There is a question of what the future holds for blockchain technology in general. Whether or not its potential will be realized. Scalability and Decentralization often do not come as a package. Let’s look at Ethereum and EOS and what they bring to the table.
Back in 2015 people bet on the Ethereum blockchain. This name was the main argument in any crypto fight. The Ethereum Blockchain was the first that drew an analogy between the standard centralized banking system and the decentralized platforms that allowed people to manage their crypto funds (sending, receiving and withdrawing) without a hint of a middleman. A brilliant Smart Contracts technology was discovered that time, thanks to the Ethereum blockchain. Indeed, this was a significant new thing in the trustless environment of Blockchain.
The crypto world first heard about the EOS blockchain in 2017. It was immediately called the next generation’s blockchain. It is fair to say that EOS originally came from the Ethereum operating system but over time developed its own platform which just so happened to be a lot more functional than its predecessor. Nowadays the EOS blockchain is a direct competitor with Ethereum.
The EOS Blockchain has a potential to scale to millions of transactions per second. DPoS (Delegated Proof of Stake) modification is responsible for the instant transfer of cryptocurrency. This consensus mechanism has 21 block producers instead of a large number of miners in a proof of work model.
For the sake of demonstration – In July 2018 the EOS successfully executed 1000 transactions per second. These numbers are significantly better than Ethereum has ever reached. In addition, there is a huge benefit which is described in EOS’s white paper – no transaction fees for sending or receiving cryptocurrency. Also, the MyWish Smart Contract Platform launched the world’s first automatic smart contracts on The EOS blockchain.
Users of the EOS Platform with the help of MyWish now have the possibility:
- To create their own cryptocurrency on EOS blockchain.
- To develop, distribute, or sell tokens that serve as funds raised through an ICO.
The whole point of crypto, which is building a decentralized network that doesn’t rely on a central authority but it’s users to secure it and validate transactions. When anything comes at the cost of Decentralization in the crypto space it is not worth it, even scalability.
EOS is a highly centralized project.EOS runs on only 21 nodes that check and validate new transactions. Every 126 blocks 21 new nodes get elected by the stakeholders. Every year there is a maximal inflation of 5% to pay the block producers, which equals at the current price of EOS $332,476,257! All of this money goes directly into the pockets of the (probably not much changing) 21 block producers and grants them with even more power and stake in the network. The EOS project tries to solve the problem of scaling and instant/feeless transactions not by using real innovation but rather centralizing the whole network to ensure everything runs smoothly. The giant market cap just shows that most of the people in crypto don’t really care about the tech.
On the other hand, A study done by Cornell professor Sirer and researchers at the institution has shown that less Ethereum nodes are linked to institutions or organizations than any other cryptocurrency, which means that more nodes on the Ethereum network are operated by individuals rather than companies. He further stated,
“The data shows that the [Ethereum] nodes are both in the latency space, and also geographically more distributed around the world. Ethereum nodes tend to come from all sorts of places, smaller networks, and homegrown entities, as opposed to Bitcoin nodes, which tend to be located in data centers.”
Scalability is definitely important but not urgent as we are at the early stages. Vitalik Buterin says that Ethereum can achieve true scalability in 3-5 years while being completely decentralized. Which should be the ideal scenario. What good is scalability at the cost of Decentralization? Do let us know your thoughts in the comment section below.