How many billions they collected on the ICO? Why transactions on the EOS blockchain are free and very fast? Comparison with TRON, Ethereum, IOST. Who are its competitors from the traditional software market? What algorithm does it use and how many coins do node holders earn and what is their break-even point? DAP Network is a new ICO directly related to EOS.
The hero of our review conducted his ICO in 2017, it lasted one year, ended in 2018. For all this time, he collected a record investment – 4.2 billion US money. He positions himself as a blockchain for decentralized applications. To date, the hero of our review ranks first in the number of transactions. It is very important.
It is guided by three principles: first, it is scalability; secondly flexibility; and, thirdly, ease of use. Ease of use is meant for the end user.
In 2017, when Daniel Larimer was talking about this project, that they would launch it. It is the fact that they will work on the blockchain, which puts in the head – convenience for the end user, so that he would not even notice that he is using the blockchain and attracted my attention. I participated in their ICO, largely due to the fact that they were going to do the blockchain for people.
Transactions are free. As we know, if we want to use DA (decentralized applications) on the Ether, we ourselves have to pay for transactions. At EOS, application developers take on this burden. I fully agree with the creators that as long as the user has to understand some complicated technology and still pay for all transactions, there will be no mass use. For the end user, this should be free. Only in this case there is a chance to attract millions of people to use any DA.
The main competitors are IOST with their 15,000 daily DA users. Then the Ether goes to his 30,000 active users of DA every day. Next comes the Throne, he has 52,000. These are the three main competitors. As we can see in this race, EOS is far ahead of 112,000 users who use DA on the EOS blockchain per day. Of course, there is a criticism that all these bots, all this activity is created by bots, but this is true for all projects.
Often bots generate most of the traffic, and these indicators are used for marketing purposes. From this you can not escape, this is the reality. But this is true for all projects, so all of them can probably divide this figure in half and then we will see real numbers. In other words, today, the number of users of DA – EOS is leading with a very significant margin.
As for the number of DA, on any blockchain, then Ether is still in the lead. More than half of the DA created in the first quarter of 2019 were created on the Ether. This is explained by the fact that it is much easier and cheaper for developers to create an application on Ether than on EOS. But Ether has its own problems: as we know with scalability, with speed, so the hero of our review is now leading in quality DA.
If Ether decides to solve its problems with speed, then it will become the main competitor and it has every chance to take the first place, squeeze everyone else from the market in general. Because Ether was the first, it is the most popular platform today, and it continues to be, even with all its minuses. It can not be discounted, we will closely monitor what is happening.
In addition to other public blockchains, there are also competitors from the traditional software market such as Microsoft and IBM. We are talking about B2B solutions, but most likely this is only a matter of time when such giants as Microsoft and IBM will start offering services for the introduction of the blockchain for the B2C solution, which millions of people can theoretically use to create mass DA. This should not be forgotten, since these are very powerful companies that possess resources, both monetary and professional, and the more popular the DA becomes, the larger this market becomes, the more naturally with such big desire such huge companies will go into it.
EOS uses a consensus algorithm called delegated proof-of-stake, that is, the more coins you have, the more important your vote. Blocks appear every half second, while the transactional finality is achieved in five seconds. Such high productivity is achieved due to the limited number of nodes. The total number of nodes creating blocks is 21. This is a 21 very powerful server. These nodes, in turn, are selected by voting among all coin holders. 21 elected and become creators, and all the others stand in a queue, let’s say, and wait for one of these – the top 21 will stop working, or wait for them to gain more votes and move up this ladder and will also create blocks.
Since there is no transaction fee, someone must pay these nodes, respectively, some other source of funding is needed for their work. Therefore, EOS has inflation, it is 5%. But not all this money goes to the owners of these servers. 4% goes to the fund, with this fund, by the way, an interesting story, at some point there were already coins worth about $ 200 million, no one knew what to do with this money. They voted to burn them so that inflation was less than 5%, but this did not solve all the problems at all, that is, now these 4% are still being deducted to the fund.
To date, almost $ 50 million has accumulated there. It is not clear what will happen with them, whether they will be used for further development, or for some other purposes, or they will not be burned again. There is also a proposal to put to the vote – to reduce inflation from 5% to 1%, and therefore, as these 4% go to a fund that, in principle, is not used at all, but only one percent goes to encourage the nodes that create blocks.
The remuneration for holders of nodes is 1% and is distributed as follows: 0.25% is divided between the nodes that participate in the creation (there are always 21 of them) and 0.75% is distributed among the other nodes that are waiting for their turn. They are many times more, so they earn less than those who confirm. Although they receive only 0.25%.
How much can you earn by having a node that will create blocks? So, those who are waiting for their turn, who did not get enough votes to be in the top – about one and a half thousand dollars a day, this is at the rate of five $ per coin. The nodes that confirm transactions earn approximately $ 3000 per day. The numbers are very attractive, but do not forget that they also have costs. The costs are very high for the maintenance of these servers, as they are decently powerful.
Their blockchain is growing at a frantic pace and now exceeds 4 terabytes in size and breakeven for server owners is at around four dollars per coin. If the price falls below, they begin to lose money. Even now, the price is between five and six dollars and they are in a good plus. It is for the reason that it is quite expensive to maintain the server, at the moment there are only 5 of them. This is one of the threats. Because it is difficult to call the project – decentralized.
Only five servers on which everything keeps. If they are covered up or they lie down, then the whole blockchain will evaporate. The probability of this is very small, but still five is not enough! In my opinion, it is necessary to pay the owners of servers a little more, so that they contain the whole blockchain, because now, only 5, it somehow does not creep into any gate, it is not enough!
Using EOS for developers is expensive, lacking decentralization, everything is in the hands of several people. So, they are trying to solve these problems. One solution was proposed by Daniel Larimer himself, called the EOS Resource Exchange, in essence, this is an exchange where people who have too many resources that are not used for the present moment could exchange with those they need. Thus, the cost for developers will be lower.
The second solution is called DAP Network, it is launched by LiquidApps. This is a company that is also one of the creators of the blocks. On the DAP Network will run: vRAM, vCPU and vAccounts. This will be a second-level solution that will fall on EOS and allow developers to create and manage their DA cheaper.
DAP Network is already conducting its ICO and it will last 1 year. They will finish in January 2020, they will have their own tokens, but they will work the second level on the EOS blockchain. Everything is controlled by voting and there are also problems there. Let’s consider which ones. We have the creators of the blocks that are elected. There is also a constitution by which they are obliged to be guided when making their decisions, and there are also referendums. At any time, users can decide to hold a referendum on any topic, and according to its results make changes to the blockchain.
The problem is that most of the coins are in the hands of a small number of people and they manage everything. It seems like the creators of the blocks are selected by voting, but here, too, there is a problem in that EOS has a complicated wallet and most of the simple holders of tokens such as you and I keep them on the exchange. That is, they do not participate in voting, but participate – all the same creators of the blocks. That is, they have the lion’s share of these tokens in their hands and they vote for each other there.
Another problem is that some decisions were made contrary to the Constitution that exists within the framework of EOS. The elected, creating blocks sometimes pay attention to those rules that are spelled out in the Constitution, or decisions that are made in referendums, and sometimes not. In principle, they do what they want, especially these two factors and do not look. The blockchain of the hero of our review is difficult to call decentralized, since only a few people control it, decide how it will continue to develop despite the provided voting and selection procedure.
Of course, this is not the end of the world, you can’t look at it as if it’s some kind of horror-and-bad and bad blockchain, no – it’s good. It has its pros and cons, we just need to understand and reckon with this. The creators of the blocks, of course, are also primarily concerned with a prosperous future, they look far ahead, they are interested in strategic development. Since they earn money on it, if they say to row in their direction all the time, just taking care of their pockets, no companies will develop a DA on their blockchain and simply go to their competitors.
They are not interested in this either. Therefore, I think that such a semi-centralized management is too bad either, there are some advantages in this. These creators of the blocks are extremely interested in success, so they even help in developing new solutions and are involved in solving problems.
ICO EOS was conducted by a company called block one. They took it upon themselves to develop Soft, but they did not even take it upon themselves to launch it, they said – “we will develop it, if the community votes for the launch, we will do it, if not – not our problems.”
This initially pushed me away, after the ICO I took a profit and left, sold the tokens completely. Now I look at it again, as the project is gaining momentum. And as we see, leads in some areas. That is, at that time, it was not at all clear whether this blockchain would be launched. Today it is successfully launched, running, developing.
Of the collected more than $ 4 billion, Block One plans to invest only $ 1 billion in EOS. Of course, some of this one billion has already been spent, but they have a rather large monetary reserve in order to develop further.
In turn, the creators of the blocks are also interested in a positive continuation and help in further development. As we saw, the Dap Network was also launched by one of the creators of these blocks, that is, they are trying to do everything in order for the project to develop and live. Therefore, if we consider funding, then they have the money and the developers, too.
So let’s summarize a little. Despite the existing difficulties, the developers continue to work on the blockchain, and this is the most important thing. If you stop developing new applications, it will not be needed by anyone. But as we see today, he is the leader and the most active users of the DA are with him. There is no clearly pronounced industry leader and EOS has every chance of becoming one. Of course, you can not ignore such monsters as Ether; powerful dinosaurs like Microsoft and IBM.
They will all work in this market. But for the time being there is no one who would have absolutely everything good, each of them has his own problems and rather serious ones. They are gradually being solved, but this is a young industry, there will inevitably be a huge number of problems. That is why there is no leader who has captured the entire market, including because of this, many start-up companies are starting development on several blockchains at once, because they do not know which one will dominate in the future.
In general, at the moment, EOS is a rather promising project that has excellent positions in the market and it has all the chances to become one of the leaders when the market for decentralized applications becomes possibly as big as the market for mobile applications.
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