EOS intends to become a decentralized operating system, capable of supporting industrial level DAPPs. Considering the limited capability of public blockchains, EOS sounds impressive. It claims to conduct millions of transactions with little to no transaction fee. They claim to solve the biggest issue in the crypto space – scalability. How are they going to achieve that? In conventional banking system, VISA manages 1667 transaction per second. On the other end, Bitcoin hardly manages 7 transactions per second. The limitation is because public blockchains like bitcoin require total consensus across nodes.
EOS employs DPOS model
EOS employs Delegated Proof of Stake (DPOS) to replace the need for total consensus across nodes. You need to have a grasp of POS model to understand Delegated Proof of Stake. In POS model, a block producer is chosen from a pool of stakers depending on selection algorithms. The amount of tokens staked and time allowed is taken into account. However, in DPOS model, the block producer is chosen based on votes or consensus. Anyone holding the tokens can choose who the block producer should be for the particular block. 21 blocks are produced following one round of voting. 20 blocks are made by the most voted 20 producers. The final block is produced by the random selection based on number of votes received by other producers. Hence, every producer has a fair chance of making the block in the democratized DPOS model.
Onus on block producers
These producers are incentivized to work honestly. If transparency is compromised, they can vote out by users during a voting cycle. There is no need for competing with other nodes. Users can work together to swiftly validate each transaction. To keep the chain active, block producers need to be active as well. Any producer who is not producing a block in the last 24 hours can be voted out. Rather than reaching consensus in every node as in case of Bitcoin, EOS uses a dedicated pool of 21 validators to reach consensus much faster.
The only drawback is it does compromise on decentralization to a certain extent. In addition, you only need 50% of the producers to take control of the network. In this case, that is a mere 11 nodes. Whereas in Bitcoin, you require millions and millions of investment to successfully mine and test the network’s robustness. DPOS is only aimed at improving the speed and efficiency of transactions.
Future Price Predictions
Future price predictions for EOS tokens put experts in splits. Though everyone is convinced on a bullish trend ahead, their views on future price predictions differ widely from each other. WalletInvestor predicts EOS price to reach over $6 in 2020 and up to $30 in 2025. Trading Beasts predicts $4 by 2020 and $7 by 2022. Digital coin price predicts EOS to reach $8 within 2020 and $18 by 2025. As a matter of fact, EOS is trading in the $2.5 – $3.0 range at the moment. Expect a big splurge by the end of this year.