EOS has been described by its promoters as “Ethereum with a new motor” – the tacit implication being that Ethereum, released back in 2015, is now somewhat out-dated.
Both projects are platforms that enable developers to build various decentralised applications, ranging from basic smart contracts to huge autonomous organisations. However, are claims that EOS is the “Ethereum-Killer” purely based on the hype surrounding its consensus protocol or does the newcomer truly offer revolutionary technology?
One of the main problems currently facing the Ethereum network is its lack of scalability, which in part comes down to its present proof-of-work (PoW) consensus algorithm. This involves mining nodes on the network verifying the order of transactions across the network and finding the hash of each block so that it can form the next part of the blockchain.
Therefore, the block time – how long it takes for a new block to be added to the blockchain – is limited by the time it takes miners to solve the hash puzzle. Accordingly, Ethereum can only process around 15 transactions per second under this system.
However, Ethereum’s developers are in the process of changing its consensus protocol to a proof-of-stake (PoS) algorithm. Due to the burden of shifting the entire network to PoS, Casper’s developers will first launch a Hybrid Casper in the coming months, which combines PoW elements with PoS ahead of full Casper adoption.
Casper’s PoS system will eventually enable certain validator nodes on the Ethereum network to “stake” ether deposits, which they risk losing if they attempt to cheat the network. These stakers are then able to validate transactions and blocks in proportion to their holding, thereby achieving distributed consensus across the network.
EOS, meanwhile, is set to launch in June with a delegated proof-of-stake (DPoS) consensus protocol. In a system that uses DPoS, token-holders can elect “witnesses” to the network who are ultimately responsible for achieving consensus.
Each token-holder is given one vote per share per witness, while the total number of witnesses is a figure agreed upon by at least 50% of voting stakeholders. However, when shareholders declare how many witnesses they want on the network they must also vote for at least that many witnesses. These witnesses are then responsible for block production and are rewarded for doing so.
The EOS network also uses “delegates”, which operate accounts that are able to propose changes to the network. These delegates decide on parameters such as block sizes, transaction fees and how much the witness reward is.
If a majority of delegates vote in favour of proposal, it then moves to a general vote of all stakeholders. Stakeholders then have a two-week period during which they can vote out delegates and reject a proposal. Accordingly, delegates have no “real” power, since anything they propose can be vetoed by majority consent.
The Bottom Line
Although Ethereum’s Casper is on its way, its full adoption is likely some way off. Therefore, if the release of the EOS mainnet goes smoothly next month, the platform might well have a tangible advantage over Ethereum. Until then, however, claims made by EOS remain unsubstantiated and its true value is unknown.
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