Ethereum has been around since 2015 and has become the biggest DeFi platform in the world. With a market second only to Bitcoin, ETH has attracted a fantastic developer base and multi-billion dollar DeFi ecosystem. EOS entered the market with a lot of hype. They had a $4 billion ICO (still a record) and were touted to be the “Ethereum Killer.” However, while they may not have lived upto their lofty ambitions, they still have a lot to offer.
Ethereum vs EOS: The Basics
- Ethereum was launched in 2015 by Vitalik Buterin.
- EOS was founded in 2017 by Daniel Larimer and Block.One.
- Ethereum allows you to rent resources, EOS allows you to own resources
- Ethereum was the first decentralized application platform.
- EOS provides a more scalable and faster smart contract platform than Ethereum.
- Ethereum can manage 15-20 transactions per second, while EOS can do ~2,500.
- Ethereum currently uses Proof-of-Work (PoW) and will transition into Proof-of-Stake (PoS).
- EOS uses a Delegated Proof-of-Stake consensus mechanism and EOS.IO to power its blockchain.
- EOS compromises its decentralization to achieve higher speeds.
What Is Ethereum?
Ethereum is a decentralized, fully autonomous smart contract platform founded by Vitalik Buterin and Ethereum Foundation. Ethereum has its native token called Ether, along with nodes and miners. Ethereum’s blockchain maintains consensus for the Ethereum Virtual Machine (EVM), on which smart contracts can be executed. Smart contracts are simply lines of code that are written on the blockchain. The contracts are self-executing and execute certain actions when specific conditions of the contract are met.
What Is EOS?
EOS positions itself as one of many alternatives to Ethereum. It was created by Daniel Larimer and Block.One in 2017. Similar to Ethereum in several ways, the EOS platform supports industrial-scale applications. In addition, the platform aims to become the cheapest, fastest, and most scalable blockchain in the world, hoping to eat into Ethereum’s market share. EOS provides tools for dApp while also offering scalability solutions. The platform has the following features:
- Complete decentralization
- Low Latency
- Parallel processing
The main creative genius behind EOS was Dan Larimer, who also created the Delegated Proof-of-Stake consensus mechanism. Larimer and Block.One parted ways at the start of 2021. EOS tokens were originally ERC-20 tokens built on the Ethereum blockchain but have since migrated to the EOS blockchain.
Ethereum vs EOS: Scalability
Scalability is the Ethereum blockchain’s most pressing concern, with several challenges that need to be addressed. At present, Ethereum is able to process only about 15-20 transactions per second. Vitalik Buterin has stated that with the launch of Ethereum 2.0 and the transition into Proof-of-Stake along with several other features like Sharding and Layer-2, these scalability issues will be resolved.
EOS is allegedly capable of processing up to 10,000 transactions per second. However, in practice, it is more like ~2,500. The main reason why EOS is so fast is due to its DPoS mechanism (more on this later).
Ethereum vs EOS: Consensus Mechanism
Ethereum uses a Proof-of-Work consensus mechanism, which sees miners solve complex mathematical problems to verify transactions. A PoW consensus mechanism is extremely energy-intensive and requires powerful hardware while also consuming a significant amount of electricity. The Ethereum 2.0 update will see Ethereum move from PoW to Proof-of-Stake (PoS). Ethereum’s new Proof-of-Stake mechanism, also known as Casper, will work differently compared to other PoS consensus mechanisms.
Casper will function as a completely trustless system, with malicious block validators having their stake slashed. Before ultimately shifting to the new PoS consensus mechanism, Ethereum will employ a hybrid PoW/PoS mechanism as a temporary measure to ensure minimal disruption to the functioning of the blockchain. EOS uses a consensus mechanism known as Delegated Proof-of-Stake (DPoS). In a DPoS blockchain, 21 nodes share the responsibility of creating new blocks. DPoS functions in the following manner,
- At the start of each round, 21 block producers are chosen, out of which 20 are selected automatically. In contrast, the 21st producer is chosen according to the proportion of votes relative to other producers.
- To ensure balanced productivity at all times the producers are shuffled.
- Non-participants are removed from consideration to ensure that block production time stays at 3 seconds.
Delegated Proof-of-Stake guarantees performance and scalability and ensures that users do not have to wait for each node to confirm every transaction. Only fifteen out of the total twenty-one nodes need to reach a consensus. Simply put, EOS compromises its decentralization to achieve higher speeds.
Ethereum vs EOS: Transaction Costs
Transaction costs are different on both Ethereum and EOS. During the early days of the Ethereum blockchain, transactions could be verified and completed for as low as 1 cent. However, as the number of users on the platform kept increasing, the transaction fees or gas fees also went up exponentially.
In fact, the gas fees have become so high that it has become a major hurdle for developers to actually run their apps on the Ethereum chain. This is why they are always on the lookout for alternative platforms. EOS’s transaction fees model is pretty alluring. Developers can stake their EOS tokens to receive resources from the network to cover their network and CPU bandwidth and pay no transaction fees. In other words, you receive resources after staking your tokens within the ecosystem. This is the fundamental difference between the two ecosystems. Ethereum allows you to rent resources, EOS allows you to own resources.
Ethereum vs EOS: Smart Contracts
Ethereum vs EOS: Conclusion
Ethereum has several scalability issues that EOS claims to fix. EOS improves on several aspects of Ethereum, such as scalability and transaction speeds. However, EOS has its fair share of critics who deem it to be too centralized.
|Creators||Vitalik Buterin and Etheruem Foundation||Dan Larimer and Block.One|
|Speed||15-20 tps||~2.500 tps|
|Consensus Mechanism||PoW now and PoS later||DPoS|
|Core Idea||Rent resources||Own resources|
|Smart Contract Language||Solidity||C++ in WebAssembly|
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