EOS is a virtual cryptocurrency and blockchain that was created to deliver an operating system to address scalability issues faced across other blockchains and in particular, transaction speeds and fees.
Unlike fiat money, there are no physical EOS tokens, just balances of tokens that are recorded on the EOS blockchain which is a decentralized, open-source public ledger.
EOS was created to address a number of key issues, but in particular:
- Scalability – Transactions per second have left the likes of Bitcoin and Ethereum well behind real-world speeds, with more traditional systems handling more than 1,000 transactions per second. EOS has adopted the used of Distributed Proof-of-Stake consensus (“DPOS”) to facilitate millions of transactions per second.
- Flexibility – DPOS ensures that a particular block within the blockchain can be put on ice until a resolution is found to an isolated block issue, without impacting the entire blockchain.
- User-Friendly – Appropriate tools and permissions are embedded to make the platform as user-friendly as possible.
The proof of stake sees the concept of miners, from a proof work system, replaced with what are referred to as validators. A person’s ability to validate transactions on the EOS blockchain is determined by how many EOS tokens held (“Proof of Stake”). The more EOS tokens held, the greater the validating power and the greater the chance of receiving EOS tokens as a reward.
It is the concept of proof of stake that addresses the scalability issue, limiting validating power to a validator’s stake in the system and therefore limiting mining power and increasing transactions per second.
The EOS white paper was published in 2017, with the EOS platform developed and released by a private company called Block.one in June 2018, key members of block.one being CEO Brendan Blumer and CTO Dan Larimer.
There are a finite number of EOS tokens, the total number being 1,000 million.
10% of the total number of EOS tokens, 100 million, has been allocated to Block.one, which are distributed to Block.one every second over 10-years.
Some distinct characteristics of EOS include:
- There are no physical EOS tokens, only virtual.
- The EOS Software can be used to create both private and public blockchains, determined by the parties incorporating preferred permissions and rules of participation in the network.
- EOS blockchain structure facilitates the construction of blockchain applications within the EOS software.
- Transactions are targeted at millions of transactions per second, eliminating fees to allow the easy deployment of decentralized applications.