EOS – a viable alternative to Ethereum, Hyperledger and IOTA?
The mainnet of EOS was originally planned to be launched on June 2nd, but this date had to be postponed several times. The reason for this were serious security breaches that had been discovered in the days leading up to the launch, as well as several communication problems, due to which the community vote on when to start operations had to be repeated a few times. Additional delays were caused by a phishing attack, which sparked uncertainty among the community. Last but not least, the community had broken up into two quarrelling camps with different software versions, so there was the risk of a “fork” (splitting up of the blockchain into two competing versions) before the platform had even started.
However, on June 9th, the mainnet was finally launched, and developers and companies can now use the new platform to develop blockchain-based services and business models.
But why is EOS worth mentioning in the first place, in view of all the chaos and clear lack of professionality?
Well, the major aspect surely is the sheer amount of the seed capital ($4bn) raised by the start-up behind EOS, block.one, during the one-year ICO. This is double the amount of the second-most successful start-up, Telegram, by whom the instant messaging services of the same name was developed. block.one and the entire community of developers can thus draw on the strongest funding of all the blockchain projects: That alone makes EOS a project to keep an eye on.
Investors in the project seem to have faith in EOS’ promise to develop an extremely powerful blockchain platform able to process several million transactions per second, while using a consensus mechanism that would not result in transaction fees.
With this aim, EOS targets two critical issues of the Ethereum network, whose public blockchain platform cannot process more than about 15 transactions per second and due to the proof-of-work (PoW) consensus mechanism used – and thus the need to pay the “miners” – has to charge transaction fees. This explains why EOS has also been boldly referred to as “Ethereum killer“.
At the moment, there is no reason to mistrust EOS’ promises, since block.one has indeed come up with some very interesting alternatives. For example, EOS is strongly focused on the development of distributed apps (dApps) to quickly develop new blockchain-based applications, services and business models. EOS uses the consensus mechanism "delegated proof of stake", which is based on validators instead of miners. Last but not least, performance of the network increases along with the number of participants, so there is practically no limit to its scalability. The more participating nodes there are, the faster the transactions are processed. However, we are still talking theory here, as for the moment, there is no independent analysis and evaluation of the EOS blockchain. And it is a fact that the competition is more mature, more advanced and can draw on the experience from its many projects to work on closing development gaps and solving performance problems.
Ethereum has a technical advantage of several years. There are already many implementations and in terms of low transaction speed, so-called “sharding” could be the solution.
Hyperledger Fabric is available in a production-ready variant and is already being tested and used in numerous blockchain projects worldwide.
IOTA provides an environment similar to blockchain and was specifically developed to operate M2M or IoT transactions. IOTA is meant to provide high performance without the need of (or only very low) transaction fees.
The Lightning Network is a bitcoin extension, which uses the cryptocurrency’s public blockchain network, while doing away with some of the disadvantages by creating temporary parallel networks.
In this strong competitive environment, EOS must now display evidence of its capabilities. Its technological approaches are promising and, as mentioned, its financial resources more than sufficient. However, the fact that there is so much money can create longing and may cause the entire project to fail. The dispute we’ve seen between the two competing camps was not least due to the fact that the opponents are trying to compete for the quite lucrative validator jobs. The dispute seems to have been settled for now, otherwise the successful launch of the EOS mainnet would not have been possible.
In future, block.one and the community of developers will have to work on channeling the financial and technical potentials in the right way, so as to create a production-ready blockchain solution as soon as possible. Whether these efforts will be successful cannot be predicted from where we stand today, just a few days after the launch of the mainnet. What is, however, certain is that PAC will be keeping an eye on what happens around EOS.