What Is EOS?

EOS is a blockchain technology basically like Ethereum which has been brought to life by Dan Larrimer. He is also the creator of Steem and BitShares. On June 26, 2017 the project starts its ICO.

Features

Parallel Processing: The ability to do things in parallel, faster transcation speeds and more scalability.

A Constitution: A set of rules on which everyone agrees upon, these are linked to every block mined.

Self Sufficiency and Evolution: The current model allows for a 5% inflation, this will be used to develop the network further.

Decentralised operating system: EOS is similar to a decentralised operating system, in practice this means that developers can build applications on EOS. Owning EOS coins is a claim on server resources. A developer needs to have EOS coins to use the EOS blockchain. Developers will not spend the coins to use the server resources, s/he just need to prove they hold them.

This operating system will be hosted on servers (data centres) which in return will also be block producers. Block rewards in EOS are the incentive for these servers to host EOS applications.

The applications running on this decentralised OS will be able to communicate with each other, there will also be measures to “firewall” applications.

Applciations use very common functions such as user/password, user interfaces, backend (database) management. This means that applications can share frameworks or libraries which make development faster, more secure and less technical. For example, applications will have their own secure database and file space on EOS.

EOS will allow developers to create blockchain applications with which end users will easily interact with. Probably most users would not even know that they will interact with one when using EOS as this will be completely transparent to the users.

Etherum does a very poor job of making interacting with their blockchain a user-friendly process.

EOS main competitor Etherum, demands users to pay for every transaction. EOS will not do so. This will incerase adoption.

ERC20 like tokens can be created on EOS, this means that ICOS can be hosted on this blockchain.

The ICO is one year long this should increase distribution, which should increase adoption.

200,000,000 two hundred million – distributed during a 5 day period beginning on June 26, 2017 at 13:00 UTC and ending on July 1, 2017 at 12:59:59 UTC.

700,000,000 seven hundred million – split evenly into 350 consecutive 23 hour periods of 2,000,000 EOS tokens each beginning on July 1, 2017 at 13:00:00 UTC.100,000,000 one hundred million – will be reserved for block.one and cannot be traded or transferred on the Ethereum network.

100,000,000 one hundred million – will be reserved for block.one and cannot be traded or transferred on the Ethereum network.

Challenges

The current ICO market is very agitated. To me, it feels a bit like a mania at this time.

Ethereum has the first mover advantage in the smart contract space, a lot of systems have been built on Ethereum and it has proven itself to be a commercial grade blockchain. It is not impossible for Ethereum to adopt the same model. It is already planning to change from a POW to a POS.

There are other competitors besides Etherum for example, RChain, Rootstock/RSK, and Crown have not yet released their smart contract / decentralised platform suite but once they do it could be cheaper and easier for developers to use these new platforms.

There are other blockchains with smart contract capability such as BitShares and Graphene currently. These have limited smart contract capabilities at this time but they could adapt their systems to a similar model in the future.

Smart contracts will be readable code rather than binaries. This would make maintaining proprietary smart contract tech confidential difficult. < I am doing further research on this point.

Dan Larrimer has a history of moving on to the next thing, he did so with Steem and Bitshares. This is not necessarily a bad thing, but if the timing is not right the project could suffer.

There is no cap on the amount of money being funded in this ICO. How will the excess funds be managed? Could this lead to a hyper valuation? What happens once the tokens can be moved? Would short-term investors try to make a quick buck, sell and cause the prices to crash?

Ethereum versus EOS

eos coin

In a kind of geeky Clash of the Titans, two of the greatest names in Blockchain innovation are having a discussion on which of their two frameworks has better general ease of use for exchange numbers.

Buterin Opens

The first in the ring was Buterin, who reacted to an Ethereum Reddit string post asserting that EOS was far better than Ethereum as a result of the quantity of exchanges and adaptability that Ethereum can't offer.

The Ethereum fellow benefactor contended that EOS, Larimer's mind kid, while offering substantial quantities of exchanges yet through a framework that expels the securities of Merkle confirmations and makes it unthinkable for consistent clients to review the framework unless they want to by and by run a full hub.

He additionally contended that the idea of EOS decentralization through DPOS causes undue dependence on voting, which has demonstrated dangerous in the past with low voter turnout and next to zero voter motivating force.

Ultimately, Buterin disagreed with EOS charges, since exchanges are connected specifically to coins held, making it exorbitant for poorer clients:

"Poor people, who are not keen on putting the whole of their frequently low reserve funds into a crazy new crypto resource keeping in mind the end goal to have the capacity to utilize a Blockchain."

Return Volley - Larimer Responds

Larimer, as far as it matters for him, tended to the distinction with EOS and approval, expressing that Ethereum is assembled more on an arrangement of trust with the piece makers, though EOS has a speedier and more straightforward match up highlight for the individuals who are not delivering full hubs, making it less demanding to approve.

Larimer likewise managed voter turnout, calling attention to that measures have been taken to expand voter appearance and interest.

At last, he tends to expenses, taking note of that the individuals who utilize the EOS chain by and large have tokens in advance, and that the use to cost proportion will in the end balance out in view of market powers.

Larimer Closes:

"By and by studies of DPOS, EOS and STEEM depend on imperfect monetary suppositions, falsehood and obliviousness/disavowal of vulnerabilities in their proposed arrangements."

Significance for ICOs

The issue is critical on the grounds that EOS is a methods for managing a portion of the obvious shortcomings of Ethereum. Ethereum (per Buterin) is the better framework, and he discovers shortcomings inside the EOS system. A portion of the verbal confrontation will require far reaching usage to figure out which framework is right.

On account of the reliance of ICOs and other Blockchain extends on a stage (presently intensely supporting Ethereum), EOS speaks to another framework that can take into account includes that Ethereum does not. Buterin and Ethereum aficionados, be that as it may, sees the new framework as more imperfect than the first.

The eventual fate of Blockchain innovation and its utilization in the general population segment is open to question. These two organizations are grappling with each other for will's identity the stage of decision as Blockchain keeps on expanding in ubiquity and across the board utilize.

Getting Started With EOS

We believe that EOS means different things to different people. We have received numerous amazing interpretations of what EOS stands for or what it should stand for so we have decided not to formally define it ourselves.

EOS.IO is software that introduces a blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications (the “EOS.IO Software”). This is achieved through an operating system-like construct upon which applications can be built.

The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across multiple CPU cores and/or clusters. The resulting technology is a blockchain architecture that has the potential to scale to millions of transactions per second, eliminates user fees and allows for quick and easy deployment of decentralized applications.

Block.one, a Cayman Islands exempted company, is building the EOS.IO Software. With employees and advisors based around the world, the company focuses on business-grade technology solutions, including blockchain software development.

At the end of its development stage, block.one will be releasing the EOS.IO Software it has developed under an open source software license.

What Are EOS Tokens?

EOS tokens are ERC-20 compatible tokens distributed on the Ethereum blockchain pursuant to a related ERC-20 smart contract (the “EOS Tokens”).

Block.one is building the EOS.IO Software but it will not configure and/or launch any public blockchain platform adopting the open source EOS.IO Software (the “EOS Platform”).

Any launch of an EOS Platform will occur by members of the community unrelated to block.one. Third parties launching the EOS Platform may delete, modify or supplement the EOS.IO Software prior to, during or after launching the EOS Platform.

The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.

The EOS Token distribution will take place over 341 days starting on June 26, 2017 at 13:00 UTC. One billion (1,000,000,000) EOS Tokens will be distributed according to the schedule below:

200,000,000 EOS Tokens (20% of the total amount of EOS Tokens to be distributed) will be distributed during a 5 day period beginning on June 26, 2017 at 13:00 UTC and ending on July 1, 2017 at 12:59:59 UTC (the “First Period”).

700,000,000 EOS Tokens (70% of the total amount of EOS Tokens to be distributed) will then be split evenly into 350 consecutive 23 hour periods of 2,000,000 EOS tokens each beginning on July 1, 2017 at 13:00:00 UTC.

100,000,000 EOS (10% of the total amount of EOS Tokens to be distributed) will be reserved for block.one and cannot be traded or transferred on the Ethereum network.

At the end of the 5 day period and at the end of each 23 hour period referred to above, the respective set number of EOS Tokens set forth above will be distributed pro rata amongst all authorized purchasers, based on the total ether (“ETH”) contributed during those periods, respectively, as follows:

eos coin

Where:

a = Total ETH contributed by an authorized purchaser during the period.

b = Total number of EOS Tokens available for distribution in the period.

c = Total ETH contributed by all authorized purchasers during the period.

As an example:

20 EOS Tokens are available during a period.

Bob contributes 4 ETH and Alice contributes 1 ETH during the period. The period ends.

As a total of 5 ETH were contributed for 20 EOS Tokens during the period, 1 EOS Token will be distributed for every 0.25 ETH contributed. Therefore, Bob receives 16 EOS Tokens and Alice receives 4 EOS Tokens.

A lot of token distributions only allow a small amount of people to participate. The EOS Token distribution structure was created to provide a sufficient period of time for people to participate if they so choose, as well as give people the opportunity to see the development of the EOS.IO Software prior to making a decision to purchase EOS Tokens.

The number of EOS Tokens available during the First Period of the EOS Token distribution (i.e. the first 5 days) is higher than in subsequent periods in order to: (1) accommodate the current interest and demand that we have received for the EOS Tokens; and (2) help to more accurately determine early stage price discovery of the EOS Tokens.

Founders tokens were allocated to block.one pursuant to feedback we received from the community in order to ensure that block.one has aligned interests with those participating in the EOS Token distribution.

The founders tokens represent 10% of the aggregate EOS Token distribution (or 100,000,000 EOS Tokens) (the “Founders Tokens”). The EOS Token distribution smart contract does not permit block.one to trade or transfer the Founders Tokens during the EOS Token distribution period.

If an EOS Platform adopting the EOS.IO Software is launched, the default EOS.IO Software configuration developed by block.one will lock new founders tokens distributed pursuant to such EOS Platform in a smart contract and release 10,000,000 (10%) of such tokens to block.

One at the end of each one year anniversary of the genesis block over a period of 10 years. As mentioned above, the EOS.IO Software configuration of the EOS Platform will be ultimately determined by the community when someone other than block.one initializes a genesis block and starts a blockchain.

To participate in the EOS Token distribution, you will need an Ethereum compatible wallet or an application where you and only you hold the private keys. Private keys are needed to correctly interact with smart contract functions, like transferring cryptographic tokens. Do not send ether (“ETH”) directly from cryptocurrency exchanges, only an ETH compatible wallet.

How To Get An EOS Wallet?

The recommended wallets to use are:

The minimum contribution accepted during any period of the EOS Token distribution is 0.01 ETH. Smaller contribution amounts will be rejected.

Additionally, to minimize bloat of any genesis block configuration, any ETH wallet that holds less than 1 EOS Token or another minimum amount could be ignored by the person who configures and launches the EOS Platform based on the EOS.IO Software. This, however, will ultimately be decided by the person who configures and launches the EOS Platform.

The amount of ETH received during each current period will be displayed on the eos.io website. The history of ETH contributed in previous periods can be viewed on the Ethereum blockchain.

No, it is not possible to know the price of a specific period until all ETH is received for that period and if you contribute in the last minutes or seconds of a specific period, there is no way to guarantee that your ETH will be received for that period. Please review all the risks associated with purchasing EOS Tokens including the technical risks set forth in the Purchase Agreement.

It was decided that U.S. citizens, residents and entities should be excluded from purchasing EOS Tokens in the token distribution because of some of the logistical challenges associated with differing regulations in the many states of the United States of America.

Block.one does not believe that the distribution of EOS Tokens or the EOS Tokens themselves are securities, commodities, swaps on either securities or commodities, or similar financial instruments.

The EOS Tokens are not designed for investment or speculative purposes and should not be considered as a type of investment. Nevertheless, U.S. citizens, residents and entities should not purchase or attempt to purchase EOS Tokens.

At the end of each period, you may claim any EOS Tokens allocated as an ERC-20 compatible token on the Ethereum blockchain.

While block.one will not be involved in any way in the transferability of the EOS Tokens, it is possible that EOS Tokens could be transferred on a peer-to-peer basis or on platforms operated by 3rd parties during the EOS Token distribution period. EOS Tokens will become fixed (non-transferable) on the Ethereum blockchain within 23 hours after the end of the final EOS Token distribution period which will occur on June 1, 2018 at 22:59:59 UTC.

Yes, the EOS Token is an ERC-20 compatible token; therefore, transfers will be subject to ETH gas fees like all other transactions on the Ethereum network.

As mentioned above, EOS Tokens will become fixed (non-transferable) on the Ethereum blockchain within 23 hours after the end of the final EOS Token distribution period which will occur on June 1, 2018 at 22:59:59 UTC.

At this point the EOS Token distribution process will be complete and any person who wishes to launch an EOS Platform adopting the EOS.IO Software will be able to generate a JSON file mapping EOS public keys to the fixed balances of the EOS Tokens from the state of the Ethereum blockchain.

The EOS.IO Software is built such that any EOS Platform that adopts the EOS.IO Software will require approval of holders of not less than 15% of the total issued and outstanding EOS Tokens before tokens on such blockchain (the “Blockchain Tokens”) can be transferred.

In other words, if the EOS.IO Software is adopted, it will be the responsibility of holders holding at least 15% of the issued and outstanding EOS Tokens to adopt one or more blockchains in order for Blockchain Tokens received on such blockchains to be transferrable.

As block.one will not configure and/or launch any EOS Platform, block.one will have no control over when, how or whether the EOS.IO Software is adopted or implemented, or how, when or whether the EOS Platform is launched. As such, you should not expect and there is no guarantee that you will receive any other cryptographic tokens or digital assets now or in the future.

The EOS Token distribution contract, EOS Token smart contract and the EOS Tokens are being provided on an “as is” and “as available” basis without representations, warranties, promises or guarantees whatsoever of any kind made by block.one.

Prior to purchasing EOS Tokens, you should ensure that you carry out your own examination and investigation and carefully review in their entirety the risks associated with purchasing EOS Tokens as set forth in the Purchase Agreement.

Purchases of EOS Tokens are non-refundable and purchases cannot be cancelled. Under no circumstances will you be entitled to receive money or compensation for any EOS Tokens purchased or your inability to purchase EOS Tokens.

As a private company, proceeds of the EOS Token distribution will be utilized by block.one in its sole discretion. block.one intends to use certain of the proceeds for general administration and operating expenses, as well as to build a blockchain consulting business focusing on helping businesses re-imagine or build their businesses on the blockchain, developing more open source software that may be helpful to the community and building decentralized applications using EOS.IO Software.

Blockchains that adopt the EOS.IO Software do not require a foundation or a non-profit organization to help grow or maintain the network because such blockchains will be self-funding.

Based on the EOS.IO Software, it is intended that any blockchain that adopts the EOS.IO Software will generate natural inflation in such blockchain tokens at a rate of five percent per year to be distributed to the platform’s block producers in connection with their confirmation of transactions on the platform and to the top three smart contracts or proposals that receive the most amount of votes from holders of such tokens. In this case, such a blockchain will not be reliant on any one foundation, organization, or individual for its growth, development or maintenance.

No, during the entire EOS Token distribution period, block.one will not do any of the following:

Block.one intends to engage an independent third party auditor who will release an independent audit report providing further assurances that block.one has not purchased EOS Tokens during the EOS Token distribution period or traded EOS Tokens (including using proceeds from the EOS Token distribution for these purposes).

EOS Resources

How To Buy EOS?

You can buy and sell EOS at at a few exchanges like BITFINIX.com and KRAKEN.com , also https://exodus.io and https://shapeshift.io

EOS is one of the most talked about blockchain projects. Launched by block.one, the company building the EOS.IO software, the EOS token is explicitly stated not to have any value, utility, or purpose. Yet its token market capitalization has already surpassed that of older and more well-established cryptocurrencies like Zcash, BitShares, Steem, and Augur.

How To Earn EOS?

The first day of distribution of EOS Coins is going to be with out price or close to zero price.

The EOS Token distribution will take place over 341 days starting on June 26, 2017 at 13:00 UTC. 1,000,000,000 (one billion) EOS ERC-20 compatible Tokens (“EOS Tokens”) will be distributed according to the schedule below:

eos coin

And the most important part is first 5 day period !!! Because 20% from 1 000 000 000 coins will be distributed.

Compare to 70 % in 350 days period, it is a HUGE amount of EOS Coins.

So you have to act in firs 5 days, but better to do it in the first day !

Before any new prices stand up.

Let's move on:

In next part we are going to understand why is it distribution of coins but no sale.

And it is a not regular sale, because you can contribute any amount of Ethereum (The minimum contribution amount is 0.01 Ether. - it is around 3 $ )

And then you going to receive EOS coins in proportion with your contributed ETH from that day pool amount.

You know the math ? Right ?

It is not going to be hard =]

eos coin

So, amount of EOS Coins you going to receive, is fully depends from total amount of Ethereum provided in particular day.

And, how you now understand, it is better to receive chunk from 40 000 000 coins a day, then 2 000 000 coins a day !

If this is clear ?

Let's talk how we can acquire coins.

And now I am going to give step by step instructions.

This is what you should do :

1 - Install Google Chrome Browser - here is the link : https://www.google.com/chrome/browser/desktop/index.html

2 - Install MetaMask plugin for Google Chrome (it is going to be your wallet for ETH : https://chrome.google.com/webstore/detail/metamask/nkbihfbeogaeaoehlefnkodbefgpgknn?hl=en

3 - open MetaMask and signup for Ethereum account.

4 - transfer desired amount of ETH.... from your exchange account, or STEEM account to new MetaMask wallet.

eos coin

5 - And then you just wait to get EOS Interface, which is going to be available on June 26th, 2017 at 13:00 UTC.

Link for the site : https://eos.io/

Where To Spend EOS?

Before you consider investing in EOS Coin consider these 6 things. These are 6 things about EOS that your NEED to know!

Eos Coin links listed below here in the description.

People are saying that EOS coin is the ethereum killer of decentralized applications or dapps. the same founder of Steemit is also developing eos coin and boxmining also talked about eos ico on his channel.

Stick around to see what is eos coin because in this video you will see what is eos in a nutshell, eos coin is a hot initial coin offering.

Eos is a crypto platform that will support decentralised apps (Dapps)

Designed to make it easier for developers to develop these Dapps

Creator of Eos is also the co creator of Steemit and bitshares.

Follow EOSIO on Steemit (Blogging platform)

EOS differs from Ethereum in a way that EOS is Easy mode while Ether is hard mode.

To create an app on Ethereum you must first write the app, then put it into machine mode only then you can create the app.

With Eos however, they try to make it easier. You don’t need smart contracts to interact with decentralised apps on EOS. Which means that users no longer have to pay money for these interactions. Which makes sense for steemit for example. You don’t want to spend money to write/spread content.

EOS provides basic services on the platform already such as database management, account management and other services so developers don’t have to rewrite the code for it.

On ethereum, you’d have to rewrite all of that code for all of these standard/ basic features. And EOS provides this as a base.

EOS is kind of like an operating system for the creation of smart apps in a sense. And the cool thing about EOS is that it seems to be very easy to operate.

All the technical features of EOS can be found on the white paper, which can be found on Steemit.

EOS ICO started on the 26th of June 2017 and it ends on 1st of June 2018 Hosted by Ethereum believe it or not.

They will distribute 90 % of its tokens to investors. Which is quite generous for an ICO. This will be divided over 2 phases, 1st one will be 20% and second 70%.

It will take time to create an EOS Blockchain, a lot of things can happen in the mean time. This would be a disadvantage.

Especially now that Ether is close to implementing a lot of scalability solutions that could impact the valuation of EOS.

But like I said in other videos 1st time movers don’t always have a longterm advantage.

I will probably get some EOS, for the simple reason that I think the founders are really on to something with Steemit and the ideas are great. All they need is time and proper funding, and I can see its price increasing in the near future. At the time of this recording the price of one EOS $1.90 with a market cap of almost 500 million.

What Is EOS Mining?

EOS is one of the most talked about blockchain projects distributing a token; and it doesn’t even have a blockchain yet. Launched by block.one, the company building the EOS.IO software, the EOS token is explicitly stated not to have any value, utility, or purpose. Yet its token market capitalization has already surpassed that of older and more well-established cryptocurrencies like Zcash, BitShares, Steem, and Augur.

Trading volume on EOS tokens has exceeded US$91 million since July 1, when it was listed on the major cryptocurrency exchange Bitfinex. Despite heavy speculative activity and raising $185 million in just the first phase of the token distribution, many are puzzled about the question:

Like Ethereum, EOS is a smart contract enabled hosting platform built for open-source projects and consumer-facing decentralized applications. It intends to take market share from Ethereum while promising a more scalable blockchain with usability for large-scale businesses.

Unlike Ethereum’s virtual machine which acts as a distributed global supercomputer, EOS is built around a distributed operating system-like construct, which applications can be built upon.

“The resulting technology is a blockchain architecture that has the potential to scale to millions of transactions per second, eliminates user fees and allows for quick and easy deployment of decentralized applications.” - EOS.IO

The EOS project is developed by the block.one team, headed by Brendan Blumer as CEO. Daniel “Bytemaster” Larimer, known for creating BitShares and Steem and inventing the delegated-proof-of-stake (DPOS) consensus algorithm, is CTO. Brock Pierce, creator of the first ICO token, Mastercoin, is a partner. Ian Grigg is the financial cryptographer and also a partner.

“EOS is designed to deliver on the promises of what we know blockchain is capable of, and the community has shown a great interest in our product to-date,” explains Blumer. “Given its importance and economy-changing potential, we felt it was important to give everyone an equal chance to purchase EOS.”

The EOS token does not have “any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform,” according to the company.

Block.one CTO Daniel Larimer tells Brave New Coin that EOS tokens will be used as a staking vehicle for decentralized applications (dApps) that require computational power to execute smart contracts. Rather than charge its users fees to take some action in the EOS network, EOS is designed such that bandwidth, computation, and storage capacity are allocated in proportion to the amount of EOS that is staked within an application.

Because the EOS platform is intended for businesses, the burden of providing development resources rests with the application developers. Thus, EOS token can be used as the “stake” for funding application development on the EOS network. Meanwhile, users are able to play in the EOS environment for “free” without ever having to first buy in with a cryptocurrency.

However, block.one gives no guarantees on the transferability of the EOS tokens to any EOS platform. The ERC-20 tokens are Ethereum tokens, and it’s up to the largest token holders of EOS, holding a minimum of 15% of the total issued, to approve the adoption of one or more blockchains running EOS.IO software.

Only when an EOS blockchain is established will the ERC-20 tokens be transferrable to EOS “Blockchain Tokens.” The ERC-20 tokens will then become “fixed,” or non-transferrable, on the Ethereum blockchain 23 hours after the end of the EOS token distribution period on 1 June 2018.

“Bitcoin (Nakamoto 2008) seemed to be the word on a blockchain that promised the inspirations of both digital cash and smart contracts. Although it captured the attention of the cypherpunks, media and hodlers, it failed to make a mark on business.” - Ian Grigg, block.one Partner

Due to their decentralized nature, blockchains require a security model for participants of a network to achieve consensus. To come to consensus is to agree on transactions executed through the protocol, deterministically and near-simultaneously.

The security mechanism behind Proof-of-Work (POW), mining in the Bitcoin environment, has become somewhat of a stigmatized service. While cryptocurrency speculation has seen certain coin prices rise over 4000% in a span of months, public sentiment toward overly profitable miners has turned sour.

As such, developers are conceptualizing ways to remove mining from the consensus equation. The direction cryptocurrency research is moving toward now is an alternative security model called Proof-of-Stake (POS), wherein wasteful expenditure of electricity to provide security can be substituted by people who hold a “stake” in the form of native blockchain tokens.

Bitcoin developer, Eric Martindale, states that “Bitcoin’s Proof-of-Work is economically neutral in that the product is purely the irreversibility of the proof, rather than working towards any particular goal other than the security of the network.” Meaning, POW decouples the work from the content it secures, whereas POS binds them together.

“POW allows for a truly permissionless ledger, “ states Purse.io CTO and Bitcoin developer, Christopher Jeffrey. “While it can be argued that POW requires external wealth to participate (in the form of mining hardware), POS requires wealth from within.

The Bitcoin protocol itself does not care whether a block came from a pool, farm, or solo miner, as long as the header amounts to a valid proof-of-work. POW may inadvertently invite mining centralization via external forces, but it does not necessitate it on the protocol level. In contrast, POS requires centralization as a protocol rule.”

Proof-of-Stake is a consensus mechanism that is currently heavily conceptualized but is not readily implemented in any major protocol for practical reasons. A straight POS security model gives voting power directly in proportion to an individual or entity’s monetary capital. Imagine if the people holding the most US dollar reserves are the same individuals writing and enforcing the law of the United States.

“Proof-of-Stake makes a lot of sense for small, private networks. For public networks, the only way to prevent sybil attacks is to make people bear the burden of proof, or cost, of entry,” Martindale explains. “In Proof-of-Work, people get paid for what they do rather than what they’ve accumulated. POW incentivizes security.

POS incentivizes accumulation. Therefore, the only thing that’s valuable is something that’s contributing to the ecosystem. Proof-of-Stake contributes nothing to the ecosystem. If in a POS system, you ever get more than 50% of the money, you permanently own the system because there’s no barrier to entry besides capital.”

The problem with POS, according to its critics, is that it favors those in the network with the greatest shares of the currency, and therefore are granted heavier voting power. In other words, POS blockchains are subject to censorship, or cheating, from the people with the most money. This incentivizes capital accumulation within the protocol instead of productive output, known as the “work” in Proof-of-Work protocols like in Bitcoin.

Proof-of-Stake remains a popular concept though for new protocols like EOS and Tezos since it removes extrinsic costs like mining hardware. This makes it much less expensive than in Proof-of-Work to bootstrap a new distributed network that needs to somehow achieve consensus among the network’s participants.

The EOS blockchain security model, or consensus mechanism, takes from Daniel Larimer’s abstraction of the Proof-of-Stake model called Delegated-Proof-of-Stake. The first major projects running DPOS in production were BitShares and Steem, two projects implemented by the block.one CTO.

“The networks of BitShares and Steem have been incredibly robust for several years and have not actually suffered any hypothetical attacks. I am confident that I can defend the claim that DPOS is the most decentralized by any measure.” - Dan Larimer, Block.one CTO

Delegated Proof of Stake (DPOS) is a consensus mechanism that was conceived in 2013. Variations of DPOS have been introduced in BitShares, Steem, Tezos, Crypti, Peerplays, and Ark.io. Now that EOS is seizing a sizeable share of the cryptocurrency market, this growing honeypot running on the DPOS concept will inevitably attract battle testing of its resiliency against censorship.

Modeled after traditional democratic convention, Delegated POS uses approval voting to elect known “delegates” and charge them with the duty of securing the blockchain. Since their identities are known, block validators are subject to bribery or can otherwise collude to censor transactions. To mitigate bribing attacks, bad actors who are caught censoring transactions are voted out by stakeholders.

Block reward is based on a negotiated amount between the block validators and the stakeholders up to a maximum of 5% of the market capitalization per year. If delegates ask for too much reward, they are voted out by stakeholders. Being voted out from a delegate position and losing future block reward payouts is the opportunity cost against incentivizing delegates from taking bribes, and thus prevents attackers from gaming the system.

There are 21 seats for delegates, or block validators, in the EOS protocol who will act as the “miners,” creating blocks in three second intervals. Having 21 people hold seats as delegates is a deliberate decision.

Drawing on the lessons learned from BitShares, Dan Larimer told Brave New Coin, “You require a ⅔ majority to have an honest system. Originally BitShares started with 100. There’s not enough oversight of who those 100 people are because there’s not enough bandwidth of voters’ attention to decide. Bringing it down to 21 reduces the cost of the system. The network has to pay each person that runs a full node.”

When asked about the cost tradeoffs for less decentralization, the DPOS creator explained, “There is a balance between decentralization and cost with diminishing marginal utility associated with increasing decentralization.”

In Bitcoin, “there are 10 mining pools, of which only 6 or less participate in the confirmation of any individual transaction. On Steem and EOS, there are 21 unique individuals who participate in the validation of every transaction, or 15 out of 21 compared to 4 out of 6 for Bitcoin. So 20 is more than twice the amount of decentralization of the mining pools of other networks,” Larimer explained. “There are a lot of protections.”

One of those protections is a concept termed Transactions-as-Proof-of-Stake, or TAPOS. Larimer called TAPOS “the end of mining.” How it works is, each transaction contains the hash pointer to the most recent block at the time it was signed. A transaction is invalid if that hash pointer is not present in any fork of the chain. Because of TAPOS, it helps mitigate the risk of chain reorganizations. Meaning, this prevents a valid transaction you make from being discarded.

According to Larimer, “It’s very unusual for there to be a fork or a reorganization because the block producers are cooperating. Operationally, they need to cooperate with their peers or they’re voted out.”

Latest EOS News

The Dawn of EOS.IO

In the EOS.IO Technical White Paper, we proposed the EOS.IO software as the dawn of a new era of blockchain computing. The EOS.IO development team has spent the summer working very hard. Summer is over and the development of the EOS.IO software is ahead of schedule. It can now be used with distributed network configurations.

Casper as an EOS Contract

There are two parts to the Casper protocol, the proposal mechanism and the consensus mechanism. The proposal mechanism produces a sequence of blocks that link together and the consensus mechanism creates a checkpoint every 100 blocks.