EOS – A look into a budding platform coin.

EOS – A look into a budding platform coin.

Introduction:

EOS is a looking to become a major platform for decentralized apps, like Ethereum and Carando. But EOS is looking to take out the major platform coins by tackling problems that Neo, Ethereum, and Cardano have yet to address. For this reason, many in the crypto-space are calling it the “Ethereum killer.” And Ethereum killer it very well might be, if the promises come true.

 

What is EOS:

EOS is a decentralized operating system. This means that developers can build applications on EOS. The EOS operating system offers built in databases, account permissions, scheduling, authentication, and internet applications – a sort of, all in one platform for the basic developer building blocks. Further, owning EOS coins is a claim on server resources. But, the developers do not need to spend their coins to operate on the blockchain, they just need to prove they hold them.

The applications use very common functions such as user/password, user interfaces, and backend database management. This means that the applications can share framework, libraries, and code to make development faster, more secure, and less technical.

This will hopefully make the end user not even aware that they are interacting with a blockchain enabled application – much like seemit.

The operating system will be hosted on servers. In return those server hosts – or people who put their computers online to host the servers for EOS – will be producing blocks to run the network. The block rewards in EOS are the incentive to host these servers and applications. There will be 21 block producing nodes ran by anyone who wishes to contribute – fairly decentralized.

21 sounds like a small number of nodes, right? Well yes and no. The block producers compete for votes from the community on who is the best block producer. The top 20 block producers are chosen to produce blocks based on total votes and the last one is chosen based on voting proportions. If one producer fails to produce blocks when chosen and has not produced blocks within the last 24 hours they are removed from consideration.

You might be thinking there will be a backlog of transactions if one block producer misses a block but that seems unlikely – for two reasons. First, block times are only 3 seconds. Second, only one block producer produces blocks at any given point in time. Then after 21 blocks it switches to another producer for 21 blocks. However, the EOS protocol has a design that if a block producer fails to produce for two blocks in a row, a new block producers is chosen. Even if we had to wait a full 21 block rotation that’s only 63 seconds.

But for now EOS claims to offers these distinct advantages over other Dapp platforms:

  • Supports millions of users – fast block times and “millions” of transactions.
  • Free usage
  • Easy to upgrade
  • Low latency
  • Sequential performance
  • Parallel performance – easy to upgrade and scale the network

If you are interested in learning more about the fundamental technology behind EOS – please read their white paper.

 

Team/Organization of the foundation/company:

The team backing EOS is the most important aspect of investing in a cryptocurrency. Without a solid team the coin is doomed for failure. Fortunately, the EOS team has some very solid members on the team. For one the founders of EOS is Dan Larimer.

Dan Larimer:

For those that don’t know Dan Larimer, Dan was the main programmer behind Steemit, and is the main programmer behind Bitshares and EOS. He has helped build lots of powerful projects in cryptocurrency world. Dan has been around in the crypto world since very early in the game – 2009. He started communicating with Satoshi Nakamoto on Bitcoin. And then later he opened Bitshares (a rather interesting crypto but that’s another article), then even later helped create Steem. Now his current project is EOS.

Brendan Blumer:

Another worthy mention from the EOS team is Brendan Blumer, Block.one’s CEO. Brendan started his experience with MMORPGs by selling virtual in-game currency. Later Brendan went to work for a Hong Kong based firm called Internet Gaming Industry and grow the companies account sales into a 5 million dollar division.

After two years at Internet Gaming Industry he started his own online account selling service called Accounts.net which quickly became the second largest gaming account trading platform on the internet.

In 2010, Brendan then went onto start another internet website called Okay.com. The website and its employees help to build real estate enterprise software for real agents around the world.

Then in January 2017, Brendan launched Block.one and it’s first product is going to be the EOS platform.

As we can see the two leaders of the EOS team are solid in technical background and have a wide range of experiences. However, one of the things I look at when researching a coin is the marketing team. And their marketing team – based on their linkedin page – is…. Interesting.  

Marketing team:  

Looking through block.one’s linkedin page I noticed that the only marketing member of their team is Abby Christine. Her background on linkedin is very scant. Not only does she have no job experience in the past with cryptocurrencies – she has no marketing experience at all. Her old job was being a secondary english teacher. However, she does have a two year gap between the school teacher job and working at Block.one. She could have gained marketing skills and a extensive knowledge on blockchain during her time between jobs – if so, good for her! But, frankly I’d like to see a marketing team with more experience in marketing than her.

Further info on Development team:

Then after looking at the marketing team I decided to take a further look into the development team – just to make sure. And I was very impressed with what I found, a solid development team. The director of user experience at block.one is John MacMenanmin. John was the front end designer for AIG and Waste Management. Then he has further experience in some smaller companies like SaleStaff LLC and AlteredStudio.

Next was Randy Torres and Eric Lles both are developers but Eric is the Lead DevOps Engineer. But first looking at Randy – he’s young, graduated from college in 2016. But he’s had two years of experience working as a developer in various positions. Then is Eric Lles, the lead DevOps engineer, he’s had a wide range of employment experiences too. He’s worked as a Full stack engineer and a team leader, then as a web developer and again as a developer. All of this is very good for a Lead DevOps engineer who will be tasked with combining various software programs/coding programs and turning it into a finish project.

I could do into further detail but I feel as that’s a good introduction to the EOS team. If you’re looking to do more research please check out their linkedin page. But enough about EOS’s team, which seems solid, onto the coin.

 

Supply/distribution and funding:

The very first thing that should be noted is EOS is a token, not a coin. You might be asking yourself “if it’s suppose to kill Ethereum and be a platform running Dapps, then why is it just a token?” That is due to the ICO launch. EOS had a massive ICO which lasts a year and ends July 3, 2018. The ICO was taking place on Ethereum’s platform for the initial sale.

Supply/Distribution:

There will be one billion EOS coins with 100 million owned by block.one.

The 900 million coins are distributed over 351 periods. Period #0 began at the end of june 2017 and lasted 5 days. Then periods #1-#350 are offered in consecutive periods of 23 hours over 335 days.

The coins are distributed as follows:

For period #0 – 200 million coins offered.

For periods #1-#350 – there are two million coins offered in each period.

The interesting thing with EOS distribution is it doesn’t reward people for donating more. In fact the more people donate to the EOS ico during a period the less everyone gets. This is because at the end of the period, the number of EOS coins offered is divided by the total number of Ethereums sent. That then yields the distribution for the period. So if two people send one ETH, they each get 1 million EOS coins. But if four people send 1 ETH, they all get 500,000 EOS. It’s a interesting system that encourages people to spend more ETH but also discourages sending too many ETHs in one period as the EOS per ETH gets lower as more is sent.

Now lets look at the wallet address distribution of EOS coins. We can check on the “rich list” of any ETH token by going to etherscan.io and here’s the rich list for EOS. EOS’s rich list looks fairly balanced considering other coins I’ve looked into. The top 5 addresses hold 39.94% of the distributed coins and the top 100 holders own 69.12% of the supply as of writing. Not awful but I’d like to see even more decentralization. Although, it’s expected that 10% is owned by the block.one team – which we can see clearly.

So while decentralized to an extent and better than most. It still could do with more decentralization.

Finally, funding. The EOS platform is very well funded. Looking at their wallet address for the ICO we see 227 million usd has been collected so far – and counting. Not to mention they also have 100 million EOS coins for funding of community projects. They should have no issue funding their company and projects for a very long time. (figures differ for how much they have raised – so I decided to just look only at their ICO address)

 

Pros and cons:

Pros:

  • To start with EOS has the potential to scale better and do transactions faster due to parallel processing of data. While they can also scale their system horizontally as well. This – in theory – should give a huge boost to their transaction speeds.
  • Further, EOS claims to have free transactions. The network will be free to transact on and it will be free to end users who use their Dapps – unlike some Ethereum Dapps.
  • Suppose to be easy to work with and code on their platform.

Cons:

  • One major con with EOS is it has not yet launched the product. The EOS coin is still a token under the Ethereum’s network. However, this hasn’t stopped investors from piling into EOS under little more than promises of a working product.
  • This is less about an EOS network issue and more a systemic issue for crypto. EOS controls 227 million in ETH. That amount could potentially destroy ETH’s value if a massive market order took place. For example: OKEx and Binance have the biggest volumes in the cryptospace for ETH/USDT at 147 million and 48 million or a combined daily volume of 195 million. Although, there’s been some question if that volume is faked or not. But regardless, Block.one could crash the markets with the type of money they control. But that’s NEVER been done before – right? NO. The january-march 2018 bear market was – in part – due to Mt.Gox’s trustees selling huge amounts of Bitcoin. So who knows. But it’s still a thought to consider when looking to invest.

 

Conclusion:

EOS seems to be on a path designed to overtake all the major Dapp platforms. It claims to have the scaling issues down, easy user interaction, easy for developers to use, quick speeds, and low latency. The team is very solid with Dan and Brendan heading the EOS team there is little to worry about there. The marketing team seems… lackluster at the moment but that may change. The development team looks like it’s solid especially with Dan backing them up. EOS’s token distribution is slightly more centralized than I’d like but in comparison to other top ten coins it’s much better. I think their ICO scheme is a very interesting and competitive in nature – much like their block producer competition.

The only downside is listed underneath above. The blockchain has yet to be released. But in fairness, the ICO isn’t even done yet. We won’t see if EOS can live up to its promises until it launches. Not to mention there might be some concern for ETH holders on how a competitor holding so many ETHs could impact the Ethereum blockchain. These are things that should be taken into account when looking at investing and diversifying into competition.

Overall, EOS looks very promising. I can’t really find anything I dislike about the coin, even though I want to – as I’m an Ethereum holder. It seems like they have thought out their plan for creating a superior blockchain. But, only time will tell who comes out on top – in the race of the platform blockchains.

 

Disclosure:

I try to be as unbiased as possible but my opinions are my own. Further, I do not own EOS and never have.

As always, do your own research and do not invest more than you can afford to lose. Best of luck.

featured picture comes from cryptodaily.co.uk

6 Replies to “EOS – A look into a budding platform coin.”

  1. Very good article, thanks for posting this, can tell you spent some time with this piece.

    So a couple of things if not mentioned if you don’t mind.
    The EOS crowdsale has raised 1.5B$+ thus far. As of late they are bringing in about 45k ETH per day.
    EOS/Block.one has dedicated 1B$ to the EOS VC fund. This is a fund to recruit companies that will build on the EOS blockchain. That is a lot of money. Some of the biggest VC firms do not fund more than 1 Billion Dollars per year. A couple of prominent VC’s also are investing in EOS for around 350M$. So there is about 1.3B$ total going back to the EOS ecosystem, which will benefit all the token holders.

    Some of the top addresses on the rich list are EOSfinex and other exchanges. Those tokens will be distributed. Some of the numbers I have heard is no one owns more than 4% of the total tokens.

    EOS will feature a free file sharing/storage protcol. Since it is free, I am not sure how projects like SIA and Filecoin will respond.

    Any ETH projects can be ported over to EOS in a week.

    EOS will feature inter blockchain communication .

    Some of the prominent applications that are being built on EOS is EOSfinex (decentralized exchange), Everipedia (an anti-censorship Wikpedia alternative). According to Dan Larimer, EOS will also feature a social media application, I imagine this will be like a new and improved version of Steemit.

  2. Have read many articles and they all mention the con that the product is not released yet which of course makes sense. Right now we are 75 days away from launching (https://eoscountdown.com/) In aprox 75 days EOS will be live and it will be so nice to get rid of this con!

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