What is EOS and how does it work? Everything you need to know

What is EOS?

EOS is a decentralized blockchain network designed for building and running commercial-scale decentralized applications (dApps). It provides features like secure access, data hosting, usage management, and communication between dApps and the internet. EOS facilitates the development of dApps in a manner akin to traditional web applications, with some likening its operation to popular app stores like Google Play Store or Apple's App Store.

How does EOS work?

EOS is structured to emulate the functionality of a conventional computer, incorporating familiar computing principles in its software. It operates on three key types of resources:

• Bandwidth: Facilitates the transmission of data across the network.
• Computation (CPU): Provides the processing capacity required for dApp execution.
• State Storage (RAM): Stores blockchain data for immediate reference.

Functionality and EOS tokens

EOS holders can stake their tokens to engage in various processes. Staked EOS allows users to vote on software rule changes or participate in blockchain validation. Additionally, these tokens facilitate transactions on the EOS platform, which boasts support for up to 1 million transactions per second.

Who founded EOS?

Block.one, led by Dan Larimer and Brendan Blumer, founded the EOS protocol in 2017. Dan Larimer is renowned in the blockchain community for his prior creations, including the first decentralized cryptocurrency exchange, BitShares, and the initial crypto social media platform, Steemit. Currently serving as the Chief Technology Officer at Block.one, Larimer spearheads the development of EOS software.

The EOS project commenced with a year-long Initial Coin Offering (ICO) that commenced on June 26th, 2017. Block.one successfully sold 1 billion tokens during this period, generating a staggering $4 billion in revenue. This ICO event stands as one of the most significant in the cryptocurrency sector's history.

What sets EOS apart from other platforms?

EOS stands out in the cryptocurrency landscape due to several distinctive features:

• Scalability: Addressing the challenge of balancing decentralization and scalability, EOS leverages its Delegated Proof of Stake (DPoS) consensus mechanism to process approximately 1 million transactions per second. This high throughput is achieved through parallel processing.
• Flexibility: Unlike Ethereum, which faces vulnerability to DAO attacks, EOS offers a solution by halting the node processing such transactions until the issue is resolved, ensuring uninterrupted processing of new transactions.
• Decentralization: While Ethereum is often likened to a decentralized supercomputer, EOS functions more like a decentralized operating system, offering a unique approach to decentralization.

What contributes to the value of EOS?

EOS derives its value from its capacity to function as a platform for smart contracts and decentralized application (dApp) development, distinguishing it as a comprehensive solution within the cryptocurrency landscape.

Additionally, EOS's token economy and structure empower users to participate actively in the decision-making process, a characteristic highly valued within the blockchain community.

What is the Circulating Supply of EOS.io (EOS) Coins?

Currently, there are slightly over 950 million EOS tokens in circulation out of the total supply of 1,027,411,229 tokens available. It's important to note that there is no fixed limit to the number of tokens that can be minted, with new tokens entering circulation each time a new block is created. Additionally, the total supply of EOS tokens can increase by up to 5% annually.

In terms of historical data, EOS reached its all-time high (ATH) price of $22.89 on April 29, 2018. Unlike many other cryptocurrencies that reached their ATH levels in December 2017 or January 2018, EOS saw its peak in April 2018. This was attributed to its strong fundamentals, which supported its upward momentum. However, recent price trends indicate that EOS is currently experiencing a decline in its price.

How is the EOS network secured?

EOS.IO employs an active governance model alongside its Delegated Proof of Stake (DPoS) mechanism for transaction security. This approach allows users to vote on software rule changes by staking EOS tokens, with block producers responsible for implementing approved decisions. Both token holders and block producers can amend the "EOS Constitution," shaping network rules. However, this setup grants significant power to block producers, including the ability to freeze accounts, a feature intended to enhance security but potentially open to abuse.

How can EOS be utilized?

Certainly, the main utility of EOS involves staking within its Delegated Proof of Stake (DPoS) system and engaging in network governance.

Moreover, EOS can serve as both a speculative investment vehicle and a medium of exchange, depending on market conditions, given its swift and feeless transactions. Nonetheless, EOS adoption for dApps remains relatively limited compared to other cryptocurrencies.

How to select an EOS wallet?

The choice of an EOS.io (EOS) wallet depends on your storage needs and usage preferences.

For utmost security, consider hardware wallets like Ledger or Trezor, offering offline storage and backup. Although they entail a learning curve and higher costs, they're ideal for storing significant EOS amounts, especially for experienced users.

Software wallets, available as smartphone or desktop apps, offer a free and user-friendly option. They can be custodial, managed by the service provider, or non-custodial, utilizing secure elements on your device. While less secure than hardware wallets, they're suitable for smaller EOS amounts or beginners.

Online wallets, accessed via web browsers, are free and easy but considered less secure. Choose reputable platforms with strong security measures, like Kriptomat, for holding smaller EOS amounts or frequent trading.

Kriptomat provides a secure storage solution for EOS tokens, allowing both storage and trading with enterprise-grade security and user-friendly features. Buying, selling, or exchanging EOS is quick and seamless on our platform, ensuring hassle-free EOS management.

Delegated Proof of Stake (DPoS) mechanism for EOS staking

Securing its transactions, EOS employs a mechanism known as Delegated Proof of Stake (DPoS). DPoS relies on a voting and reputation system in real-time to determine the block creator on its blockchain. Token holders, including EOS owners, can participate in network operation, with greater token ownership increasing the likelihood of block creation. Users can lock (stake) their tokens, with each locked token representing a vote in the network.

In conclusion, EOS stands out as a promising platform within the cryptocurrency sector, offering the potential for instant, fee-free payments and supporting decentralized applications (dApps) with similar transaction benefits. Though some analysts express concerns about the security implications of its voting system, others see EOS as an undervalued and exceptionally innovative platform, often dubbed as the "Ethereum killer."