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EOS (EOS) 101 - Complete Guide

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Author: Benson Toti Updated: January 28, 2022

EOS.IO is a next-generation blockchain that can perform transactions fast and freely. EOS.IO is a delegated proof of stake consensus that is comparable to a decentralised tech-based democracy.

The recent success of cryptocurrencies has changed how we see the world and how we trade on the markets. Digital currencies have become so prominent in recent years that governments are beginning to take notice. We will be covering everything there is to know about EOS, from how it started to where it is expected to go. By the end of this article, you’re sure to have learned a lot more about this digital asset.

What Is EOS.IO and Why Was (EOS) Created?

EOS was officially launched in 2017 by Block.one. The Chief of Technology Officer of Block.one is the influential Daniel Larimer, who is responsible for the launching of both Bitshare and Steemit. 

Daniel Larimer is the lead architect behind the software for EOS.IO and is also known for developing the delegated proof of stake mechanism that EOSIO utilises in its blockchain. 

The EOS.IO blockchain brought in a record-breaking initial coin offering (ICO) of $4.1 billion in 2018 following the one-year-long ICO campaign and continues to receive media coverage because of this. EOS.IO is one of the leading open-source blockchains that has been making waves in the cryptocurrency sphere since its inception. This is in part due to its astounding blockchain capabilities. The blockchain for EOS can process millions of transactions every second. 

The EOS ecosystem primarily focuses on simplifying the programming and integration of smart contracts and developing decentralised applications. One of the most tangible aspects of the EOS platform is that it virtually eliminates transaction fees through its unique structuring.

How Does EOS Work?

When we look at the EOS ecosystem, we can see that it comprises two main elements. These elements are the EOS.IO and the EOS tokens. To understand how EOS.IO works, think of a platform akin to that of a computer’s operating system. EOS.IO controls the EOS blockchain network and uses blockchain architecture that has the primary purpose of enabling vertical and horizontal scaling of decentralised applications. With the EOS platform, smart contracts can be built with ease. 

EOS developers decided to utilise the proof of stake consensus mechanism instead of the proof of work system. The proof of stake validates the blockchain state differently - where miners do not compete with each other. This takes away the issues commonly associated with proof of work systems like scalability.

Those who wish to become validators of transactions must first acquire EOS tokens and stake them in their wallets. By staking your tokens, you are effectively holding your cryptocurrency in your wallet. The more ECO tokens you stake, the better your chances of being selected to approve the next block of transactions and with the reward in the form of network fees. 

‘Block Producers’ create new blocks on the EOS chain, and this process is similar to that of mining on Ethereum. Whoever produces the blocks are paid by the EOS blockchain, removing the user’s fees. With EOS, two blocks are created every second, and the inflation rate is built into the EOS token to help maintain the ecosystem. 

The EOS ecosystem has a fully-featured authentication system. Developers on the platform can program various user accounts and give each of these accounts a preset permission level directly from the EOS panel. This component is critical for dApp development and, as such, is one of the key features that are drawing attention to the EOS.IO platform and its native currency. 

A developer needs to have EOS coins to use the EOS network resources to build and run dApps. Should token holders not be running any apps, they can also opt to allocate or rent their bandwidth to other participants on the platform. The EOS tokens power the EOS blockchain; utility tokens that help access goods and services offered by projects.

Key 3 Selling Points of EOS.IO (EOS)

1

EOS Is Scalable

The EOS platform is much more scalable when compared to other cryptocurrency platforms. Many blockchains have slow transaction speeds because every node on their network has to come to a consensus. This is not the case for the EOS platform because of the DPOS consensus mechanism being utilised. With this mechanism, EOS is capable of millions of transactions in seconds. The platform is the perfect foundation for dApp developers.

2

The Platform Is Self-sustaining

One of the main benefits of this platform for traders and investors is that EOS is predominantly self-sufficient. The platform will continuously reward block producers for their work. This is done by EOS having a low inflation rate of around 5% every year. Additionally, the platform also aims to help with funding dApps, which is particularly attractive to developers and supports the platform to grow and continue sustaining itself.

3

User-Friendly Platform

The EOS.IO platform is one of the most user friendly in the entire crypto sphere. Those who want to establish dApps can use the web toolkit, database schemes, and other functions that the EOS makes readily available. Additionally, with the platform, you can easily fix and freeze broken applications. Everything from staking to development is explained in detail through educational resources available on the official website.

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Is EOS.IO Worth the Investment?

EOS.IO, alongside many other prominent cryptocurrencies like Bitcoin and Ethereum, is steadily gaining the attention of potential future investors and traders. The emergence of a global market is now more apparent than ever. 

With more and more people turning to online transactions, cryptocurrencies are becoming the digital currency of choice. Establishments need a secure and reliable way to transact their online business, and cryptocurrencies like EOS allow this to be a reality. Many find themselves questioning if they should invest in EOS while others have already taken the leap. 

The current speed and use cases for EOS did not happen overnight; it took time to reach its current value and potential for dApp development. EOS is a relatively stable and reliable cryptocurrency, but its value is still quite volatile in the short-term. In general, traders and investors who don’t know the ins and outs of cryptocurrencies could find themselves running into problems when trying to make a profit without doing the proper research. 

Judging by the current cryptocurrency trends, digital currencies are here to stay and will continue to grow and develop with more adoption. However, no one can tell you if an asset is worth the investment, and as such, you should practice caution when trading EOS and other digital currencies. Try to learn all that you can about the cryptocurrency you are interested in to make the best financial decision possible for yourself and your trading plan.

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Frequently Asked Questions

  1. Yes, EOS is the native cryptocurrency for the EOS.IO platform.
  2. No, EOS is not centralised; it is a decentralised blockchain.
  3. The EOS coin works similarly to other cryptocurrency coins, and you can send, hold, and receive funds between wallets, which makes it an excellent payment system. You can instantaneously send money anywhere in the world, relatively free of charge.
  4. EOS.IO has a goal whereby it wants to build a platform capable of processing millions of transactions in seconds.
  5. All signs are currently pointing towards EOS continuing from strength to strength with their long-term goals increasingly becoming attainable as technology progresses.
  6. EOS.IO is different as it solves one of the crypto worlds’ most significant issues, which is scalability. The EOS.IO platform is better at scalability when compared to its competitors and also has zero transaction fees.
  7. Yes, this self-directed account type was created by the United States government to hold alternative assets.
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