Until recently, most blockchain implementations targeting cryptocurrencies have been using Proof of Work (POW) as a method of consensus. However, PoW's issues surrounding scalability and extravagant usage of computational resources have people looking toward another method of consensus - Proof of Stake (POS)
Proof of Stake (POS) is taking precedence over POW, and the EOS blockchain is making use of a variation of POS - Delegated Proof of Stake (DPOS). In this post, we discuss features of EOS & DPOS and how it would lead to a better industry of blockchain applications.
To start with, EOS is not a blockchain. It is a blockchain operating system. That specification alone changes a lot of things. Ethereum, for example, is like a computing resource by itself with inclusion of EVM (Ethereum Virtual Machine) on every node that wants to participate in the network.
As a blockchain operating system, EOS would host, facilitate and govern any applications that are built on top of it like any other operating system we have ever had. EOS guarantees two main features that have been pain points for a lot of blockchain systems. They are:
- ZERO TRANSACTION FEES
- MILLIONS OF TRANSACTIONS PER SECOND
Delegated Proof of Stake (DPOS)
Before we jump into the features, let's understand POS & DPOS. In POS, we have validators instead of “miners” and all mining is done virtually. Validators lock up some of their coins as stake and start validating blocks. If the same block gets appended, then the validators get rewarded with value proportionate to their stake.
Delegated Proof of Stake (DPOS), takes a minor shift from POS. Instead of “validators” we have “block producers”. To be specific, there are 21 block producers. These block producers are elected in a voting process by anyone who has tokens on a blockchain integrated with EOS.
Each block producer will be given the opportunity to produce blocks proportional to the votes received. For a transaction to be confirmed we just need to wait for 2/3rd majority, which is 15/21 votes. This would take 1.5 seconds approximately. Hence, a 3 second block time has been guaranteed with this mechanism. Internal attacks stirred up by any block producer will be impeded by down voting that block producer and choosing a new replacement for the same.
8 Major Features of EOS
Feature 1: Vertical & Horizontal Scaling
Blockchain is no more the "newbie". Its success and longevity will depend on its ability to support real world applications. Scalability is going to be the reason why many of the current blockchain implementations will fail. As time goes, POW systems would incur high transaction fees and low throughput. EOS is tackling this problem. They support both, horizontal and vertical scaling.
- Horizontal scaling includes support for parallel processing of smart contracts.
- Vertical scaling includes transactions processed for second
Feature 2: Easy Maintenance
In EOS, any issue with a node/faulty DAPPs (Decentralized Application) can be mitigated by freezing that specific block producer or account. Other non-faulty block producers have the ability to freeze such accounts. They can also reject transactions based on computational cost. Transactions that take too much time and resources to execute would not be accepted by most other block producers. This enables EOS to eliminate the use of additional parameters, like "gas" in Ethereum.
Feature 3: Jurisdiction Rules
All transactions need to append a hash of constitution along with their signatures.
Feature 4: Community Benefited Applications
An innovative idea by EOS - Users can elect 3 applications or smart contracts which would receive a configured percent of token supply per annum. These 3 applications can always be de-elected or elected again by the users.
Feature 5: Partial State Storage
EOS software allows any full node to run a subset of applications. This enables storing of partial state. Nodes maintain logs of all messages exchanged between accounts and applications. These logs are used to build states back in case of downtime.
Feature 6: Nil transaction fees
In general, users of blockchain applications are charged transaction fees due to the expensive resource utilization incurred in maintaining these applications. In EOS, bandwidth and resources are allocated depending on the tokens held by an application owner. Hence, it does not depend on the token value. This would promote new monetization techniques for the use of blockchain applications instead taxing users.
Feature 7: Ability to Rent Blockchain Bandwidth
Token holders can rent unconsumed bandwidth. This unconsumed bandwidth can then be allocated by block producers to other applications accordingly.
Feature 8: Interoperability
EOS is built to support multiple virtual machines. Currently, Web Assembly (WASM) and Ethereum Virtual Machine (EVM). This would enable anyone to run their smart contracts on other platforms like Ethereum or to communicate with applications on EOS seamlessly. This leads to inter blockchain communication.
Above is a list of the notable features of EOS. There are many other details on implementation that could be derived from their Technical Documentation.
Block.one is the core company responsible for developing EOS blockchain. Part of the team is Dan Larimar - famous for his contributions in BitShares and Steem platforms. EOS takes ideas from both platforms and puts them together.
3 Reasons Why Some Say "No" to EOS
Closing Thoughts
Ethereum, Waves, Cosmos (Tendermint) and Lisk are all competing technologies that are tackling the scalability issues in blockchain tech. 2018-19 is going to be a period of experimentation of scalability in the blockchain realm. We can’t be certain of who will come out ahead. But staying informed and keeping our eye on the ball will prove to be very useful (and potentially profitable).
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