EOS is a cryptocurrency that runs on its own blockchain. Its blockchain is open source and powers additional smart contracts and decentralized apps (dapps). Notably, there are no transaction fees for sending and receiving EOS.
EOS operates using its own open-source blockchain known as EOSIO, which was developed by the company Block.one. It ranks as a top 30 cryptocurrency by market cap, which was $3.7 billion as of July 2021. There are more than 955 million EOS coins in circulation.
What Is EOS?
EOS is a cryptocurrency that runs on its own blockchain. EOSIO is the open-source blockchain still in development, which is led by the company Block.one. EOS is similar to the larger currency and blockchain Ethereum in that its blockchain enables other smart contracts and decentralized apps in addition to its own currency. But unlike Ethereum, EOS transactions don’t require any fees.
Bitcoin network fees and Ethereum gas can be expensive, and transaction times can slow during periods of network congestion. EOS aims to provide a faster transaction time with no built-in fees.
EOS officially launched in June 2018, based on the EOS.IO Technical White Paper v2. The EOSIO software and blockchain power other cryptocurrencies, such as Everipedia (IQ), though the most noteworthy coin on this blockchain is EOS itself.
Special Features of EOS
The main unique feature of EOS is that it doesn’t charge any transaction fees. Instead, it rewards miners with newly created EOS tokens. This means there is built-in inflation in the EOS ecosystem. Those who stake EOS tokens provide stability to the currency while others are mining and transacting.
“We are an entirely stake-based system,” Bart Wyatt, an engineer for EOSIO, said in a YouTube video in May 2018. “So, we still economically protect the network by requiring you to stake tokens and those tokens never leave your possession. They simply cover the cost…of the resources that you’re using at the time. Once you stop using the resources, you get those tokens back, as opposed to it being a permanently charged fee to your account. In a way, that creates a market where you never have to pay EOSIO tokens in order to have access to those shared resources.”
Because of how this works, EOS token holders share the fees, as the newly created tokens dilute the existing market. Running a fee-free network may make EOS attractive to a wide number of users.
|Already Mined/Total Supply of EOS Tokens (As of July 28, 2021)||955.6 million tokens|
|Special Feature||No transaction fees; runs on its own blockchain|
How To Mine EOS
EOS doesn’t use a proof-of-work (PoW) mining system like Bitcoin or Ethereum, where you can earn fees for running a miner. Instead, EOS relies on a system called “delegated proof-of-stake (PoS).” This relies on block producers voted on by the network to handle the blockchain operations on its behalf.
While this centralizes some of the blockchain operations more than competitors, it also enables better scale and higher transaction volumes than some others. It’s also more environmentally friendly, as fewer computers work and consume energy to keep the network running.
However, there may be a conflict of interest, as for-profit Block.one has a big influence over who does the work and gets the payout of new EOS tokens. Block.one is a major owner of EOS tokens and therefore gets the most votes on future block producers. It can even vote for itself, awarding itself a big piece of the pie for transaction fees.
How To Buy and Invest in EOS
If you want to buy or invest in EOS, the easiest way is through a major cryptocurrency exchange. EOS is widely supported, so it’s easy to buy it using exchanges like Coinbase or wherever you keep your crypto portfolio.
If you buy EOS, like any other cryptocurrency, you’ll need a cryptocurrency wallet. Due to its popularity, you’ll find EOS is generally well supported by a wide variety of software and hardware wallets.
Use strong passwords and good digital security habits to keep your cryptocurrency safe.
EOS transaction times are nearly instant, according to cryptocurrency exchange Kraken. That’s a significant benefit over competing tokens and coins that can take minutes or hours to complete. The EOS delegated PoS system doesn’t require any confirmations. As soon as the transaction hits the network, it’s live on the blockchain. That takes place in the blink of an eye.
EOS is a well-trusted cryptocurrency, as far as cryptocurrencies go. However, it has a few stains on its permanent record.
The company behind EOS, Block.one, is registered in the Cayman Islands and collected more than $4 billion when EOS tokens started going public in June 2017. The U.S. Securities and Exchange Commission (SEC) ordered Block.one to pay a $24 million fine for running an unregistered securities sale through the EOS initial coin offering (ICO). Today, however, EOS is up and running unencumbered, with this lawsuit seemingly in the past.
Also noteworthy is Block.one’s connection to PayPal co-founder Peter Thiel. In May 2021, Block.one announced a new subsidiary, Bullish Global, that focuses on a new blockchain-based cryptocurrency exchange called Bullish. Thiel, along with several others, invested in the new subsidiary. After the announcement, the price of EOS spiked, reaching $14.37 late in the day on May 11, 2021. Just two months later, the price was back down to a little under $4 in late July.
GitHub. "EOS.IO Technical White Paper v2."
YouTube, EOSIO. "How Are Transactions Feeless on EOSIO?"
Kraken. "Cryptocurrency Deposit Processing Times."
U.S. Securities and Exchange Commission. "SEC Orders Blockchain Company to Pay $24 Million Penalty for Unregistered ICO."