How Does EOS Work in cryptocurrencies

Since its initial launch in January 2018 , EOS has made headlines and has become the target of massive attention from many media outlets. This is due to its characteristics and its record ICO (Initial Coin Offering) of 4,197,956,135 USD. It stands out, among other things, for including as part of its initial main objectives the development of decentralized applications (dApps) and simplifying the integration and programming of smart contracts. However, its most notable aspect is its ability to eliminate virtually all transaction fees.

EOS unique platform is highly scalable. Feature that make it the ideal support for developers of decentralized dApps applications . That is, the applications that refer to protocols that work in decentralized networks. These dApps differ from older centralized applications in that they do not require centralized support to function. Rather, they are based on specific standards to facilitate interoperability and provide users with a broader focus on the market.

What is EOS?

EOS is a decentralized operating software system based on Blockchain technology. Own a public token to gain access to EOS.IO, a decentralized development system . Its aim is to support decentralized applications on a commercial scale by providing all the necessary basic functions. In other words, its objective is to be able to decentralize everything. By using the protocols of the EOS operating system you will have all these basic functions built in so that developers can do their best.

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The name of its token is EOS, the basic cryptocurrency of the public chain EOS.IO. EOS is very similar to Ethereum, but improved. This means that it can do everything Ethereum can do and more. If we compare EOS in terms of development goals, with Bitcoin and Ethereum we will see that they are gradual. According to this comparison, we would have Bitcoin as Blockchain 1.0, Ethereum Blockchain 2.0 and Eos as Blockchain 3.0. EOS is a system developed by Block.one.

Why was EOS created?

EOS  has been created with the intention of solving most of the problems presented by Blockchain technology . For that, EOS aims to build a decentralized blockchain that can handle fast and free transactions. As well as allowing smart contracts to be built on top of it, which will allow developers to launch dApps. And, not only that , EOS also hopes to build a platform with functions similar to an operating system , which will make it really easy to use.

Another goal of EOS is to overcome other blockchains that can also recognize smart contracts, but cannot execute quickly. As, for example, the case of Ethereum that can only process 15 transactions per second. For its part, EOS plans to process millions of transactions per second . With this, it is hoped to be able to solve the availability problem. However, it is really difficult for developers to insert basic functions like account retrieval and task scheduling.

How does it work?

The EOS smart contract contains an exchange contract . It helps users to create a transaction, which is a trade between two basic types of currency. The function of this contract is to cross different currencies (all types of standard currency in EOS), through each anchor with the value of the main chain of EOS, and then initiate transaction exchanges with each other. Here, we must clarify that this type of exchange differs from the ‘traditional’ Blockchain exchange.

Additionally, the delegated proof-of-stake process serves as the algorithmic foundation for the blockchain. That is, the proof of stake is based on the participation of all nodes in a network in which the currency shares are located, that is, the EOS assets greater than zero. These actions are assigned probabilities proportional to the value of the stake based on which the nodes that update the blockchain are selected.

How is the network secured?

In order to meet its objectives, EOS proposed a new Blockchain algorithm similar to but different from the well-known Proof of Stake. This algorithm became known as “ Delegated Proof of Stake ”, which translated into our language would be “ Delegated Proof of Stake ”. This new algorithm poses a change in the way in which the new blocks are generated within the network. The algorithm implements that the owners of the existing tokens are the ones who can choose which will be the producers of the blocks.

To participate in this selection process it is not necessary to have special requirements. Any user on the network can choose to be a block producer within the same network. However, once the user has been chosen as a producer, he must generate the blocks that are designated for him. Failure to comply with this guideline within 24 hours will be dismissed and a new delegate will be designated as producer. Being able to run again as a producer in a future vote.

Advantages of EOS

One of the main advantages of EOS is that it allows people to send and receive transactions anonymously. It’s like paying cash in the real world. But it is not the only one, we can also mention :

  • EOS can be perceived as an improvement on Ethereum.
  • In terms of market value, EOS is currently the fifthlargest cryptocurrency in the world.
  • Unlike Ethereum, the EOSnetwork is designed not to charge more network transaction fees  and the holders of the EOS tokens have the corresponding network usage rights.
  • Another of the great advantages of EOS is the continuity of permanent work on the innovation of existing properties of other Blockchain platforms.
  • It is designed to provide high performance and great scalability.
  • Transactionson the platform are completely free , with no loss of speed.
  • If the platform is the victim of hacker attacks, it can be immediately restored to a previous, secure system state.

Disadvantages of EOS

As well as having advantages that are part of its appeal, EOS also has certain disadvantages that are part of its nature. For instance:

  • One of its main advantages can turn into a disadvantage, since allowing operations anonymously also allows some people to use cryptocurrencies to commit crimes anonymously.
  • The procedure in the area of ​​the delegated proof-of-stake algorithm is often seen as a disadvantage for many.
  • Network participants who have large assets can use their influence and gain advantages over other participants.
  • Many of its functionsso far only exist in theory and have not yet been implemented in practice.
  • Its data processing is considered very fragile.
  • The data of its users is not protectedagainst those who are responsible for producing the blocks of the blockchain.
  • The EOS ERC-20 Smart Contract will prevent the transfer of the tokens once the distribution is complete.
by Abdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.

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