What is Eos And Should You Buy It?
Eos is the native cryptocurrency for EOS.IO, a decentralised platform for developing decentralised apps (dApps). The platform was created in June 2018, with the EOS coin having been launched the previous year to fund the platform’s operating costs.
Initially 200 million coins were issued, with the quantity an investor received proportional to the value of their investment. Eos tokens are needed to gain access to the EOS.IO platform, which hosts a huge array of dApps.
An app developer holds EOS tokens to access the network resources and build their app. A holder of Eos tokens can store them in the majority of available cryptocurrecy wallets, but there are also community built wallets specific to Eos.
How Does Eos Work?
Eos uses blockchain technology to operate, but EOS needed improved scalability to ensure faster transaction processing speeds. Without this the platform would not be able to cope with the volume of transactions required in running popular apps.
To achieve significantly faster transaction processing speeds the Eos blockchain uses a delegated proof-of-state consensus transaction validation system.
Instead of having a community of miners validating transactions and completing blocks on the chain EOS uses only a few trusted users.
Each day 21 users are selected to validate Eos transactions. These trusted users are re-elected each day and are accountable so they can be voted out if the network community is not content with their work.
The main benefit to using such a small number of users is the speed it brings to the transaction verifying process. It is this increased speed inherent with Eos which provides a platform where so many dApps can be developed and run.
The transaction block validators act as the Eos cryptocurrency miners and they are rewarded for the transaction blocks they validate with Eos tokens.
There is a 5% increase each year of the Eos token pool, from which 1% is reserved to reward transaction validators. At present there are no transaction fees when using Eos, a result of the platform’s ownership model.
What Are the Use Cases for Eos?
Having addressed the blockchain scaling issues from the outset, Eos provides a platform based on fast and free transaction processing for a wide variety of industries.
The faster transaction processing speeds are the key to instilling confidence in the platform to run apps reliably and efficiently.
This offers opportunities for businesses to use Eos to run supply chains, accounting software and to create smart contracts. Eos can also process payments in a matter of seconds and without any costs.
The largest use case for the Eos platform remains the development of dApps. Hundreds of developers run apps on the Eos platform covering a variety of niche industries.
These industries include gaming, gambling, energy markets and music sharing. As well as offering fast digital payments, financial institutions such as German company FinLab apply Eos to help improve the processes of the Fin Tech start-ups they support.