Familiarity with the project EOS. How cryptocurrency works on Proof-of-Stake?

The Ethereum team has long been planning to migrate from model Proof of Work (proof of work) on Proof of Stake (proof of share ownership). This is largely due to the huge power consumption PoW, as competition between miners for a fee based on the increase in computing power. It is expensive, in terms of electricity consumption. In the model of PoS the recipient of the reward for mining is determined by the size of its balance in coins. This approach will reduce the cost of mining tenfold, and also provides additional scalability of the block chain.

For a long time in Cryptoprotected there are projects in which this model is used from the beginning. EOS is a blockchain platform designed to create decentralized applications. Previously, it was often called killer Ethereum because of similar functionality, but with greater scalability and zero transaction fees. Let’s take a closer look and learn how crypto-currencies working on the model of PoS.

The contents

Who are the manufacturers of the blocks in the EOS?

Manufacturers of blocks EOS is decentralized entities, which manage network EOS.

They are responsible for adding blocks of transactions or data in the blockchain EOS. In fact, the manufacturers perform the same functions as the miners in the blockchain with proof of performance of work (PoW) or nodes with a share of ownership in a blockchain with proof of share ownership (PoS).

EOS. Source: Reddit

They described co-founder and technical Director EOS Dan Larimer.

Manufacturers of power can be compared to “DJs”. They decide what music and which calls to let in the air.

How does the network of EOS?

It is based on a consensus mechanism called delegated proof of share ownership or DPoS. Recall that the mechanism of consensus monitors compliance with the rules of the network Protocol and ensure that all transactions occur honestly, that is the crypto currency is spent only once.

PoW-blockchain like Bitcoin miners employ greater computing power to solve complex mathematical equations. When the equation is solved, the miner publishes the answer, which is confirmed by other miners network. Thus a consensus is reached. Block Bitcoin is added to the blockchain, and decided the equation of the miner gets his reward. Then all proceed to the solution of the following equation.

In the PoS network of like Cardano nodes — also called nodes — reserve a certain number of tokens, that is, block them at a purse at the specified time, and instead of getting a chance to be elected to add to the blockchain the next block of transactions. Although the choice happens randomly, often taking into account factors such as the reserved amount, the time of redundancy and reputation of the node.

Delegated proof of execution of work is a type of PoS, where the validators — the network that support its performance, participate in the vote to form new blocks in the blockchain are chosen not by chance, but by a vote of the holders of the remaining tokens in the network. Delegates receive the task to maintain the integrity and accuracy of the network reaching a consensus of the majority of the blocks of transactions or data that needs to be added to the network. Another difference EOS specifically is that instead of a simple backup token EOS manufacturers of units to bet their investments in the network in the form of infrastructure, support community development and so on.

CEO Block.one Brendan Blumer, who is also behind the development of the EOS, describes manufacturers of power technology EOS.IO as “elected by the holders of tokens 21 delegate that actually confirm transactions in the network”.

A rating of manufacturers of the unit. Source: Alohaeos

Who can become a manufacturer of power EOS?

Theoretically, any voted for by the community EOS.

But as already mentioned, from the producer blocks waiting for promoting the proper functioning of the network of EOS and its continuous growth. So they have to stake their investments in infrastructure, community support and participation, financial support for developers of decentralized applications (dApp) on EOS, sponsoring educational activities and more.

Thus although theoretically anyone can propose his candidacy for the place of the manufacturer of the blocks, in fact the EOS community would vote only for those who can prove the existence of sufficient resources for the operation and continuous growth of the ecosystem EOS.

Consequently, manufacturers of the units usually are large consortia, such as EOS EOS New York and Beijing, or even big crypto currency exchange like Huobi and Bitfinex.

Engineer EOS Bart Wyatt described the manufacturers of the blocks in a post on Medium as the ever evolving brain of the community EOS.

Manufacturers of blocks in the network EOS.IO be a kind of brain block. And it’s worth noting that the brain is not static. The number of manufacturers of blocks, their sizes and personalities will vary, as the community will see the value in changes of meta-information about these manufacturers. If the community would value in producing a certain set of equipment or location in specific places (which would reduce the delay in data transmission across the planet), it will choose those who match the vision of what should be a blockchain EOS.IO.

How to become a manufacturer of power EOS?

As in any traditional democracy, candidates have to campaign to win votes of the community EOS.

But unlike a normal democracy where elections are held every four to five years, voices in the network of EOS are counted every 60 seconds.

As manufacturers of blocks shall be elected 21 candidates who have the most votes. However, since the vote takes place almost continuously, and every minute anyone can be elected, or lose their status – there is also a list of 101 manufacturer of spare blocks ready to fill the gap, if someone continues to lose status.

Thus blocks manufacturers need to constantly fight for votes to stay in the top 21 or be next in line if someone of the manufacturers units will not gain enough votes.

What motivates to become a manufacturer of power EOS

Manufacturers of blocks are rewarded with tokens for EOS adding to the blockchain is new blocks.

This remuneration is paid not from transaction commissions — as in the case of Bitcoin, and through internal inflation system. Every time when the network produced new units, generating new tokens.

Whether EOS decentralized?

Source: thecoinoffering

In the past network EOS already had to contend with suspicions just on this issue.

In October 2018, five months later after the launch of EOS, CEO of Block.one Brendan Blumer replied to the message, in which the main producers units were accused of collusion and circular voting. In a statement bloomer has indicated the rudimentary state of the network EOS, while not trying to deny the allegations – but did not confirm them.

Before we reached the unfounded allegations of unfair voting for the manufacturers of power. We are convinced of the importance to ensure free and democratic adoption of the EOS and, if it chooses, may vote together with other holders, to strengthen the integrity of the process.

According to co-founder of Ethereum Vitalik Buterin, such behavior it is not surprising, although it happened sooner than he expected.

Interesting! This was predictable, and I predicted it, but didn’t expect it would happen so thoroughly and so soon. I also want to add that this is why I don’t believe in oncein the Treasury with a vote of holders of coins. Any blockchain, where the issue is attracting the vote of the holders of coins supposedly to Finance public goods, can easily slide into cronyism like “I vote for your shitty project, and you for mine.”

In November 2018 EOS was once again under scrutiny. Then it was discovered that confirmed transactions in the blockchain have been cancelled in order to restore a hacked account of one of the network users, and without his knowledge.

As a result, EOS has problems, although the network continues to operate and attract new fans. However, the same can be said about other cryptocurrencies.

Today, EOS is at the eighth place in the world ranking coins. We believe that compared to other’s she holding up relatively well. Now the course EOS dipped from the historic high of 84.7 percent, while Tron and Ripple XRP has lost at least 92 percent.

Rate graph EOS for all time of existence of the project. Source: CoinMarketCap

In our cryptodata you will find other useful information, and current rates of the coin you can see in our class ranking cryptocurrency.

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