A history of EOS

April 27, 2018
Chris Wheal

EOS is described as the youngest of the world’s top 10 cryptocurrencies. It currently ranks as the fifth largest by market capitalisation (at the time of writing around $12 billion), exceeded only by Bitcoin (BTC), Bitcoin Cash (BCH), Ripple (XRP) and Ethereum (ETH).

However, EOS has ambitions to be more than simply another virtual currency – rather it is a cryptocurrency token and also a blockchain that claims to operate as a smart contract platform and deployment of decentralised applications. Its developers have ambitions for EOS to become a decentralised operating system with the ability to conduct millions of applications per hour without charging any transaction fee.

EOS has already generated much positive publicity as “Ethereum with a new motor” – which implies that Ethereum, released as recently as 2015, has already become outdated – while analyst Satya Doraisamy of The Market Mogul even calls EOS the “Ethereum killer”.

Launching his new regular cryptocurrency column in the London Evening Standard  earlierthis month, trader Joe Smith asks ‘What’s so special about EOS?”

Answering his own question, Smith writes; “EOS wants to open its technology and ownership to anyone and everyone who’s interested. It’s a cryptocurrency which is opening up the blockchain system behind it any software developer wanting to build apps on it.”

However “in order to do anything on the EOS blockchain, you must first own a bit of EOS – and you own it through EOS tokens.”

The company behind EOS

EOS is not an officially defined acronym, but apparently stands for ‘nothing’, a title chosen according to its founders so that users can create their own meaning behind the abbreviation. Among other options that have been suggested – with varying degrees of seriousness – are Ethereum On Steroids, End of Silence and Endless Online Scaling.

The parent of EOS is Block.one, a “publisher of technology solutions including blockchain software development”. The company slogan is ‘Decentralize Everything’. Block.one was set up last year when it issued a white paper detailing the EOS.IO blockchain platform, or main-net, which is currently preparing for its official launch early next month.

In the meantime, in late June 2017, Block.one launched an initial coin offering (ICO) for EOS tokens distributed on the Ethereum blockchain and made available a total of one billion EOS tokens.

However, this particular ICO is running for a period of just over one year, to 2nd July 2018, with a select number of token issued daily. The company says that the ICO has raised more than $1 billion to date, while the ESO token’s current market value is more than $12 billion.

Block.one is registered in the Cayman Islands, a jurisdiction regarded as a tax haven for international businesses as companies registered there pay no corporation tax. The company has around 200 staff worldwide, with an office in Hong Kong and US offices in California and Virginia.

The management team

Block.one’s founder and chief executive, Brendan Blumer (above), is a 31 years old American tech entrepreneur now based in Asia and has been working in blockchain since 2014. He launched his first venture, GaMeCLiFF, at the age of 15, selling virtual assets inside massively multiplayer online role-playing games (MMORPGs). Three years later, in 2005, he sold GaMeCLiFF to Internet Gaming Entertainment (now IMI Exchange), who relocated him to Hong Kong.

Blumer has since launched Accounts.net in 2007, which sold in-game avatars and reached monthly revenues of more than $1 million. Okay.com, an enterprise data- sharing platform for real estate brokers in Asia, followed in 2010. In January 2013, Blumer founded ii5, which aims to attract tech talent from Silicon Valley and elsewhere to create competitive technologies for companies in Asia. Ii5 also provides capital investment for both new and existing companies in Hong Kong.

In 2016, Blumer teamed up with Dan Larimer (above), a co-founder of other crypto-companies including Bitshares and Steemit, a blog and social network where users are rewarded with Steem crypto tokens for posting and discovering content. The pair began developing Block.one and Larimer became the company’s chief technical officer (CTO).

Both Blumer and Larimer intend for the EOS.IO blockchain platform to mount a serious challenge to Ethereum. Blumer claims the new technology will scale transaction speed, eliminate user fees and empower open-source communities. “If the internet was mass, scalable, insecure data transfer,” he says, “then the blockchain represents mass, secure data transfer and everything that comes with it.”

The features of EOS.IO

The EOS.IO software platform utilises a Delegated Proof of Stake (DPOS) algorithm, which according to Block.one provides a much faster transaction approval process via blockchain than competing technologies such as bitcoin. The company promises that the platform will have zero transaction fees and the capacity to process millions of transactions per second, which would give it a major advantage over Ethereum.

The EOS development team have also announced plans to establish what is known as fair block production voting, on the premise that holders and investors can be assured they are acquiring more than just units of a digital asset when buying EOS. Owners also become eligible for voting, entering the system of block production by virtue of having a certain amount of EOS units. The system allowing them to vote also bases it proportionately to the number of tokens in their digital wallet.

Fair block production voting also means the team has taken steps to ensure that major exchange markets such as Bitfinex and Huobi don’t gain a monopoly over the EOS network. This aim was accomplished earlier this month via what was termed an ‘Evolution Airdrop’. Working slightly differently from an ICO, the airdrop – the first was on May 10th, with another to follow – represents the means of enabling tokens “to get evenly and equitably distributed across the network, that way honouring fairness, decentralisation and the crypto community”.

As Forbes magazine remarked in February: “The market is lapping up Blumer’s rhetoric. At more than a $1 billion raised so far, EOS has become the world’s biggest token sale, even though the platform won’t launch until June, and it’s unclear whether the coin will benefit from it.” The currency was further helped in April when social trading platform eToro added EOS as a trading option and early this month when New Zealand’s cryptocurrency trading platform Cryptopia announced that it would start listing it.

However, recent price volatility suggests that excitement over EOS might have peaked last month. Having steadily climbed in the first four months of 2018, the price of an EOS token hit an all-time high on April 29th when it sold for $22.89. Some fairly substantial one-day falls have pulled it back to around $14. Some dissenters suggest that until the platform has demonstrated its ability, the hype might have been overdone.

Moreover, rival Tron is getting in first. It releases its own main-net as a public, independent blockchain as another alternative to Ethereum a few days ahead of EOS. Tron’s founder Justin Sun is another young tech entrepreneur every bit as ambitious as Blumer.

Attracting talent

Ahead of the early June  launch, the company has been busy hiring. The chief financial officer (CFO) of Commonwealth Bank, Rob Jesudason, has just announced his departure to take up the post of president and chief operating officer (COO) of Block.one. Earlier this month it names fintech lawyer and thought leader Lee Schneider as its global general counsel. Schneider is an expert in blockchain-related regulation and compliance, and has been involved in structuring several major blockchain-related projects.

Another boost for EOS came earlier this month as the Epay online payment platform announces that the cuurency is joining the select band of bitcoin, ether and USDT. Epay users can begin to deposit and withdraw EOS on their Epay accounts, as well as buying and selling it directly in the payment system.

And despite the sceptics, many analysts still believe the EOS.IO platform offers considerable potential for investors. “As more and more companies start using this platform for decentralised operations, its valuation will increase significantly,” says one analyst, who reports a predicted price for EOS of $37 by the end of 2018 and around $143 within five years. This all depends on EOS.IO becoming “the platform of choice for enterprise level clients” and whether other new competitors can blunt its cutting edge.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

Related Posts

Update on OPEN.KRM asset December 13, 2019
Free Lifetime Membership of VPLedger available with 1,000 OBITS deposit! October 21, 2019