Ethereum vs EOS | Comparing Two of the Biggest Dapp Platforms
With the EOS platform’s highly anticipated launch only a week away, we at Unhashed thought it wise to take a comparative look at EOS and its sure-to-be rival, Ethereum. Both Ethereum and EOS are blockchain platforms designed for the purposes of creating smart contracts and dapps, but there are key differences between each platform that we will be outlining in this article.
- Ethereum vs EOS Price History
Ethereum broke into the cryptosphere in 2015 led by then 21-year-old Russian-Canadian programmer Vitalik Buterin. Ethereum was the first blockchain platform allowing developers to create smart contracts and ‘dapps’, or decentralized applications. The Ethereum platform along with their ERC20 token standard helped give rise to the massive ICO boom which has bolstered the crypto market cap to the nearly $400 billion dollar industry it is today.
Along with Vitalik Buterin, Ethereum was cofounded by Gavin Wood and Joseph Lubin. The company’s assets and project development are currently managed by the Ethereum Foundation headed by Vitalik Buterin, Patrik Storchenegger, and Jeffrey Wilcke.
The fundamental technology behind Ethereum is the Ethereum Virtual Machine (EVM), a Turing-complete global computer made up of every node in the Ethereum network. The EVM allows every computer connected to Ethereum to run dapps and smart contracts.
Another fundamental element in Ethereum’s architecture (and a key difference between Ethereum and EOS) is its consensus algorithm. Since its inception, Ethereum has used a Proof-of-Work (PoW) algorithm to validate new blocks added to the blockchain.
While PoW is the the tried and true method for blockchain consensus, it isn’t without its setbacks. Particularly when it comes to larger platforms like Ethereum, PoW presents numerous scaling and security obstacles in meeting the demands of a growing market. In short, PoW requires massive amounts of computing power, the demands for which have led to the creation of multimillion dollar mining pools that are becoming increasingly centralized.
This and other issues regarding scaling are the primary concerns behind a suite of upgrades on Ethereum’s horizon dubbed Ethereum 2.0.
In 2017, Buterin unveiled the Ethereum 2.0 upgrade which would entail a number of significant changes being made to the Ethereum platform aimed at alleviating some of the problems described above. One of these changes would be a transition from PoW to an alternative consensus algorithm called Proof-of-Stake (PoS).
PoS is intended to address what Vitalik Buterin has called the ‘scalability trillema’, which consists of balancing decentralization, security and speed. With these goals in mind, PoS is expected to make the network more decentralized and secure by reducing the power of mining pools. The result will be a more widely distributed, less resource-intensive mining system. Ultimately Buterin hopes to make mining possible ‘for anyone with a laptop.’
The first steps towards Ethereum’s transition from PoW to PoS began in early 2018 with an announcement that new code on the the Ethereum platform called ‘Casper’ will soon be released. Casper is a hybrid consensus mechanism intended to help Ethereum begin transitioning from PoW to PoS. One of the key features of Casper is that block producers will lose money for attempting to validate false blocks. This is one of several security protocols aimed at protecting the integrity of the network on the new PoS system.
While PoS aims to improve network security and decentralization, Ethereum is simultaneously looking for new ways to improve network speed. Currently Ethereum operates in the area of ~7-15 transaction per second, which to put this into perspective, is similar to the operation speed at which computers were running in the ‘80s.
With this in mind, the Ethereum team is aiming to increase the network’s transaction speed to hundreds if not thousands of transactions per second through a process called ‘sharding.’ Sharding is a system of dividing hashing calculations into different subdomains among various nodes on the network, and then by a separate process launching a mechanism to unite the subdivisions back onto a single network. While sharding could in theory be an effective scaling solution, it’s still in its early developmental stages and presents a daunting programming challenge for the Ethereum team.
Ethereum is still the leading smart contract platform on the market today, holding $59 billion dollar market cap. However, its scalability issues could potentially open the door for new smart contract platforms about to enter the market—like EOS.
EOS is unlike any other major blockchain project in that it is described as an operating system for blockchains, rather than a blockchain itself. The EOS.IO Software is set to release on June 1, 2018. Following the software’s release, it will be up to the global community to build their own blockchains that run the EOS.IO software. block.one, the company behind EOS, will have no say in how these individual blockchains are run following the software’s release.
The EOS project is led by Daniel Larimer—an experienced cryptocurrency programmer and founder of two successful cryptocurrency platforms: Bitshares and Steem. Larimer’s goal with EOS was to create a general purpose platform that makes blockchain technology more accessible to a large audience. Like Ethereum, EOS is centered around providing developers with the tools to create smart contracts and dapps, but it has a number of unique features that set it apart Ethereum and other similar platforms.
The platform has raised a record-breaking $700 million dollars in its year-long ICO campaign, and is perhaps the most highly anticipated cryptocurrency ever to enter the market.
The EOS project is in development by block.one, which is led by CEO Brendan Blumer and CTO Daniel Larimer.
EOS poses an entirely different ideological perspective on blockchain consensus, decentralization, and how smart contracts should be executed and operated. Being a completely new platform, EOS is attempting to not make what it considers to be fundamental mistakes made by its predecessors.
As mentioned above, one unique feature of EOS is that it will rely on the users of the platform to make their own blockchains, rather than creating and managing a centralized chain themselves. Each blockchain running the EOS.IO Software is expected to begin its chain with an EOS ‘genesis block’. The genesis block will be a snapshot of the Ethereum blockchain taken on June 1, 2018 at 22:59:59 UTC that will record ownership of the temporary ERC-20 EOS tokens that have been distributed throughout the platform’s ICO. From this point, it is theorized that new blockchains running the EOS.IO software will compete against one another until the most popular chain becomes the main chain used on the platform.
An additional unique feature of EOS is its approach to token distribution. block.one has put a one billion token cap on the release of its ERC-20 token on the platform, a significantly higher number than most other cryptocurrency platforms (e.g. Bitcoin’s cap is 21 million).
Despite being larger than most, token caps of any size have been argued to serve as an important means of protecting token holders against inflation in ways that unlimited token cap platform’s like Ethereum do not.
EOS.IO aims to be a more efficient and easy-to-use platform for dapp developers than those that have come before it. To that end, EOS.IO includes support for C++ programming, which is historically one of the most popular coding languages. C++ is compatible with hundreds of thousands of pre-existing libraries currently on the web for EOS developers to reference while building their dapps. This is a potential advantage over a platform like Ethereum which uses a proprietary language called Solidity.
EOS.IO will also come pre-equipped with numerous useful features, including account creation and recovery, multi-signature accounts, account messaging, role-based permissions, and many other commonly used tools in application development.
EOS will have a block time of 0.5 seconds and claims to support a transaction speed of thousands, if not millions, of transactions per second. This is perhaps the most exciting feature of EOS and is a feat yet to be achieved by any other platform on the market.
One of the key elements to EOS’s security and speed is Daniel Larimer’s unique consensus algorithm called Delegated Proof of Stake (DPoS). Larimer has been refining DPoS since 2013 and has successfully implemented it in his previous blockchain projects, Bitshares and Steem.
Through the use of DPoS, EOS aims to address concerns surrounding decentralization, safety, and scalability by allowing network token holders to cast votes in proportion to the size of their stake in the network to elect 21 block producers. DPoS in effect democratizes the process of whose work is chosen to be added to the network’s blockchain.
Because EOS token holders are voting for who is elected into the group of block producers, the block producers are held accountable to the quality of their performance. In theory, the competition between block producers to earn the votes of the stakeholders will spur on increased speed and scalability while creating a barrier for entry that will prevent hackers from acquiring sufficient votes to have their fraudulent work added to the chain.
DPoS is built on the idea that the barrier of entry block producers need to get through in order to be elected as adds an additional layer of security that a PoS model doesn’t have, and leads to faster transaction speeds than Ethereum’s overly complex sharding system can deliver.
Ethereum launched with a price of about $0.25 and reached its all time high of almost $1,450 on January 12, 2018. Ethereum dropped all the way down to $361 in April, but has since rebounded to its current $573 value
EOS entered the market in July of of 2017 priced at $1. It reached a $18 value on January 15, 2018 before sliding back down to its low for the year of $4. It has since climbed to an all time high of $20, and is currently valued at $12.
It isn’t yet clear whether the Ethereum 2.0 upgrade will bring with it significant enough changes to take the platform to the next level. There may be fundamental issues in Ethereum’s architecture that, whether through technological limitations or the crippling politics of changing the platform’s structure, Buterin and his team may not be able to overcome. That being said, Ethereum is an established power in the crypto space with a seasoned development team and certainly won’t be going down without a fight.
EOS, on the other hand, has had the opportunity to learn and improve upon its predecessors. If Larimer and the rest of the team at block.one can deliver on what they have promised, EOS might be responsible for the next great leap forward in crypto. There will certainly be some growing pains as blockchains running the EOS.IO software begin to pop up, but EOS may be the first dapp platform to successfully challenge Ethereum’s market dominance.
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