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What is EOS.IO? Being the “most powerful infrastructure for decentralised applications” is a very bold claim, meaning EOS.IO has a lot show for. But in a world full of buzz words and crypto hype, what significance does this claim really have? And better yet, does EOS.IO have the disruptive capabilities required to cause meaningful change for its users?
Termed as an “Ethereum killer” capable of providing the underlying bedrock for a new ecosystem of decentralised applications, the hype behind EOS.IO prior to its launch was immense. In 2018, after a year-long initial coin offering (ICO), it is no surprise that a staggering $4.1 billion was raised through the issuance of one billion EOS tokens – trumping all other prior ICOs by a clear and convincing margin.
The significant issuance of one billion tokens was to ensure widespread distribution of the native cryptocurrency, EOS. People use this token to pay for the costs of operating its blockchain.
Since its launch however, it hasn’t been all smooth sailing for investors. When its mainnet launched in June 2018, one EOS was worth approximately USD $13.89. It is now around $2.60, a significant discount to its prior highs.
The EOS.IO platform is designed to facilitate the operation of applications that exist on a blockchain network, as opposed to a single computer. Labelled as “decentralised applications” or “DApps”, these applications historically operate on conventional blockchains such as Ethereum (ETH), but are plagued by performance issues as these platforms are not optimised to handle transactions and operations in large volumes. To address issues of this nature, the platform was designed with deliberate features that supported the operating and maintenance of applications.
As such, to rectify challenges of high transaction volumes, the platform enables millions of transactions per second, while also eliminating fees charged to users making transactions. To secure its blockchain, EOS.IO employs a delegated proof-of-stake (DPoS) system which dictates who can create the next block on its blockchain. As such, those who own the token can help operate the network and take part in governing the platform. To this effect, EOS.IO takes a relatively more proactive approach to governance, enabling users to vote and dictate software rules. As such, owners of the token and block producers have say in changing the “EOS Constitution”, a governing document that codifies the rules between EOS.IO users.
With these in mind, the value of EOS stems from its role in powering DApps and the governance of its network. Firstly, the use of smart contracts in DApps requires such applications to use EOS to pay the blockchain in order perform the necessary computations. Further, as mentioned earlier, holding tokens gives users the right to vote on topics of governance – the more EOS a user holds, the larger voting power they hold.
EOS is a token that gained tremendous attention during its ICO, raising over $4 billion over a one year period – the largest ICO experienced to date. Compared to mainstream cryptocurrencies such as Bitcoin and Ether, it has a minimal market capitalisation. With such a large following base however, the token is widely traded with high liquidity and market depth.
Investors should also note, there is no limit to the creation, and therefore supply, of the tokens. As such, in every instance a block is created, new coins are released to the market. As dictated by software rules, the amount of EOS coins within the market can be increased by 5% each year. Investors should therefore be aware that these factors may put inherent downward pressure on the price.
Look no further, Coinstash is one of the few Australian platforms that allows its users to buy EOS with AUD. We have deep liquidity into USD markets, therefore the ability to provide our users with some of the best prices available.
About the author
Ting is a finance professional and an accomplished investor. Ting is well-conversed in financial markets, as well as having a background in taxation and law. Having previously worked for a top-tier accounting firm and an US-listed fintech company, Ting decided to pursue his passion in cryptocurrency in 2017 by joining forces with high school friend Mena.
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