Crypto markets are currently in the brutal grip of fear and uncertainty, with very few projects escaping the squeeze. Unfortunately, EOS is among the victims and has lost 40% in the last few days, coming down from $14.83 on Monday to $8.93 today.
While this decline obviously reflects the wider market sentiment, EOS should be concerned about losing so much of its market cap so quickly as the project is still in its prolonged ICO stage.
What is EOS?
EOS will be used as the base layer of decentralized applications (dApps), and it aims to be a simpler platform to build on than competitors such Ethereum. EOS will offer many powerful tools that programmers can use as shortcuts for building on the network.
All blockchains employ methods of reaching a consensus, be that Proof of Work (PoW) or Proof of Stake (PoS). EOS plans to introduce a consensus mechanism called Delegated Proof of Stake (DPoS), which is basically a technological democracy. At any time, 20 token holders earn a salary by acting as witnesses to the verification of transactions. A further 80 witnesses are also paid for their work. Beyond these 100 people, there can be infinitely more and their work is voted on, bringing them to the top. So, if a top 20 witness begins to perform poorly, he or she will lose the title. This method of reaching a consensus is designed to avoid centralisation, reduce electricity use, and, most notably, solve scalability issues.
EOS will make use of graphene technology, which stress tests have shown to be capable of processing 10,000 to 100,000 transactions per second. This is quite fast by today’s blockchain standards. If these figures pan out in real-world tests, they could place EOS among a handful of blockchains that could be commercially viable. The system will also make use of parallel processing, so that the generation of blocks is split into parts, which are then executed simultaneously on multi-processor chipsets. EOS will also have no fees for validating the blockchain – a feature bound to be very popular with token holders.
What’s next for EOS?
EOS is undoubtedly an interesting project as it solves many issues, at least in theory. We say in theory because the platform is still under construction. Founder Dan Larimer, the head programmer and creator of both Bitshares and Steemit, is an incredibly gifted blockchain coder.
However, there are some valid concerns, such as the fact that company has been registered in the Cayman Islands, which is relevant beyond tax matters given that the legal recourse is murky at best for token holders if anything were to go awry. The ICO has been running for 12 months, and the terms and conditions are very vague. They don’t promise anything and explicitly state that the tokens being bought in the ICO are not tokens for the EOS platform.
Whether it is due to marketing and hype or people’s belief in the project, EOS has managed to rise among the ranks. The positive thing is that EOS does have an excellent team of very capable senior executive members.
Currently, EOS is trading on Bithumb, Bitfinex, Huobi and Binance among other exchanges and since it is an ERC20 token, it can be stored in a compatible Ethereum wallet such as MEW (MyEtherWallet).