- EOS has improved on Ethereum issues such as transaction fees and scalability
- EOS is controversial due to its centralized model
- Ethereum is the second largest cryptocurrency behind Bitcoin
- If Ethereum can Implement a proof-of-stake consensus mechanism it could leap ahead
EOS and Ethereum
EOS and Ethereum are the world’s two largest blockchain projects when it comes to Smart Contracts. Ethereum wants to decentralize world computing and EOS wants to run fast decentralized applications or DApps. Each protocol uses a different consensus algorithm and a different governance model to achieve this.
A smart contract gives programmers the ability to develop self-executing code that can be used in fields such as DeFI (Decentralized Finance). Their functionality is similar to the functionality of a legal contract or agreement. These contracts are smart in the way that no one needs to enforce the terms and agreements of them, and instead the contract includes these terms and agreements between the two parties in the code. The code itself will act as the enforcer of the contract when it will execute once the conditions written in it are met. These smart contracts can automate actions, in this case transactions and as such can save businesses a big chunk of money.
Why EOS is Important
EOS is known as a smart contract blockchain platform. It was created by a company known as Black.one, and the blockchain world was first introduced to it in June 26th of 2017. It quickly rose in terms of growth and became the main competitor to Ethereum.
This is due to the fact that aside from performing smart contracts, it also creates fully decentralized applications.
EOS is a blockchain-based decentralized platform that essentially enables the development, the hosting, and the executions of DApps (Decentralized Applications).
As such, EOS is responsible for making applications look like they are using standard solutions, and EOS is the biggest ICO of all time with $4 billion in funding.
AOS originally launched on the Ethereum network and it later migrated to its own blockchain.
Why Ethereum is Important
Ethereum is an open-source, blockchain-based decentralized software platform that launched in 2015 and uses its own cryptocurrency known as ether. It enables Smart Contracts and Distributed Applications known as DApps to be built and run without any interference from a third party.
Ethereum ended their ICO and raised $18.4 million in August of 2014. And in May of 2015, Olympic the Ethereum testnet Releases.
This leads us to the conclusion that both of them are smart contract platforms, however, they differ in many aspects.
EOS VS Ethereum
As mentioned previously, although these two platforms are similar and try to achieve similar goals, they do so in different ways. The main thing that you need to know is that EOS compromises on decentralization for improvements in scalability as well as lower transaction fees.
If you haven’t noticed by now, scalability is one of the challenges that both of these platforms are constantly trying to solve. Ethereum can make up to fifteen transactions per second, and it is not efficient enough to compete with other payment services outside of the blockchain space. Visa is an electronic payment scheme that has the ability to process thousands of transactions per second.
On the Flipside
- EOS can serve up to 10.000 transaction per second.
- EOS has a solution known as inter-blockchain communication that creates another EOS blockchain where more transactions can go through and be processed.
- All of these blockchains can connect to each other and there is no limit for creating other ones on EOS.
Aside from scalability you also have to consider the transaction costs associated with them.
Ethereum is a platform where every transaction costs gas. The transaction complexity and network volume can affect the price. This is one of the biggest obstacles as a result.
EOS works efficiently as the transaction costs are non-existent by comparison. Users lease their tokens in order to cover the bandwidth to pay for a transaction and instead of spending ETH, it is possible to recoup the token coverage when the user decides that they do not want to provide the transaction by selling tokens.
When it comes to Ethereum, the users need to pay for the execution of transaction through the usage of smart contracts. Executing a smart contact has a minimum fee that is at 32000 gas, plus 200 gas per byte of the source code. The gas cost for the execution of Ethereum smart contracts that conduct more than 1.000.000 transaction a year equals to 90 ETH each year. Keep in mind that developers are required to pay as they interact with the DApps and send transaction. Users deal with most of the costs.
When it comes to EOH, you need to stake your EOS tokens to receive storage, CPU and bandwidth for your smart contract. You will still need RAM that you can buy from an internal marketplace. 1 MB RAM costs 59EOS. This means that if you are a developer and want to make an app for 100 users, for each user you will need to pay for each user account that is 4 KB RAM per user, pay for their storage, and take into account the network bandwidth and CPU bandwidth. Deploying an app for 1000 users would be 10628 EOS per year.
Consensus Mechanism Explained
When it comes to this, Ethereum is a proof-of-work model, and EOS is a delegated proof of stake model.
This means that in the Ethereum network, each node has to solve a cryptographic has puzzle in order to confirm a transaction on the blockchain itself.
On EOS, 21 nodes are responsible for producing these new blocks. This guarantees stability and network performance, but compromises on making it a decentralized platform. However, users do not have to wait for every node to confirm a transaction, and have to wait for 15 to 21 total nodes to reach consensus.
Ethereum has its own contract-oriented language known as Solidity which allows the platform to write smart contract.
EOS smart contracts are written in C++ and developers have the option to use any programming language that has a compiler that can convert the bytecode to web assembly code.
Solidity shines with its compatibility when it comes to smart contracts due to the fact that it was specifically developed for them, and this makes it useful as a result.
Ethereum Performance Over the Years
When it was initially launched back in 2015, Ethereum started with a value of $2.77 per coin. Over its first three days of trading, the price dropped to $0.68. In March of 2016, the price hit its first high of $15 per coin. On May 6th of 2017 after the ICO boom, the price of ETH hit a new high of $95 per coin. By September 18th of that year, ETH reached $800. When 2018 came, on January 13th, Ethereum became quite successful with its all-time high of $1.400.
The current value of ETH is $1.843.
EOS Performance Over the Years
When it was initially launched back in 2017, its price was at $2.29. It doubled within the first day at $5.40. While this was impressive at first, the coin started falling in value and found its bottom line at only $0.59. It only got higher in value when the crypto-boom happened and on January 13th of 2018 its value rose to $16.39. In May of 2018 the EOS price jumped to $22.89. However, that being said, nowadays the value is stable between $2 and $2.8. This is due to the fact that it dropped to its bottom of $1.86 on December 7th of 2018, and progression from that point onward has been slow.
The current value of EOS is $4.81.
The Future of EOS and Ethereum
If Ethereum can implement a proof-of-stake consensus mechanism, EOS could be done for. If Ethereum fails to reduce transaction costs, EOS has the potential to overtake it.
The blockchain market is a fast environment and there is no clear way to have a prediction that is accurate for any upcoming event.
Currently, Ethereum is the world’s second largest cryptocurrency behind Bitcoin. Hundreds of cryptocurrency tokens are built on top of this blockchain and it has over one thousand DApps under its platform.
EOS on the other hand is still in its early days but has been performing well. The main selling point of EOS is its transactions per second, and if it can figure out how to make all of them free, and more in quantity per second, Ethereum has quite the challenger approaching.
EOS does indeed have the potential to become the best performing blockchain in the world if done right, however, Ethereum is already the second best in the industry, so guessing who will be the best is difficult. EOS may replace Ethereum as the dominant smart contract platform over time, as it has improved on many of the issues Ethereum has such as transaction fees and scalability, however, it is fairly controversial due to its centralized model.