Launched in June 2018, EOS is a public blockchain that was designed to allow developers and businesses to build decentralized apps (dApps) and other large-scale applications on its platform. EOS.IO is the software architecture; EOS coin is the native crypto.
The protocol’s aim is relatively straightforward: to have its blockchain be much easier to use than its competitors, and provide resources to aid developers in building their applications.
EOS coin supports the EOS blockchain. To use the network’s resources, developers must hold EOS tokens and build apps on the platform. Keep reading to learn more about trading EOS.
How Does EOS Work?
EOS aims to be easier to use, faster, and ultimately bigger than its nearest competitor, Ethereum. EOS.IO is designed to work like a computer’s operating system, allowing businesses and users to create blockchain-based applications in a way that’s similar to web-based ones.
EOS in Action
In order to build on the EOS platform, developers need access to three types of resources: computation, bandwidth, and state storage. Note that these are analogous to CPU, disk space, and RAM on a traditional computer.
• Computation is the processing power it takes to run a dApp.
• Bandwidth is needed for sending data through the network.
• State storage is used to store data on the blockchain.
Interestingly, developers can use EOS crypto to pay for these resources, but users don’t need to pay for using the dApps.
This ease-of-use is one way EOS hopes to remedy some of the persistent problems with the rapidly growing dApps ecosystem — like limited resources that contribute to transaction bottlenecks. By using a more innovative consensus mechanism called delegated proof-of-stake (dPoS), EOS.IO promises to offer more flexibility, usability, and scalability.
Delegated proof-of-stake works by allowing users to allocate their crypto to the EOS network, which gives them the ability to vote for block producers.
The block producers with the most votes are delegated to produce new blocks and confirm transactions. If a producer has not produced a block within 24 hours, they are removed from consideration until they tell the blockchain they are ready to start producing blocks again. This is done to make sure the verification of transactions is done in an efficient manner and blocks are not missed.
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DPoS has become a popular consensus mechanism that is used on other cryptocurrency platforms such as Avalanche (AVAX), Solana (SOL), Polkadot (DOT), PancakeSwap (CAKE), and others.
Advantages and Disadvantages of EOS
What are some of the pros and cons of the EOS network? Let’s dive in.
The EOS DPoS consensus mechanism enables the platform to function in a secure way, while supporting the development of dApps through speed and scalability to allow many users on the platform at the same time.
The EOS platform is able to process thousands of transactions per second — far faster than Ethereum — without incurring any fees.
Another competitive EOS feature is their free transactions. This means users do not have to pay any fees to transact nor do developers have to incur fees to build on the platform.
A drawback to the EOS DeFi platform is that it has been prone to hacks in the past. And while that’s not uncommon in the DeFi space, the loss of $5 million in user tokens in December 2021 was a blow to the network.
In addition, like many other cryptocurrencies, EOS cryptocurrency experiences a lot of price volatility.
It also faces competition from other cryptos that have similar scalability goals.
• The dPoS mechanism is efficient and helps with scalability.
• Vulnerable to security breaches.
• Faster and cheaper to process transactions compared with Ethereum.
• Subject to price swings and crypto market volatility.
• No transaction fees for users.
• Faces stiff competition from other platforms with similar goals.
Who Created EOS?
Dan Larimer and Brendan Blumer are the co-founders of Block.one, a tech company that produced the EOS.IO software protocol, paving the way for the launch of the EOS blockchain in 2018. (Larimer is the former chief technology officer of Block.one and Blumer is still its CEO). They designed the EOS platform to support smart contracts and decentralized applications.
Larimer is a blockchain entrepreneur who also founded BitShares, a decentralized cryptocurrency exchange (DEX), and Steemit, a community-based blockchain.
Larimer is also credited with having innovated the delegated proof-of-stake consensus mechanism used in the operation of the EOS.IO blockchain.
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Why Does EOS Have Value?
EOS offers an open-source blockchain platform that allows developers to build complex apps that would be more difficult to execute on the Ethereum blockchain.
EOS supports apps on its platform in the gaming, decentralized finance, exchanges, and gambling categories. As these applications become more in-demand and require additional capacity, they will need to rely on a blockchain to allow smooth operations and to support growth.
Decentralized apps run on efficient smart contracts. These decentralized apps need developers to purchase and stake EOS tokens to run the smart contracts. The EOS blockchain was created to serve the development of applications in these different categories. This utility gives EOS its value.
Price of EOS
EOS had an unusual initial coin offering (ICO) that lasted a year, and ultimately raised some $4 billion. The EOS coin reached its peak of about $22 in April 2018, but has not advanced out of the single digits in some time. As of April 20, 2022, EOS was worth $2.80.
EOS is the 46th biggest cryptocurrency, with a market cap of $2.76 billion.
Why Use EOS?
EOS can be a favorable option for developers who want to build decentralized apps. While developers can seek out other blockchain platforms, EOS may be a top preference since it offers scalability solutions and no cost to users.
EOS can be an appealing crypto investment as well. Beginner investors who do research and determine that EOS has the possibility of sticking around as a blockchain solution for the development of decentralized apps along with bringing new innovations to the crypto market may want to “hodl” crypto, as they say in crypto terms, for the long-run.
How Can I Buy EOS?
Research the platforms that enable EOS trades, and be sure to review how crypto exchanges work, as well as any fees that may apply.
Step 1. Choose an exchange and fund your account.
Set up a crypto trading account and then fund your account with a secure wire transfer from your bank, or even with a credit or debit card transfer (but check with your bank in the case of restrictions). Fees may apply.
Step 2. Set up a wallet to store your assets.
Just as you keep ordinary money in a physical wallet, cryptocurrencies are held in digital “wallets.” You’ll want to find a crypto wallet that supports EOS.
Note that some crypto exchange accounts come with a “custodial wallet,” a form of storage which exists only on that exchange. Sometimes custodial wallets come with restrictions about moving your crypto off-platform.
Step 3. Trade EOS.
Once you’ve executed the trade, you can transfer your holdings to your wallet. You may want to leave your holdings in your account if you plan to keep trading.
Sharing Personal Data
Different trading platforms require different forms of identification. Some exchanges adhere to Know Your Customer (KYC)
rules, a set of standards that require investors to disclose certain information. Others may allow anonymous or P2P transactions.
Similar to trading securities, there are fees to consider when trading crypto
. Be sure to research the associated costs that may come with trading crypto on one platform versus another, or using one form of payment versus another.
How to Sell EOS
Once you’ve decided to sell your EOS, the next step is deciding whether you plan to cash out for a fiat currency like U.S. dollars (USD) or trade another type of crypto.
Step 1. Decide what to sell.
If you’re exchanging EOS for USD, the steps may be different than if you’re buying another form of crypto — or you may have to complete a more extensive KYC identification.
Step 2. Find the best price.
Crypto prices fluctuate by the minute, so do your research beforehand so you know a good offer when you see one.
Step 3. Sell EOS.
Complete the trade and move your crypto (or cash) to your wallet, unless you plan to keep trading on the exchange.
Step 4. Keep taxes in mind.
Remember that crypto gains are subject to taxes. Be sure to consider the tax implications of selling EOS coin, and consult a professional as needed.
💡 Learn how you can turn losses into a tax benefit with crypto tax-loss harvesting.
Does EOS Have Staking?
Yes. EOS provides users with staking tokens to vote for block producers or access network resources. In order to stake EOS, you must create an account on the platform.
When making transactions, users must use two resources, CPU and NET. Users stake EOS to increase the central processing unit (CPU), the mechanism that processes programs on the platform. The higher the CPU, the higher the processing power and better performance.
NET represents the space on the blockchain network that is dedicated to your transactions as they are being recorded on the blockchain. EOS staking is done in lieu of users paying transaction fees, with users utilizing CPU and NET to perform transactions on the blockchain.
The EOS blockchain platform provides scalability, high speed and resources for developers to build on its platform. The EOS network allows smart contracts which enables decentralized applications and other solutions to be developed easily on the EOS blockchain for individual users and businesses. The end-goal of EOS is to allow people to use blockchain technology more freely by providing an intuitive way for anyone to use the platform, which is how EOS wants to be seen in the market compared to its competitors.
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