EOSIO is a decentralized blockchain infrastructure that emulates the attributes of computer hardware, including CPUs, RAM, and storage. The system is powered by the EOS coin, whose holders can access the distributed computing resources.
The primary aim of the EOSIO platform is the provision of decentralized application (DApp) hosting for industrial and enterprise scale operations, simplifying the development and production of DApps of all types.
What is EOS?
The EOS ecosystem comprises two key elements: the EOSIO platform, and EOS tokens. The tokens power the EOSIO platform, but more on these tokens in a moment.
EOSIO is a DApp development platform. (What is a DApp, anyway?) Developers, Block.one, envisage the free and open source EOSIO platform as the solution to common blockchain development issues such as speed, scalability, transaction price, and flexibility.
EOSIO can support thousands of industrial and enterprise scale DApps without hitting the same performance and network bottlenecks other popular blockchains already display, especially Ethereum and Bitcoin.
Although owned and developed by block.one, EOSIO and EOS were the brainchild of blockchain entrepreneur Daniel Larimer (co-founder of Steemit and BitShares, creator of the Delegated Proof of Stake Algorithm, now Block.one CTO) and Brendan Blumer, Block.one CEO.
How Does EOSIO Work?
EOSIO uses a few different blockchain technologies to stay ahead of the competition. Perhaps most notably is the use of the delegated proof of stake algorithm (DPOS).
Larimer first trialed DPOS at BitShares, and it was immediately one of the fastest blockchains around. Later, Larimer would introduce DPOS to the Steem blockchain. It is no surprise that Steem is considered one of the fastest and most stable blockchain projects of all, processing over one million transactions per day while only using one percent of its capacity. That’s right: one percent.
DPOS enables the EOSIO project to fulfill its goals by approaching transaction processing completely differently to Bitcoin, Ethereum, and other blockchains. Joe has explained blockchain consensus algorithms in detail, but here is a brief overview:
- Proof-of-Work: a Proof-of-Work (POW) model requires computers to “mine” cryptocurrency by solving complex mathematical problems and matching hashes. Solve a problem, receive a cryptocurrency reward. Bitcoin, Ethereum, and numerous other cryptocurrencies use POW consensus to process transactions. However, over time it has become clear that POW consensus isn’t efficient for network scaling, as well as the massive electricity consumption associated with the mining process.
- Proof-of-Stake: a Proof-of-Stake (POS) model requires node operators to “stake” their coins in an attempt to receive a block discovery reward. More coins mean more chance of receiving future rewards—but it isn’t the only factor. Staked coins and online wallets process transactions, but it removes the requirement for complex mathematical problems, ridiculous electricity overheads, and problems with pooled-mining (though Proof-of-Stake pools exist, much like mining pools).
- Delegated Proof–of-Stake: a Designated Proof-of-Stake (DPOS) model works more like a “technological democracy” in that every person buying into the model agrees to a certain set of rules that consistently regulate the blockchain. Furthermore, DPOS uses a reputation system and real-time voting to achieve consensus, with community members (holders of EOS tokens) voting for “super representatives” to validate transactions for the next block. By constantly shifting the representatives, there is less resource pooling, and transaction processing remains rapid even as network traffic increases. DPOS also allows stakeholders to vote out bad representatives, as well as make important blockchain-level decisions such as rolling back, freezing, and bug fixing extremely quickly.
Or, in the words of Ethereum co-founder Vitalik Buterin (as Ethereum looks to implement DPOS):
“Only DPOS BFT can efficiently scale to an unlimited number of validators”
EOSIO supports commercial and industrial scale DApps using parallel execution and asynchronous communication to continue scaling as new machines enter the network. The EOSIO platform also comes equipped with other important DApp development and usability features, such as a web toolkit, integrated user accounts with permission levels, self-describing interfaces, and self-describing databases.
DApps on the EOSIO network use three key resource types: CPU, NET, and RAM:
- CPU: CPU resources signify how long an action takes to process. When a DApp wants to execute an action on the blockchain, the time is measured in microseconds of CPU cycles.
- NET: NET refers to the network bandwidth the DApp uses as well as the overall network capacity of the entire EOSIO NET is measured in bytes.
To use CPU and NET, you stake EOS tokens. After your DApp consumes the CPU and NET resources, your EOS returns to your account. RAM, however, is different. You must pay to use EOSIO RAM.
- RAM: RAM refers to how the EOSIO network saves data. Saved data is kept in “RAM” to keep the network fast, while DApp developers can choose whether they will pay the RAM cost or the user.
EOS RAM doesn’t entirely correlate to the RAM in your computer, smartphone, or laptop. If a DApp doesn’t have enough RAM available, operations might not process, and smart contracts may fail. RAM has become the most expensive part of the EOS network. While not subject to rampant speculation like other cryptocurrencies, EOS RAM does have its own trading charts and is subject to price fluctuations based upon demand.
You can check the EOS RAM price right here.
The EOSIO Technical Whitepaper
DApp developers should head to the EOSIO Developers Portal. The Developers Portal contains more documentation specific to developing your DApp on the EOSIO platform, including libraries, wallets, APIs, and so on.
How Do You Buy EOS Coins?
Want to develop your DApp using the EOSIO platform? The platform itself is open source. But to use EOSIO network resources and run and publish your DApp, you need to hold EOS coins.
EOS price topped out at around $22 per coin during May 2018, higher than during bitcoin’s run to $20,000. At the time of writing, the price of one EOS is around $2.33, with a total market capitalization of $2,110,510,314. This ranks EOS 4th by market cap.
You can buy EOS at all major cryptocurrency exchanges, as well as a huge number of smaller exchanges, too. Furthermore, you can trade EOS in numerous different pairs, including Ethereum, Tether, US Dollars, Chinese Yuan, and Euros. In total, Coinmarketcap lists over 240 trading pairs on over 50 exchanges.
EOS total supply is 1,006,245,120. Block.one distributed EOS during a year-long ICO, with the development team holding onto around 100 million tokens.
However, you cannot mine more EOS. EOS doesn’t have a mining function.
Rather, there are block producers who generate new blocks based upon demand, receiving a reward for each block. Block producers can set the price of production, but the price and token increases are capped at 5% annually. Furthermore, EOS token holders can vote out abusive block producers.
What’s EOSIO’s Future Potential?
I strongly believe that EOSIO and EOS have a bright future in cryptocurrency. The experience of the Block.one development team and the existing network of over 100 DApps using EOSIO show that the platform does exactly as advertised.
Using a different consensus algorithm helps EOSIO, too. Instead of being swamped by slow transactions and high transaction processing fees, EOSIO offers the opposite. Those two aspects alone make it an attractive proposition for anyone considering building a DApp. As you can see from the Blocktivity chart below, EOS has the most activity while remaining a securely in the “green” capacity area.
One concern for EOSIO and developers is the price of RAM. If RAM is bought and sold like a regular commodity, there is a chance that it could become worth more than EOS tokens. Or if developers are holding large quantities of RAM for future projects, the price of RAM will, theoretically, rise. In fact, Dan Larimer has written about exactly this issue on his blog. It is an interesting EOS read.
One thing is for sure: EOSIO and EOS are here to stay.
Join the EOS Community
There’s no shortage of ways to dip your toes with EOSIO and EOS. The EOS community is welcoming, and there are numerous groups out there. One thing I really like about the EOSIO project is the tutorials that teach you how to use the platform. Some involve making your own EOS-based game—I’ve included a link below!
- Official Block.one Facebook page
- Official Block.one Twitter account
- Subreddit for EOS: The Blockchain
- Subreddit for EOS developers
- Block.one GitHub page
- Official EOS Telegram group
- EOSGO Community Forum
- Elemental Battles—Learn about EOSIO, building DApps, and blockchain games!
- EOS Apps
Go ahead and start exploring the EOSIO platform. There’s a lot out there!
If you would like to continue reading about exciting Bitcoin and Ethereum alternatives, why not give Dan’s Coin Study of privacy-focused Monero a read?