EOS – A blockchain operating system

keerthi

Until recently, most of the blockchain implementations targeting cryptocurrencies have been using Proof of work (POW) as consensus mechanism. But now, everyone is getting mindful of issues like scalability and extravagant usage of computational resources, which come with using POW. Proof of Stake (POS), is taking precedence over POW and EOS is one of the blockchain proposals, making use of variation of POS – Delegated Proof of Stake (DPOS). In this post, we discuss features of EOS & DPOS and how it would lead for a better blockchain industry of applications.

To start with, EOS is not a blockchain. It is a blockchain operating system. That specification alone changes lot of things. If we consider Ethereum, its like a computing resource by itself with inclusion of EVM (Ethereum Virtual Machine) on every node that wants to participate in the network. As blockchain operating system, EOS would play 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 –

  1. Zero Transaction fees.
  2. Ability to support millions of transactions per second.

Delegated Proof of Stake (DPOS)

Before we delve into the features of EOS, let’s understand POS & DPOS. In POS, basically there are 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. In the sense that, instead of validators there are 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 blockchain integrated with EOS. Each block producer will be given 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. That would take 1.5 seconds approximately. 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.

Features of EOS

  • Blockchain is no more the “newbie”. Right now, is the time to concentrate on nurturing it to suffice real world applications. Scalability is going to be the cause many of the current implementations would go down.As time goes, POW systems would incur high transaction fees and low throughput. EOS has made this their first effort and they support both horizontal and vertical scaling. Horizontal scaling includes support for parallel processing of smart contracts. Vertical scaling includes transactions processed for second.
  • Easy maintenance. Any issue with a node/faulty DAPPs (Decentralized Application) can be mitigated by freezing that specific block producer or account. Block producers have the ability to freeze accounts. They can also reject transactions based on computational cost. Suppose if a transaction is taking too much time and resource to execute that would not be accepted by most of the block producers. This has avoided the use of “gas” kind of additional parameters like in Ethereum.
  • All transactions need to append a hash of constitution along with their signatures. A constitution is general jurisdiction rules agreed upon by all token holders in EOS blockchain. This would enforce that all users of the application are binded to a specific governance.
  • Community benefited applications is another innovative idea in 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.
  • EOS software allows any full node to run 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 incase of downtime.
  • Nil transaction fees. In general, users of blockchain applications are charged with 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 doesn’t depend on the token value. This would instigate new monetization techniques for the blockchain applications instead taxing users.
  • Ability to Rent blockchain bandwidth. Token holders can rent unconsumed bandwidth, which will be allocated by block producers to other applications accordingly.
  • EOS blockchain can be configured such that, there is a cap for rewards. Ex: We can set annual token release count not to exceed 5%.
  • EOS is built to support multiple virtual machines. Currently, Web Assembly (WASM) and Ethereum Virtual Machine (EVM). This would enable any one to run their smart contracts on other platforms like Ethereum or to communicate with applications on EOS seamlessly. This leads to inter blockchain communication.

Those are the good, 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 is kind of combination of both platforms.

EOS ICO is still going on. Its going to open until June 2018. For now, EOS tokens are distributed in the form of ERC-20 tokens on ethereum blockchain. 2 million tokens are sold each day. Depending on the sale in a particular period and the amount of ether you put in, the number of EOS tokens you obtain might differ.

Why some may say “NO” to EOS

  • Negative co-ordination. EOS is extremely reliant on voting mechanism, which might get dissolved by many issues like:
    • Low vote count – Unless there are good number of nodes malicious block producers can take hold of the blockchain.
    • Separation of interests. Token holder’s interests might not be perfectly aligned with that of user’s interests.
  • All transactions are billed a fixed computational bandwidth irrespective of the time to execute.
  • Not a good way of solving “Nothing at stake” problem. The punishment for malicious utilization is just down vote from being a block producer. They can again participate in the election process later on. Some better way to do this might keep everybody in check like Ethereum Casper where they loose all their stake when they try to validate invalid block.
  • Final find. EOS is just a blockchain operating system. It mainly depends on adoption by users for building blockchain applications. If no one starts using it, then of course it would be pushed back into the blockchain history. There are many other blockchains like Ethereum and Cosmos which might have implementations of POS out earlier than EOS.

Competitors 

Ethereum, Waves, Cosmos (Tendermint) and Lisk

As a final say, 2018-19 is going to be a period of experimentation of blockchains with respect to scalability. We never know which one would swim through the competition. But knowing these technologies, helps our thought process through a much cleaner perspective.

Related Links

  1. https://github.com/EOSIO/Documentation/blob/master/TechnicalWhitePaper.md
  2. https://blog.cosmos.network/consensus-compare-tendermint-bft-vs-eos-dpos-46c5bca7204b
  3. https://www.coindesk.com/eos-unpacking-the-big-promises-behind-a-possible-blockchain-contender/
  4. https://medium.com/@EthereumRussian/ico-review-of-eos-eos-tokens-on-ethereum-blockchain-8984c975cd48
  5. https://steemit.com/eos/@trogdor/introduction-to-eos-the-epic-blockchain-operating-system
  6. https://steemit.com/eos/@kevinwong/eos-a-blockchain-operating-system
  7. https://www.weusecoins.com/what-is-eos/

 

 

 

 

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