What Is EOS? – ZebPay
As an affiliate, we may earn from qualifying purchases. We get commissions for purchases made through links on this website.
Receive $10 in Bitcoin when you buy or sell $100 or more on Coinbase! https://mathisenmarketing.com/coinbase
We are all familiar with crypto tokens like Bitcoin which are used for transactions. However, some other tokens are part of the entire blockchain platform. EOSIO is one of these platforms with a broader purpose. Launched in 2018, EOSIO is a decentralized, blockchain-based platform for developing, hosting and maintaining dApps. EOSIO is the platform that enables development, while EOS is its original token.
How does EOS work?
The platform allows developers to create dApps similar to web applications. It mimics the features of a physical computer. The software then uses these concepts to regulate network traffic.
Features such as bandwidth, computing power and memory are used. Since applications require these to run, developers need to purchase more of these resources using EOS. This allows users to enjoy the app effortlessly without paying for events. Instead, developers must purchase additional network resources to enable transactions.
EOS does not use proof of work like Bitcoin in its block confirmation. They understand that proof of work can be slow and inefficient, preventing the dApp from running smoothly. Instead, they use a system called Delegated Proof of Stake (DPoS). Under this system, every EOS holder gets the right to vote. They use these rights to elect representatives to validate new blocks and add them to the blockchain.
Validation rewards are also determined by the community. “Block producers” or selected validators publish the number of tokens they expect to receive from adding new blocks. The reward is then decided based on the median value reported by all block producers. In order to prevent abuse of the system, the total increase in block fees must not exceed 5% per year.
Advantages and disadvantages of EOS
Advantages of EOS
Zero Transaction fee
EOS transactions do not reduce your account balance. The platform has no transaction or gas fees, which allows dApps to function seamlessly.
EOS stake is used to send all transactions on the EOS network. These staked tokens allow access to some of the network’s resources. The more resources you have, the more events you can send.
As a developer, you want your dApp to always be running. EOSIO allows you to develop and expand your application for as many users as you need. Since the network resources available to you depend on your staked tokens, you can always stake more EOS to get more bandwidth.
The platform also offers more transactions per second than many other popular crypto platforms.
Block producers have the power to freeze EOS dApps and accounts. Any error in a dApp installed on blockchains can have ramifications for the entire network. It can even allow hackers to steal funds online. EOS prevents this by freezing the faulty dApps until the issue is resolved.
The concept of EOS accounts and wallets
Accounts and wallets can be different in EOS. The EOS network account is linked to public and private keys. Multiple people can manage these accounts depending on the permissions granted. It has two permissions, owner and active.
Active access rights are used for daily operations on the blockchain. They allow you to transfer funds and vote on online decisions. On the other hand, the rights of the owner determine who is considered the owner of the account. Someone with owner rights can do all the active permission tasks, but they have additional functions like changing the owner or active permissions.
Read more: What is Blockchain Layers?
Wallets are used to store the public and private keys needed to access your account. There is no link between your account and your wallet except for the keys stored in it.
Is EOS a good investment?
EOS has grown in popularity over the past few years. It provides great development tools to create fast and scalable seamless dApps. EOS also allows you to create unique solutions to problems such as logistics and social impact.
Many have been suspicious of the platform because of its governance procedure. Some new policies seek to address those concerns. However, centralization and cooperation are threats to the system even today.
Only when these glaring concerns are addressed can EOS be a great investment opportunity. There are some big caveats to investing in the token right now, and it’s up to you to decide how much you value diversification on the platform.
EOS is currently trading at $1.54 per token and has a market capitalization of $1.53 billion. It reached an all-time high of $22.89 in April 2018.