EOS.IO software by block.one wants to “Decentralize Everything”. Mr. Larimer has already put two notable blockchain systems live: BitShares and Steem. Both of these systems remain online and recently benefited from increased interest in the crypto-asset space in general. To this date, EOS has raised $200 million in revenue from token sales.
Brock Pierce, co-founder of block.one, told Reuters that EOS is designed to be a foundation for blockchain business applications. Attendees heard a lot about EOS at last month’s Consensus conference put on by Coin Desk. Block.one claims its platform has eliminated transaction fees and can process millions of transactions per second.
The startup, which recently started selling the EOS token to create a decentralized distribution of tokens to be used with the EOS.IO software has introduced the concept of automating business processes, monitoring assets, and creating multiple applications based on prior technology introduced by Mr. Larimer, who is the inventor of the “Proof of Stake” and the “Decentralized Autonomous Corporations” concepts.
According to its website,
(…) block.one provides end-to-end solutions to bring businesses onto the blockchain from strategic planning to product deployment.
Block.one CEO, Brendan Blumer, has been involved in the blockchain industry since 2014. Mr. Blumer’s businesses include virtual currency trading in MMORPGs in the US, okay.com in Hong Kong and 1Group in India.
Partner Brock Pierce has raised $200 million for companies he founded, according to his biography. A former child actor, the well-connected Pierce founded Internet Gaming Entertainment in 2001 and ZAM two years later.
Many of Pierce’s companies operate in the virtual currency space. Active in the Bitcoin blockchain ecosystem for nearly a decade already, and a former Director of the Bitcoin Foundation and founder and managing partner of fintech focused venture capital firm Blockchain Capital, Mr. Pierce mentors startup accelerators.
Pierce serves as a founder, board member or advisor at several bitcoin companies: GoCoin, Tether, ZenBox, Blade Financial, Expresscoin, Noble Markets, BitGo and ChangeTip.
Partner Ian Grigg is a financial cryptographer working on cryptographic ledger platforms for over 20 years. He is known for naming the Ricardian Contract, “a method to identify and describe issues of financial instruments as contracts”.
Mr. Grigg’s focuses have revolved around digital contracting. Ricardian Contracts “express all the salient details of an issuance as an unforgeable contract, unforgeably linked into every action within a payment system.”
The Ricardian white paper contract goes on: “By translating the institution of the contract into the digital domain, we build upon centuries’ and even millennia’s worth of experience in documenting, sharing and disputing the meaning of agreements between parties.”
The Ricardian Contract allows clarity in legal and customer support questions. “The user benefits from lower overall costs, and better presentation of information, within a more consistent framework.” Mr. Grigg’s work on triple-entry accounting incorporates Signed Receipt and standard, double entry bookkeeping.
Mr. Larimer is known for his work with BitShares and Steemit. He is credited with inventing delegated proof-of-stake and the concept of decentralized autonomous organizations. (modified by Ethereum)
BitShares’ market-pegged asset platform was described as a hedge against cryptocurrencies by placing fungible fiat derivatives backed by cryptocurrency on a blockchain. Larimer left the project due to lack of funding. In 2016 he joined Steemit, where he created a social content platform based on blockchain.
Larimer says BitShares’ innovation lays in its vertical scalability, which allows transactions to be processed up to as many as 100,000 per second. Mr. Blumer cites horizontal scalability, parallel execution of smart contracts and the simultaneous processing of transactions as EOS strengths. Block.one likely represents the most professional outfit with which Larimer has worked.
The software is called ‘EOS.IO’. There is then the ‘EOS Token’ and the ‘EOS Platform’. EOS’ “asynchronous proof-of-stake blockchain” platform is designed to enable applications as user-friendly as centralized alternatives. Making use of delegated proof-of-stake (DPoS) consensus protocol, EOS describes its project as a republic wherein community members of the community delegate verifying transactions to elected block producers.”
Transaction as Proof of Stake (TaPoS) will be implemented on EOS.io software to require that each transaction includes the hash of a recent block header. This hash serves two purposes:
- prevents a replay of a transaction on forks that do not include the referenced block; and
- signals the network that a particular user and their stake are on a specific fork.
According to the EOS white paper: “Over time all users end up directly confirming the blockchain which makes it difficult to forge counterfeit chains as the counterfeit would not be able to migrate transactions from the legitimate chain.”
The EOS.io software ensures there are no gaps in its transaction history by assigning a sequence number to every message delivered to every account via “proof of completeness.”
The project’s white paper, available on GitHub, notes: “A user can use these sequence numbers to prove that all messages intended for a particular account have been processed and that they were processed in order.”
EOS, like many proposed distributed ledger platforms, intends to integrate various blockchain platforms. The startup intends on doing this by ensuring clients that they do not need to process all transactions.
After all, an exchange only cares about transfers in and out of the exchange and nothing more,” reads the white paper. “It would also be ideal if the exchange chain could utilize lightweight merkle proofs of deposit rather than having to trust its own block producers entirely. At the very least a chain’s block producers would like to maintain the smallest possible overhead when synchronizing with another blockchain.
In implementing Merkle Proofs for Light Client Validation (LCV), EOS hopes to enable “the generation of relatively light-weight proof of existence that can be validated by anyone tracking a relatively light-weight data set.”
The EOS white paper describes solving latency problems by breaking blocks into “cycles” divided into different threads and transactions containing messages for delivery. “This structure can be visualized as a tree where alternating layers are processed sequentially and in parallel,” according to the white paper.
The EOS.IO software is designed from experience with proven concepts and best practices, and represents fundamental advancements in blockchain technology. The software is part of a holistic blueprint for a globally scalable blockchain society in which decentralised applications can be easily deployed and governed.
“Every single account operates like its own chain, and supports interoperation between all other accounts without locking, so determinism is preserved,” according to Mr. Larimer.
Mr. Larimer calls EOS an “incremental improvement” over his previous projects, describing it as a “general case” of BitShares and Steemit. EOS could support applications like Bitshares and Steem, but it’d be up to those teams.
Now, whether or not EOS will offer infinite scalability and free transactions has yet to be seen – after all, there isn’t much code to go on. As for the latter claim, a basic foundation of pop-economics is that there is no free lunch. The question for EOS, then, and any blockchain project, is whether or not what it offers outflanks its predecessors and contemporaries.
Thanks to its experienced team, and its track record of success, as well as in-production use cases for the technology itself, we give EOS a 6.75 out of 10.
EOS digital token distribution opened up Monday, June 26. EOS’ token distribution follows a participation model that will transpire over the course of one year, “creating the fairest token distribution project on Ethereum to date,” according to the company. Pierce told Reuters that
The goal of the EOS token sale is to make it truly democratize and provide equal access to everyone (…)
Mr. Blumer said: “To ensure inclusivity, EOS
To ensure inclusivity, EOS are not sold for a fixed price, but sold at a price determined by market demand; this mimics mining, but does not offer unfair advantages to large purchasers.
The EOS token sale, which is set to take place over the span of nearly one-year on the Ethereum blockchain, will see 1 billion tokens allocated. 20 percent of the EOS tokens will be sold during the first days, with 70 percent split evenly into 350 consecutive 23-hour periods of 2 million EOS tokens per, beginning July 1. The 10 percent leftover, reserved for block.one, cannot be traded or transferred on the Ethereum network. According to Blumer, EOS will be priced on market demand.
The crowdsale has appeared in New York Times, Reuters and VICE and other noteworthy outlets, as well as hosted info sessions, sponsored events, given out free merch, and advertised on Time Squares jumbotron. Like so many blockchain-based token sales, EOS today is little more than a concept, a white paper, and new code.
Critics levy criticism at Larimer for having left his prior projects, but the developer was free to leave the projects on his whim. He has said publicly that building up the platforms to be self-sustaining was his goal on both platforms before handing over responsibilities. Faces of developers, even on the bitcoin blockchain, often change.
Criticism of DPoS paints it as a winner-take-all arrangement which results in ‘whales’ who can control the system. Some compare it to proof-of-work in bitcoin, where holders of more currency may act as an ‘elite’ in the system.
Bitcoin and Ethereum can be thought of as Delegated Proof of Work where miners elect mining pools, Mr. Larimer told Hacked.com. Less than a dozen mining pools control the vast majority of block production, but Delegated Proof of Stake ensures there are over 20 producers “mining pools” elected by the stake (“hash power”). Like proof-of-work anyone can produce blocks occasionally by voting for themselves. Steem has over 50 unique individuals who produce blocks every single day, more than Bitcoin or Ethereum.
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