EOS (EOS) has been attracting a lot of attention from Mr. Market lately. That attention gave it a high Coin Price ($7.64 on July 29, 2018) and the fifth largest Market Capitalization of any cryptocurrency (roughly $6.848 billion on 29 July 2018).
Not surprisingly, a lot of people are wondering what is EOS and why is it worth so much? Basically, EOS is yet another attempt to build a bigger and better Ethereum (ETH). Like Ethereal, EOS is envisioned as an operating system for blockchain software or decentralized applications (DApps).
Who is Behind EOS anyway?
The difference is that EOS is apparently more advanced and centralized than Ethereum. Another big difference is that EOS is more business-focused and it has some really big money behind it.
EOS has the money to run elaborate global hackathons and to sink $200 million into a joint venture fund. The fund EOS Global will make strategic investments in Asia focused blockchain projects such as Block.one. Block.one is the company that created EOS, its mission is to build marketplace systems for the blockchain.
All this points to a deep-pocketed benefactor such as a major investment bank, a big tech company, or the Defense Advanced Research Projects Agency (DARPA). DARPA is the US military venture capital and research and development organization that funded the development of the internet.
So what is EOS supposed to be anyway?
The billion dollar idea at EOS is to build a worldwide blockchain operating system for industrial scale decentralized applications or DApps.
If that succeeds, EOS would be worth big money because it would the blockchain to be used like the internet. Present-day blockchains simply lack the size, speed, and capacity to operate complex and gigantic programs or platforms.
For example it would be impossible to operate a payment solution like PayPal (NASDAQ: PYPL), an ecommerce platform like Amazon (NASDAQ: AMZN), or a video-streaming service like Netflix (NASDAQ: NFLX) or YouTube over the blockchain. That makes bars virtually any business catering to a mass market from using the blockchain.
Has EOS solved the Blockchain Scalability Problem?
The reason for this is the blockchain scalability problem or size limit. This severely restricts both the volume and speed of transaction processing. It is estimated that present-day versions of Bitcoin (BTC) can only process between 3.3 and seven transactions a second.
Obviously there’s no way a company like Amazon or Netflix which process hundreds of transactions a second can operate over the blockchain. EOS is trying to fix that with yet another purported solution to the blockchain scalability problem.
An obvious use of EOS would be to build and deploy ecommerce marketplaces and platforms on the blockplatform. EOS is trying to make that simple by allowing developers to easily freeze and fix broken DApps.
If claims that EOS has solved that problem are for real, it would be worth untold billions. The reason for that is the blockchain offers a far higher level of security and privacy than the existing internet.
EOS and the Internet of Things
That might enable to operation of remote-controlled through the blockchain and the internet of things (IoT).
Currently we have the technology to operate a lot of machines such as drones, robots, industrial lathes, vehicles, earthmovers, etc. via remote control. The problem is that it would be real easy for the bad guys to hack into the control systems. Blockchain would theoretically make that a lot harder.
This is the premise behind blockchain solutions like Aitheon and SyncFab (MFG). Both of those companies want to build digital ecosystems where people are paid to run remote controlled machines through the blockchain. An obvious use of such platforms would be to extend the gig economy into manufacturing.
Extending the Gig Economy into the Blockchain
That would not be possible with the present blockchain ecosystems like Ethereum. It might be possible with something like EOS if the claims about it are true.
Beyond that it would be possible to offer digital services like banking, insurance, and platforms for freelance work through the blockchain. Workcoin is already building such a platform on EOS’s ecosystem.
Given Uber’s reputed $72 billion valuation it is easy to see why investors and speculators are so interested in EOS. It seems to have the killer app for blockchain ecommerce and extending the gig economy into the blockchain.
The problem with that EOS has presented no evidence that it has such capabilities. Nor has blockchain.One demonstrated those capabilities even though it has attracted some big names from finance to its executive suite. The latest is Citibank (NYSE: C) Human Resources Managing Director James Mendes. Mendes will serve as Block.one’s “Chief People Officer.”
Will EOS be the New Ethereum?
My advice for speculators and investors to stay away from EOS until Block.one demonstrates proof of its claims. The company’s proposal is impressive, but there is no evidence to back it up.
Despite that EOS achieved a Coin Price of $7.64, a Market Capitalization of $6.48 billion and a 24-Hour Volume of $827.67 million on July 29, 2018, CoinMarketCap reported. There was a circulating supply of 896.149 billion EOS on the same day, a Total Supply of 900 billion ESOS and a Maximum Supply of one trillion EOS.
There are some serious weakness to EOS including an apparent lack of liquidity and no obvious convertibility into Ethereum (ETH). That limitation is potentially fatal because almost all of the DApps and blockchain platforms out there today are being built in Ethereum. A smart move for EOS would be to join Bancor’s liquidity network which offers fast conversion into Ethereum (ETH).
Still, EOS looks like a pretty well designed cryptocurrency. Its efforts are refreshingly professional. Watch EOS closely because it might generate some real value.
Therefore you should start investing in EOS when it starts making money. Until then watch EOS closely because this is one blockchain capable of giving Ethereum a run for its money.