What is EOS Blockchain – Key Features of EOS

EOS stands for Electro-Optical System and is a popular open source blockchain based platform which can be used to host, develop and manage dApps (Decentralised Apps). The cryptocurrency that derives the network is called EOS. It is made with the aim to make blockchain technology more accessible and easier to use for developers around the world.

Why EOS?

1. Fast and efficient: The EOS blockchain platform boasts super high transaction speeds at low cost.

2. Highly Configurable: EOS allows a higher degree of configurability, very useful for the creation and management of programmable architectures.

3. Secure: The EOS blockchain is designed to accommodate compliance and regulatory frameworks with a wide range of permissions

4. Developer-focused: The blockchain is built such that technically inexperienced users could also scale projects on EOSIO with help from experts.

Team that created EOS

In June 2018, the EOS platform was launched by the Blockchain-based software company Block.One by Dan Larimer (who is also the founder and creator of established platforms including Bitshares and Steem) after the initial coin offering raised $4.1billion in cryptocurrency.

The EOS tokens can be used as a payment system on the network. This platform was largely hailed as the ‘Ethereum Killer’ because its initial launch seemed like EOS would takeover Ethereum and become the most efficient platform for dApp development.

Understanding EOS

EOS is designed in a way that it allows businesses and individuals to create blockchain-oriented applications as easily as web-based applications. It provides hassle-free app development with secure authentication, data-hosting and communication between dApps and the internet.

EOS ecosystem

It is composed of two major elements :

1. EOS.IO Software: It can be compared to the Operating System of a computer. This software manages the EOS blockchain network and is responsible for scaling DApps.

2. EOS token: This is the official cryptocurrency of the EOS network. Developers do not necessarily have to spend the EOS coins to use network resources, if they own them they still can use the resources to build and manage DApps. They can also rent their bandwidth to other participants if needed.

EOS Governance

EOS governance relies on delegated Proof of Stake, its is a type of Proof of Stake where the token holders elect the validators on the network instead of choosing them randomly. Also, the network is managed by 21 block producers who stake their investment in the network infrastructure, development, etc.

How EOS Is Different

EOS gained a lot of traction because of its promises of being bigger, better and faster than Ethereum. While talking about speed Ethereum can handle 15 transactions a second, but EOS is aiming for millions of transactions per second!

This is a lucrative promise that can be a game-changer when implemented because the increasing size of the DApps ecosystem against the limited resources available today is a huge issue. EOS.IO attempts to solve these problems by offering more scalability and usability through its unique architecture.

Characteristics of EOS.IO

The parallel execution and asynchronous communication methodology across the network enables EOS.IO to support thousands of commercial-scale DApps without experiencing performance bottlenecks.

The efficiency is further boosted by separate modules that are involved in the working of DApps.For instance, the authentication process is separate from the execution process.

With EOS, you can develop interfaces directly from the web-based toolkit, build self-describing interfaces, build self-describing database schemas, and define declarative permissions.

Economy of EOS

Unlike BItcoin, EOS does not rely on mining to get new coins. Here, block producers generate more blocks and are rewarded with EOS tokens in exchange. In fact, block producers can publish the desired amount for payment.

To prevent misuse of the feature, the mechanism has a limit towards producer award tokens such that the annual hike in token supply cannot exceed 5%. So, token holders who vote on the matter, hold the authority to stop block producers who demand more.

EOS tokens can be kept in multiple wallets and can be traded on a number of cryptocurrency exchanges. However, their block-producing mechanism is centralized, which does seem contradictory to the general idea of decentralization around blockchain. As a result of which, they have attracted a lot of criticism.

What Is the Purpose of EOS?

The EOS platform was made to support dApps (decentralised applications that work on blockchain technology) on a commercial scale. EOS provides the needed functionality for businesses to create blockchain applications in an easier and more accessible way.

Case Study: OmniOne

OmniOne built a decentralized identity solution that uses EOSIO to associate multiple public keys with a single account and a Proof of Authority model, to increase confidence in authentication.

Solutions Overview:

1. Portable Verification

Issuers serving as certification authorities can be requested for verification that help prove identity.

2. Designed for Adoption

Built for adoption by financial organisations, medical facilities, government entities, or educational institutions.

3. Privacy

Users have control over when and where their credentials can be used, and who can access them.

4. Reduced Risk

Blockchain reduces the risk of doing business for service providers.

Key success factors for a dApp platform

The following list comprises the key success factors for any dApp:

1. Support for Large User Base

The dApp platform must be scalable for seamless commercial use

2. Free Usage

The dApp must cost nothing for end users, any transaction fee would discourage the market.

3. Low Latency

The dApp should run with the lowest possible latency to provide a good user experience.

4. Parallel and Sequential Performance

A dApp should offer parallel processing to distribute the workload and save time. To prevent errors like double-spending, the dApp should also allow for multiple sequential executions.

Features of EOS Blockchain

1. Scalability

Scalability, which is basically the measure of the number of transactions executed per second, is quite a significant concern for most blockchain platforms, as blockchain transactions require each node in the network to come to a consensus for anything to pass through. This negatively impacts the user experience.For example, while Paypal manages 193 transactions per second. In contrast, Bitcoin only works 3-4 transactions per second. But, with their distributed proof of stake (DPOS) mechanism, EOS claims to be able to process millions of transactions per second.

2. Permission Schema

With EOS’ comprehensive permission system, you can define custom permissions for a range of business situations.For example, you can develop a custom permission to protect a specific feature of an EOS smart contract.

3. Upgradability

All the dApps deployed on the EOS blockchain platform are upgradeable. It means users can be allowed to deploy code fixes, add/change features and change application logic. Furthermore, developers can update their applications without becoming permanently tied to a bug.

4. Less energy consumption

EOS is a less energy-intensive platform compared to others, due to DPOS.

5. Governance

Each transaction in EOS requires the hash of the constitution attached to the signature, which essentially binds the users to the constitution.

6. Decentralized Operating System

EOS is a decentralized operating system that allows it to offer a vast array of business-friendly and user-friendly features.

Accounts and Wallets in EOS

In the EOS infrastructure, the EOS wallet is like a store of public-private key pairs needed to authorize actions on the blockchain.

EOS follows a different structure for accounts in comparison to other cryptocurrencies. An account in EOS is like an on-chain identifier with access permissions. It can be owned by several people depending on the permissions. However, there is no inherent relationship between accounts and wallets.

Determining the Cost to Build a dApp on EOS

The cost of developing a dApp on EOS invariably depends on three main factors – resource Type, resource usage, and resource allocation. The types of resources an account consume among RAM, Network or CPU grossly influences the cost. Depending on the usage of a resource and its allocation the cost to build a dApp on EOS varies.

EOS dApps Use Cases

The blockchain community has adopted EOS enthusiastically. Numerous applications have already been built on the platform. Let’s discuss some:

1. Ubuntu Energy Ledger

Ubuntu Energy Ledger is built on the EOS blockchain and is a clean energy marketplace.By 2030, the application aims to provide Africa with cost-effective renewable energy and power 4 billion households.

2. All_ebt Food Stamps

All_ebt issues an EBT virtual card built on the EOS blockchain platform, which aims to help low-income communities solve problems around financial inclusion and access to healthy food.

3. DACTROIT

Codenamed ‘DACTROIT’, is a decentralised autonomous community (DAC) that enables communities with the tools to own and operate a complementary currency and high-speed internet access.

Future Scope of EOS

EOS seems to have some potential in the future, but it is still quite early to say. It has come up with some very bold claims and the technology needed for their implementation may detract users.

EOS in the News

1. Governance Issues

EOS lacks an effective governance process. In June 2019, Brock Pierce, an early member of the Block. One team, suggested that EOS is now governed by a “Chinese oligarchy.” Although it is true that a majority of the block producers are based in China, the concern has more to do with the risks that centralization poses. There is a major complaint about the current block producers: they do not build new DApps that will attract other users to the blockchain.

2. Bullish Global

In May 2021, the EOS price climbed 50% after the news that Block.one had created a subsidiary called Bullish Global. (The price fell just as sharply toward the end of the month.)4 Bullish Global intends to create a new blockchain-based cryptocurrency exchange.

EOS Crypto FAQs

Q1. What Does EOS mean?

EOS stands for Electro-Optical System. It is a decentralised operating system based on blockchain technology.

Q2. What Is the objective of EOS?

The EOS system was designed to support dApps, on a commercial scale and provide core functionality for businesses to build blockchain applications in a way that is similar to building web apps.

Conclusion

In this article, we learnt what EOS is, understood its ecosystem and discussed EOS governance. We also learnt how EOS is different and what is its purpose.