EOS - THE OPERATING SYSTEM FOR DECENTRALIZED APPLICATIONS
EOS is intended to combine the best of both projects.
Dan Larimer first presented the EOS project at Consensus 2017 in New York in May 2017.
The project (EOS.IO software) was developed by Block.one, although the development team was not responsible for the operation of the blockchain (mainnet) itself.
Instead, the operation is taken over by so-called block producers, of which there are 21 (100 for backup).
These block producers validate transactions in half a second, and other machines on the network verify the results.
If a block producer behaves incorrectly, the network automatically selects a new block producer and the incorrect block is overwritten.
Problems that EOS wants to solve
EOS aims to provide a smart contract* platform that is hugely scalable and cost-effective.
This means that on the one hand transactions are free for users (developers pay the fees), on the other hand transactions should be confirmed every 2 seconds.
EOS achieves this through its consensus Delegated Proof of Stake (dPOS) algorithm* and its 21 block producers.
This means that coin owners choose so-called delegates or block producers who validate transactions on the EOS Blockchain.
Lay people can think of this as being like parliament, where voters appoint delegates to represent their interests.
Block producers can produce as many blocks as they receive votes.
If a block producer does not behave as desired, he can be voted out by the community at any time. Block producers are paid by the EOS system (costs: $121 million annually) through the issuance of new coins (inflation).
Token economy in EOS
Developers need to keep in mind that every decentralized application (dApp) on EOS also consumes resources (bandwidth, processing power, storage) because all messages and account transactions are stored on the EOS Blockchain.
Block producers always keep a copy of all messages and files stored on the EOS Blockchain.
Block producers also publish their available resources (bandwidth, memory, computing power) that can be used by developers in relation to the number of tokens that have to be parked (staked) in a contract.
This means for EOS investors:
The more dApps running on the EOS blockchain and the more resources (bandwidth, storage, etc.) they require, the higher the demand for EOS Coins.
What is the function of the EOS Coin?
For example, if a developer has 5% of the EOS tokens, he has the right to 5% of the computing power, 5% of the storage space and 5% of the bandwidth. In addition, EOS token holders have voting rights and can vote for block producers (governance).
Important functions of the EOS Blockchain
With EOS Storage, EOS also offers a decentralized file system, whereby files are stored permanently.
In order to save files, the user must deposit EOS tokens, which are later refunded in full.
Block producers hold this data on the blockchain for EOS token holders.
Contents cannot be changed without also changing the name of the file.
To fix content such as broken apps (change code, etc.) or freeze accounts, 15 of the 21 block producers must agree.
In addition, lost passwords can be recovered on the EOS Blockchain (password recovery). Furthermore, EOS has a function (Named Accounts), whereby confusing strings can be replaced by account names.
Each account can then have different rights. The smart contract function also allows ICOs to be carried out via the EOS Blockchain. In addition, EOS can run apps in parallel.
Due to the high scalability and enormous funds (several billion US $) available for the expansion of the ecosystem, EOS can develop into a leading smart contract platform.
Developers need to hold EOS tokens to reserve resources - this can quickly become expensive depending on the resources needed. This could discourage developers.