EOS is a general purpose blockchain. The technology behind EOS is based on previous successful projects, which is a strong point.
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EOS = End Of Steem
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EOS is a general purpose blockchain. EOS.IO software, or operating system, made by the Cayman Islands company, Block.One, enables building of decentralised applications and businesses on the blockchain. Block.One CEO, Brendan Blumer says “The idea of EOS is that if you are able to build a basic website, you should be able to build and launch a decentralised business.”
- EOS software/operating system
- ERC-20 Tokens
What is EOS.IO software?
EOS.IO is an operating system much like that of Steem, which is not altogether surprising as the Chief Technical Officer (CTO), is Dan Larimar who has been the main developer on both. The EOS system is set up in a way that can theoretically scale to millions of transactions per second, and all without user fees. EOS.IO software will be available, under open source license, following the closing of ERC-20 token sales. Some of you might be asking, if it’s available open source, then what are the ERC-20 tokens for and why should you buy them?
How do ERC-20 Tokens work?
Firstly, and this is quite important to note, according to the EOS.IO website
“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.”
In fact, ALL proceeds from the sale of one Billion ERC-20 tokens will be used as revenue for the company Block.One, which will then be used at their discretion. However, don’t take my word for it, check out their website frequently answered questions section https://eos.io/faq.html.
So why buy the ERC-20 tokens if they don’t have any guaranteed uses? Good question. Surely, if ones intentions were solely to build a business on the blockchain, one would go straight to, the already built, and open sourced, Steem blockchain and use their smart media tokens for free. Or perhaps if your intention was to get into a coin offering to make some money by speculating at the success of an idea, then you’d chose a company that was going to run the idea. However, we know EOS founders are retaining 10% of the tokens for the company Block.one, so we can presume they potentially have some value.
Our understanding is that when the last ERC-20 token is sold, all ERC-20 tokens will then transfer to EOS tokens and the Genesis block, which is the parent block of a blockchain, will contain the details of the EOS tokens. From that point the “operating system” will be available for people to use and modify as they see fit. Just to be clear, in case anyone missed the point, it will NOT be Block.one that launches the system, they simply supply it and it’s up to creative people to launch a blockchain or chains. That being said there does appear to be plenty of people in the EOS community ready to participate at development level, and it seems highly unlikely a blockchain wouldn’t launch.
Another use for the EOS tokens on the platform will involve Delegated Proof of Stake (DPOS), which is a fairly confusing process for many to grasp, mainly because it’s not yet widely adopted. If you aren’t familiar with how, DPOS works, then I highly recommend this Steemit article by Dan Larimar himself. https://steemit.com/dpos/@dantheman/dpos-consensus-algorithm-this-missing-white-paper
It’s worth noting that ERC-20 tokens have not been offered to American citizens. According to their website:
“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.”
The logic behind this appears to be mitigation of potential problems over future legalities in regards to what actually is being offered. This strategy of limiting offers to certain countries is becoming more common as Entrepreneurs try to protect themselves while waiting for regulators to catch up.
For a more detailed analysis of EOS and the EOS.IO operating system, check out their white paper here https://github.com/EOSIO/Documentation/blob/master/TechnicalWhitePaper.md
The technology behind EOS is based on previous successful projects, which is a strong point. Probably the biggest weakness, at this stage, is the lack of certainty in regard to exactly what will happens when ERC-20 tokens transfer to EOS tokens. It appears the value of these tokens hinges on third parties launching a blockchain or chains that become widely adopted. Based on the information available, purchasing ERC-20 tokens is very high risk and most purchasing them likely do not fully understand their workings. However, this is nothing unusual in the current state of crypto investment and high risk is often taken with the hope of high reward.
(eos.io) Scalable decentralized applications can now be built and tested in a public environment.
- Open source
- Free market decentralisation
- Sale of tokens that have no rights, uses, or purposes.