want to develop a future-proof dApp with low fee costs, EOSIO might be worth considering.

Where can you buy EOS?

EOS is for sale at almost all large and small exchanges and crypto brokers. That is the easiest way to get tokens, because once you can’t mine them due to the dPoS setup. Once you own EOS, you can stake them in many places for a modest staking reward. It’s a nice bonus if you don’t actively trade them, because that way your number of EOS tokens will grow a bit.

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