The crypto currency EOS

EOS Logo
EOS Logo

EOS was created in June 2017 and has managed to become one of the top 10 crypto-currencies within a short time. It took less than a year and EOS was among the Top 5. This is a remarkable rise that many other crypto currencies would also like to make. But what exactly is it about EOS and why is EOS so successful?

In simple terms, you could say that EOS is an improved version of Ethereum. As you can read in the article about Ethereum, Ethereum has some major drawbacks, such as scalability and the high costs of transactions. EOS wants to change these two points. EOS does not charge any fees for transactions. Yes, right, NO fees. Not only few fees, but none at all. Further the scalability should be given, it should be possible with EOS to carry out several thousand, even millions, transfers per second without any problems. These are the two big advantages that EOS has over Ethereum for the average user.

Of course, there are also some smaller technical advantages, but for most people these are irrelevant. One of them would be, for example, the possibility to reset the entire block chain to an old state in case of hacker attacks. But as I said before, this should not matter for the average user.

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Youtube-Video: EOS Explained in Under 3 Minutes

How exactly does EOS intend to achieve this?

EOS does without mining! At EOS new blocks are not created by mining, but by holding, also called HODL, coins. Everyone who has EOS coins in their wallet has a voting right. With this right you can vote for delegates. There are 21 delegates in total. They then confirm the transactions and ensure that the block chain is correct. If they act against the interests of EOS, they can be voted out at any time. This system has several advantages, for example it is much more effective and energy-saving than mining new blocks. Also the scalability is enormous, because there is no need for complex mining, the transactions are confirmed directly by the delegates.

The delegates are paid for their work and automatically receive EOS in return. By the way, there are 1 billion coins, most of which were distributed to make EOS accessible to everyone.

As with Ethereum, Smart Contracts are also possible with EOS, so one could negotiate contracts through EOS that are paid automatically on completion. One could, for example, agree car sharing via Smart Contract. As soon as a certain number of kilometers has been driven, the car automatically debits the agreed amount. Smart contracts thus protect both sides against fraud. Smart Contracts could also be used to amend contracts if certain conditions are met. Let's stay with the car as an example. If the accident insurance company works with a Smart Contract, the car could use a sensor to automatically transmit the speed driven. So if the driver often drives too fast, the risk of an accident naturally increases, which in turn increases the cost of accident insurance. But if the driver never drives too fast, the risk naturally decreases and so do the costs. All this must be agreed upon naturally on conclusion of the accident insurance on both sides.

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Advantages of EOS

As mentioned above, EOS offers a number of advantages such as free bank transfers, which are also carried out very quickly. Doing without mining is also a major advantage, as it is extremely environmentally friendly. The power consumption caused by mining crypto currencies is already enormous, so it is good that some currencies save resources and do without mining. Generally probably only one crypto currency will ever find world-wide acceptance, which can solve the problem with the current consumption. So EOS is on the right track here.

  • Fast transfers
  • Free bank transfers
  • No mining, so it saves resources
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Criticism of EOS

However, there are also some critics of beo EOS. The delegate system has to take the most criticism. It is basically a very good idea to use delegates to confirm transactions and to avoid mining, but there are also some disadvantages. Since there are only 21 delegates, they could theoretically coordinate and confirm fake transactions. That would of course be a complete disaster for EOS, even though it is unlikely.

But decentralization also suffers under the delegate system. Since there are only 21 delegates, the system is not necessarily decentralized. Everyone has the right to vote in the election of delegates, but not every vote is worth the same amount. Who has more coins, his vote counts more. Therefore the delegates have a lot of power. Also the merit of the delegates is enormous, so it would be quite conceivable that at some point fraud will occur. Since the delegates also get more and more Coins, their vote will also be worth more and more. So it could well happen that the delegates are never voted out of office, because they themselves have a large part of the voting rights.

In theory, anyone could be elected as a delegate, but then you have to be elected. And that is of course much more difficult. Without investing money here, you will probably not be elected. Thus the power remains with the present delegates and financial interests play a large role here. Since crypto-currencies actually want away from the past system, many people do not like this delegate system, it has nevertheless very strong similarity with the political system in a democracy. There, too, there is always corruption and abuse of power, which is why many experts in the crypto-currency field criticize EOS very harshly.

Disadvantages

  • The electoral system gives preference to people who are already delegates
  • Since there are only 21 delegates, the decentralization is not particularly large

Our conclusion on EOS

EOS is virtually Ethereum 2.0. EOS manages to eliminate some of the major disadvantages of Ethereum, but in doing so creates new disadvantages. EOS is not perfect and the system with the delegates is rightly criticized very strongly, but Ethereum's block chain with mining is far from perfect, too.

But just the possibility for smart contracts is, as it was under Ethereum, a great thing that has the potential to change a lot of things in the world. It remains to be seen, however, whether Smart Contracts with EOS, Ethereum or a completely different crypto currency will prevail. All crypto currencies have advantages and disadvantages, none of them is really perfect at the moment. We will probably have to wait until a crypto currency appears that will really prevail, but who knows, maybe EOS will also prevail against the competition.

Nobody can predict that, but it is in any case exciting to see how the different crypto currencies will develop. Therefore we from Adiceltic stay on the topic and continue to report to you about news from the area of crypto currencies and how you can earn money with it.

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