Believe it or not, EOS, the 5th ranked cryptocurrency in the world with a $15.5 billion market cap and a value which already exceeds that of the aerospace giant SpaceX has still not been officially launched. So what’s going on with this ten-month-old baby crypto, and is it really as great as the experts say?
If you are one of the millions who religiously follows the prices of the main cryptocurrencies, whether you are a crypto owner and user or not, you cannot have missed EOS. Despite only arriving in late June 2017, EOS is already a Top-5 ranked crypto. It went from $6 to $21, a 250% increase, in just nine days last month, and has been on an almost constant upward tear since early April.
EOS market cap is currently $15.5 billion, making it more valuable than such long established companies as Europe’s no.1 supermarket chain Carrefour, French utilities giant Veolia, or even Elon Musk’s space exploration corporation SpaceX. However, the most surprising – some might say infuriating thing – about EOS is that its blockchain will not be launched until June 2, even though the EOS cryptocurrency coins – which are also known as EOS – have been available for ten months.
Why Is There Such A Buzz Around EOS?
The EOS Initial Coin Offering (ICO) was the fourth most profitable cryptocurrency fundraiser of 2017, raising the equivalent of $230 million. However, the amount raised could actually have been much, much higher: According to several specialized sources, if EOS had used Ethereum as its currency of choice, it would have raised 5,148,884 of Ether, which would have been worth around $3.5 billion.
Because of the excitement the EOS ICO generated, there is a real buzz about the official launch on June 2. This excitement has increased in recent weeks, due to EOS continuing to climb in value, and maintain its position in the crypto Top-5.
Of course, there is always a fear of failure, and despite the enormous attractiveness of this cryptocurrency, the worry is that because EOS has already achieved a high level of success, anything but an ultra-positive official launch could be detrimental.
However that fear isn’t really justified; should EOS hit a valuation slump leading up to its launch, it could affect investment slightly, but the reality is EOS is hardly likely to see a dip in value as it heads into its official launch, if anything a significant upward surge in its price should be expected.
What Makes EOS So Appealing?
The EOS project is one of the most ambitious of all cryptos, and one of its major achievements already has been the development of effective communication. The thinking behind the EOS project is based on the (correct) assumption that major cryptocurrencies such as Bitcoin and to a lesser degree Ethereum have not been created to cater for use on a massive scale.
This is partly true, because users of both cryptos are regularly struck by their poor scalability. What this means is neither Bitcoin nor Ethereum are able to respond to a rapid increase in their demand. Ethereum, for example, cannot handle more than 15 transactions per second, while Bitcoin performs even worse, with just seven per second. So it’s not unusual for a Bitcoin transaction to take several hours before total completion.
By comparison, the goal of EOS is to create a network that supports decentralized applications on a commercial scale. Facebook for example needs to manage about 175,000 requests per second. The team behind EOS claim that their protocol can already cater for a Facebook-type demand, and will eventually be able to handle more than a million transactions per second.
What Is Under The EOS Bonnet/Hood?
The technology behind EOS is based on something called the Delegated Proof of Stake (DPoS), which is a transaction validation process that opposes Proof of Work (PoW), which is used by Bitcoin and Ethereum, and Proof of Stake (PoS) on which Dash and NEO are based. In layman’s terms, the DPoS works like a democracy; each EOS user can vote to elect one of the 21 delegates who will then be responsible for validating transactions on the network in exchange for cryptocurrencies. If one of them doesn’t shape up, they can be dismissed. This system has the advantage of being energy efficient, unlike the Bitcoin PoW which uses the computing power of thousands of computers.
As of now, we don’t actually know the identity of the 21 delegates who are being voted on. We do know that Bitfinex, who were the world’s first cryptocurrency trading platform, announced on April 23 that it was bidding to be one of them. The bidding process to become a delegate resembles a presidential campaign: the bidding company is committed to proving to the EOS community that its interests converge with their own, and that it has equipment powerful enough to support the network.
The EOS project is also supported by Block One, a company which has also been working with Ethereum for several years, and has as its technical director the vastly experienced and highly respected Dan Larimer, the man behind Bitshares and Steemit.
Larimer is a longtime critic of the limitations of Bitcoin, and reputedly called out BTCs founding father Satoshi Nakamoto in 2010. Larimer questioned the ability of the Bitcoin protocol to handle a large number of transactions, at which Satoshi Nakamoto supposedly replied enigmatically:
“If you do not believe me, I do not have time to convince you, sorry.”
As Satoshi Nakamoto would subsequently vanish into thin air, maybe he was telling the truth and he really didn’t have the time. Dan Larimer is still very much with us, and with him, Block One and the current team driving it forward, EOS will no doubt ace its official launch and remain a valid cryptocurrency for many years to come.