#6 Altcoins simple. What is EOS? Explaining advantages and points of criticism

#6 Altcoins simple. What is EOS? Explaining advantages and points of criticism

By Oliver Singer | Blog-Chain | 10 Apr 2020


What is EOS?

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EOS is a platform for decentralized applications based on blockchain technology. The concept of EOS can be compared to the concept of Ethereum, however EOS is more concentrated on unlimited scalability and high performance. The eponymous ERC20-Token, EOS, works as the object of investment.

 

How does it work?

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EOS is based on a delegated Proof-of-Stake algorithm, which calculates probabilities based on the assets, the participants of the network are holding. Because there is no mining, these probabilities specify, which participant is allowed to update the Blockchain.

In order to keep the system “fair”, the participants of the platform vote for representatives.

EOS understands itself not only as a platform to run dApps on, but also as platform for smart contract transactions.

 

Points of criticism


As I mentioned before, the participants of the EOS network vote for representatives, which are allowed to update the blockchain. There are 21 delegates (representatives) in total.
These delegates are responsible for achieving consensus and adding blocks with transactions or data.

The fact, that there are 21 individuals or corporations deciding, which transactions are being confirmed and how the blockchain is going to be updated, takes away the spirit of decentralization from the EOS Blockchain.

Also, there is a possibility for those block producers to use their power to freeze accounts or to deny transaction, which are technically correct.

Another point of criticism is, that EOS is still in a early stage and many functions, that sound fantastic theoretical, have to prove themselves workable first in practice.


Advantages

The maybe biggest advantage of EOS is the fact, that the users of the EOS Blockchain do not have to pay fees on their transactions.

 Imagine a big real estate company, that wants to save their purchase agreements on Blockchain. By buying EOS, the company is purchasing computing power. If the company would use amazon cloud or any other cloud provider, they would have to pay fees every month and the computing power would stay the same.
The more people are joining the EOS network, the stronger it gets and the more computing power is given to the users of the blockchain, so the company would only have to buy a certain amount of EOS once and would be supplied with constant increasing computing power.

Another big advantage of the EOS blockchain is, that in case of a hacker attack, the platform is immediately able to go back to a former system stand. Which is not possible for most other blockchain platforms.

 

Should I invest in EOS?

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Given the fact, that the EOS platform and its products and innovative approaches are still in a early stage, investing in EOS token is risky. On the other Hand, EOS has some interesting solutions in improving already existing technical properties of other blockchain platforms.
The big potential and great outlook for EOS, makes it a risky, but potentially very rewarding investment in the future.

 

This is not financial advice!
Always do your own research!

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