EOS’s Road to the Throne: Can It Beat Ethereum?

In the past month, EOS has skyrocketed, from April 1 to May 1, the increase from the lowest point to the highest point exceeded 4000%, which has promoted a small carnival in the currency circle. This also gave many people more imagination: Will EOS become the real blockchain infrastructure in the future, and will it replace the position of Ethereum?

There is a lot of controversy about the future of EOS, with both those who are optimistic and those who are pessimistic. Each side has a very reasonable point, making it difficult for the onlookers to distinguish. The most important thing is that it is often the holders of coins that make the decision. Those who hold EOS are desperately supporting it, while those who do not hold it are desperately stepping on it.

The upside of EOS

If EOS has a chance to succeed in the future, it must be due to breakthroughs in the following aspects: EOS’s main scalability, ease of use, ecosystem construction, and its governance mechanism.

1. Scalability

Blockchain cannot achieve decentralization, security, and high performance at the same time. For TPS, sacrifices must be made. For example, compromise and balance in terms of security or decentralization. Ethereum prioritizes decentralization, sacrificing scalability and performance. EOS prioritizes performance, sacrificing a certain degree of decentralization.

Ethereum's original goal was to build a universal computer for the world, and to build a decentralized application ecosystem. However, limited to 15tps, Ethereum currently only supports crowdfunding worldwide, which does not require high performance. But once it encounters a high-concurrency application, such as a game like CryptoKitties, Ethereum will be stretched.

EOS has prioritized performance and scalability from the beginning. It is expected to reach 1,000 tps when the mainnet is released in June, and will move towards 10,000 and 1,000,000 tps in the future.

Of course, Ethereum is not a pushover and has its own scalability plans, such as sharding and plasma. Given time, Ethereum will have a chance to make them. But plasma only provides limited functions in the early stages, such as not supporting general smart contracts. Sharding is more complex and will take longer.

This gives EOS a time window. If only EOS’s performance can meet the needs of developers to build DApps, then this may be an opportunity to overtake others.

2. Ease of use

There is another aspect of EOS. Since it is considering the infrastructure of DApp, it has also begun to consider usability. This can be seen from BM's interview. He also thinks about usability. This is rare in the current blockchain industry.

For example, one of the interesting designs of EOS is that ordinary users do not have to pay . Currently, users need to pay a fee to use applications based on Ethereum. Friends who play the CryptoKitties game know that the fee is not cheap, especially during congestion.

Based on the EOS blockchain, ordinary users do not have to worry about the handling fee, which is helpful for more mainstream users. It is difficult for ordinary users to imagine that if they have to pay to use instant messaging, say a word, post a circle of friends, or write a comment, how many people would be willing to use it.

In addition, EOS also provides an account recovery function . Currently, a major obstacle for ordinary users to enter the blockchain is the safekeeping of private keys. Users have to worry about not being able to find their private keys, or losing them, and they also have to worry about hackers discovering their private keys and stealing their assets. Moreover, for most people, private keys themselves are not easy to use and have a great psychological cost.

EOS provides an account recovery function. The EOS system will allow a "recovery partner" in the future. If your account is hacked, the "recovery partner" can retrieve the private key and restore the account through your account.

This feature may seem insignificant, but it is of great significance to ordinary users. For tokens such as Bitcoin and Ethereum, if the private key is lost, it means that the assets are completely lost. Blockchain accounts are all accounts about assets, and this feature is of great significance for reaching the mainstream population.

The account name also provides a more readable address , such as @lanhu, which we often see today. The account is referenced through a unique readable name, which can be up to 12 characters long. This is more user-friendly, easier to use, and less error-prone than ETH or Bitcoin addresses.

In general, both Bitcoin and Ethereum are too difficult to use for ordinary users. For example, some users like the CryptoKitties game based on Ethereum, but it takes a long time to understand the operation process.

3. Others

In other aspects, EOS community, ecological construction and governance mechanism are also important parts. At present, as the election of super nodes is launched in the EOS community, more and more people are aware of EOS, and the popularity, number of coin holders and transaction volume have greatly increased. The current daily transaction volume has surpassed Ethereum.

EOS has raised about $2 billion in funds, of which at least $1 billion can be used to support the construction of an EOS-based ecosystem, which will make new developers willing to join the EOS ecosystem in the future. At the same time, with strong funds, the team can also hire more senior technical and operational talents to join.

In terms of governance, EOS has its own constitution. It exists to solve some problems that software cannot solve. Although many people believe that code is law, there are still many problems that cannot be solved at present. Therefore, it is necessary to collect facts through the community and reach a consensus on some subjective issues.

All changes to governance rules need to be made through constitutional amendments. This means that EOS has introduced a formal governance mechanism and no longer relies on temporary, informal and controversial governance. This plays an important role in the stability of EOS upgrades and subsequent development.

If EOS is to be successful in the future, at least half of the credit should be attributed to its governance mechanism, including its DPoS consensus mechanism, which is essentially an externalization of the governance mechanism.

The downside of EOS

Nothing can be perfect. There is almost no such thing as perfect. What are the shortcomings of EOS? What does Ethereum or other infrastructure have that EOS does not have?

There is no doubt that while EOS has gained advantages, it has also lost some things, such as a certain degree of decentralization. At the same time, will Ethereum, ADA, AE, Hashgraph, and some projects that are on the way and have not yet emerged have more advantages?

As a representative of the second-generation blockchain, Ethereum has gained considerable support from community users and has a certain network effect. Many developers are already using Ethereum. Will these be a big first-mover advantage?

These are questions that need to be considered.

1. Controversy over centralization

This is the most controversial point about EOS at present, such as the 21 super nodes. Many people think that in order to achieve high performance, there will be a centralization problem if there are only 21 block producers. There is also the DPoS mechanism. Many people are also skeptical about whether this mechanism is safe enough. In addition, some people think that the DPoS consensus mechanism and 21 super nodes will have problems in resisting censorship. For example, if the government requires it to be closed and the nodes are relatively concentrated, will there be problems?

Once you control 21 nodes, you control EOS. Does this match the decentralization and security that blockchain pursues?

EOS is more centralized than Ethereum and Bitcoin. However, it is different from centralized companies in that it reaches transactions through consensus mechanisms and has a blockchain community governance mechanism. This is a solution that strikes a balance between decentralization and performance.

From the perspective of Blue Fox, there may be no conclusion on these issues, because real social experiments are needed to see. First, decentralization is not a goal, it is a means to achieve a goal. Which is more centralized, a super node or less than 10 super miners? Is DPoS a more effective consensus mechanism? This still needs social experiments to explore. Are there any other factors that have not been considered?

2. First mover network effect

Ethereum has established itself as a second-generation blockchain through smart contracts and crowdfunding. This historic position cannot be shaken, regardless of whether it will be surpassed in the future. The value of Ethereum is certain.

• First, in areas where performance requirements are not so high, such as crowdfunding of blockchain projects, Ethereum is expected to continue to occupy an important position.

• Second, Ethereum already has a strong developer community, its own brand recognition, and a preliminary ecosystem. For example, although CryptoKitties did not perform well, projects such as Loom Network have begun to explore and try more. It is a blockchain that can run on Ethereum smart contracts and is also a side chain, which allows different games to have high flexibility and performance, such as choosing different consensus mechanisms and creating their own rule sets. Currently, on Loom Network's CrytoZombies, in just four and a half months, more than 170,000 developers have tried programming games based on Ethereum.

There are more than 1,500 tokens listed on exchanges, most of which are ERC20 tokens. Ethereum is not only about issuing tokens, but also initially building its own ecosystem in the process. Many projects that have received financing are building applications based on Ethereum, and this power cannot be ignored. Moreover, it has been running stably for such a long time and has won a certain amount of community trust.

Not only the project parties of decentralized applications, but also exchanges, wallets, hardware manufacturers, etc. have a network effect, and have sunk costs and interests in them, and they cannot just disperse.

Objectively speaking, this is an advantage that latecomers do not have.

3. Potential New Technologies

In essence, EOS is an optimization and upgrade of Ethereum, or in other words, it has chosen a different technical route and development path from Ethereum, but has a similar goal of providing infrastructure for decentralized applications.

In this process, it is hard to say whether there will be new technologies that can better balance decentralization, security and high performance. Maybe there will be new consensus mechanisms? Maybe there will be new breakthroughs in cryptography? ...

Is there a better combination of technology and social practice? I don’t know, but there will definitely be something new in the future.

Conclusion

Whether it is EOS or Ethereum, its most important appeal is to become the infrastructure of the entire blockchain, which requires a long time to explore.

If Bitcoin is the representative of 1.0, it realizes the free flow of value. Ethereum is the representative of 2.0, which realizes crowdfunding through smart contracts, helps start-ups solve funding problems, helps investors realize the freedom of investment and speculation, and lowers the threshold.

So, what is 3.0? Is it an ecosystem? Or will it explode through a certain point? In the eyes of Blue Fox, when all of us focus on the underlying infrastructure and basic protocols, the final explosion may be driven by the explosion of a certain point. For example, based on the demand for free flow of content, this point may bring hundreds of millions of users and truly move towards the mainstream population. Then, do projects similar to IPFS have greater explosion potential and have a greater chance of representing blockchain 3.0? We don't know yet.

Lanhu has expressed similar views on Xiaomi and Weibo:

If it is just improvement and optimization, it will never become a true third-generation blockchain. Of course, whether it is EOS or Ethereum, it is also very good to compete, compete, and conduct various social experiments at the second-generation level.

Even if there is a winner at the second generation level, we investors can still gain a lot of benefits.

In the end, it is not programmers, nor Vitalik Buterin, nor BM who decide the world, but millions of users. The market will give us the final answer if users find it useful.

Of course, from the perspective of Blue Fox, we hope that both EOS and Ethereum can succeed. The success of EOS and Ethereum truly means the existence of blockchain as an industry. If countless decentralized applications are created on EOS and Ethereum, including financial applications, game applications, travel applications, social applications, content applications, etc., then the entire industry may really explode.