Understanding EOS

Understanding EOS

Over the last few weeks there has been a lot of discussion generated by the EOS white-paper. Some have gone so far as to describe EOS as the Ethereum Killer. That might seem a bit premature given that EOS today still only exists as a concept. But what is that concept?

Two Blockchain Consumption Models: Ethereum and Steemit

Before we discuss what EOS is – as it currently stands as a concept, that is – it is probably worth covering very quickly what are arguably the two dominant reference models for Blockchain technologies today – Ethereum and Steemit.

Now, of course, Bitcoin was the original Blockchain technology. But Bitcoin is simply a currency – a store of value, according to the jargon – and nothing more than that. However, it did open a Pandora’s Box – the Blockchain concept.

One way of describing the Blockchain is to see it as nothing other than the idea of a peer-to-peer, trust-less platform that guarantees the integrity of its data through consensus. No-one is in charge, no-one can hack its data and everyone can participate.

Ethereum, however, was an extension to the Bitcoin basic blockchain model – they added the concept of programmability. Now, you had a Blockchain technology which could platform smart contracts. The possibilities seemed endless.

There was, however, a catch. It requires a relatively sophisticated level of technical ability to learn how to work with the Ethereum platform in order to leverage it for the kind of solutions that you want to build for your business.

Any serious Ethereum developer needs to download and manage at least one full copy of the Ethereum test network in order to be able to do some eventual work on the proof-of-concept aspects of his or her solution.

They need to learn how to interface with the Ethereum network from their local Ethereum node, they may need to learn how to mine on the test network to gather up some Ethereum with which to run their tests, and they will need to learn how to enact and manage transactions and smart contracts, along with the programming language that drives them.

And to do all this, they will also need to get familiar with the various scripting languages and APIs.  And this is before they even begin to develop the application itself.

In other words, Ethereum has a high entry-level barrier.

Alternatively, there are platforms like Steemit. This is the polar opposite of Ethereum. Participants on Steemit need not be aware of the underlying Blockchain technologies which drive it.

Whilst Steemit might itself appear to be a standard website with standard content, it does however have back-end components that leverage the Blockchain technology which also underpins its currency.

Steemit, though limited in terms of what users can do with it, does nonetheless give users the ability to platform blogs and other content whilst, at the same time, providing the ability for content creators to generate an income. It has a very simple buy-in process – you sign up, you create content, and if it works out, you’ll start making money. Very little thought needs to be given to anything else.

The EOS Proposition

The EOS project, then, wants to offer the flexibility of Ethereum to provide Blockchain-based solutions but in a way that does so with a low-barrier entry such as we see users experiencing with Steemit. In other words, they are looking to implement a tool for decentralised application development that is akin to what WordPress achieved for web development.

The idea is that the EOS platform should become something of a hybrid between an operating system and a SDK (Software Development Kit) where developers are provided with a ready-made Blockchain network which proposes a set of tools for managing user accounts, application databases and other add-ons which provide out-of-the-box functionality which allows developers to get on with the business at hand – building the application itself.

The EOS ICO

That, then, in an ICO Examiner nutshell, is the EOS project. The EOS ICO is currently on-going and has been programmed to take place over the course of a year.

The ICO model is itself somewhat unorthodox – on any given day, a fixed amount of EOS tokens are released for sale. The amount of tokens you receive, however, will be calculated as a percentage of the amount of funds that have been committed to the sale on the day in question. That also means, you may notice, that there is no hard-cap on the funds being raised.

Dan Larimer
Dan Larimer

Why EOS have decided upon this model is not entirely clear. What is clear, however, is that it is a project that is being brought to fruition by Dan Larimer who has a few successful Blockchain start-ups under his belt – including Bitshares and Steemit. That, ordinarily, should be reassuring. Where the Larimer connection may fall down, however, is in his apparent inability to stick with any project over the long-term.

Why Larimer cannot, for example, explicitly state that EOS will leverage and expand upon the Steemit platform is not clear either, given that he has a vested interest in the long-term success of the Steem blockchain itself.

The Ethereum Killer?

Whilst we think the project is an interesting one, we are still sceptical about common claims that EOS could prove to be the Ethereum killer. We make that observation for one simple reason – Ethereum is a successful platform that is still evolving. And we cannot see why any reason why the developers behind Ethereum cannot themselves on-board the concepts that EOS is seeking to introduce.

That said, EOS, like the Steem network, looks set to be geared towards a DPoS (Delegated Proof of Stake) consensus mechanism – which gives it a massive advantage over Ethereum in terms of Block creation times.

In this Brave New World of Blockchain competition, however, there is continual disruption which makes it impossible for anyone to be able to call with any certainty the successes of the future. We do think, however, given the Larimer connection that EOS will be up there, but we also believe that Ethereum is going nowhere any time soon.

You can check out the EOS white-paper here.