"Smart Contract" and "DApp" (Decentralized Application) are terms closely associated with blockchain technology and are slowly creeping their way into the vocabulary of modern society everyday. These Smart Contracts and DApps are to a blockchain platform as a car frame is to an engine, and EOS is a Koenigsegg one:1. 

EOS makes a few compromises to prioritize scalability and user experience. It offers a degree of scalability, at the cost of some decentralization, unseen by most blockchain platforms today. Many blockchain startups boast decentralization with a network that can't handle the traffic after it launches (Cryptokitties aka Ethereum). This is not to say that EOS is going to operate flawlessly out of the gate; by no means is this my sentiment. EOS could flop the day it's main net launches (disclaimer, I own EOS at the time of writing). However, Dan Larimer, the brains behind EOS, is quite the blockchain savant. Steem and Bitshares are tried and true cases that his Delegated Proof of Stake (DPoS) consensus algorithm is the best solution to scalability and blockchain governance issues to date . In addition to the successful governance model, Steem processes more transactions a second, free of charge I might add, than any other active decentralized application around. Larimer has some major experience under his belt. However, let's look into the intricacies of what makes EOS tick as well as the current market trends before any conclusions are drawn. 

EOS; "Earth Operating System"

EOS has many features that set it apart from other blockchain smart contract platforms (Cardano, NEO, Ethereum, Lisk). This includes a highly scalable network, DPoS consensus algorithm, WASM, native programming languages, quick transactions (<3 seconds) with zero fees, usernames, account recovery, upgrades and bug fixes. I will go into detail what some of these things are and what they accomplish for the EOS platform.

Delegated Proof of Stake (DPoS)

EOS will achieve consensus by means of DPoS. This system sacrafices decentralization for scalability and speed. There is a common misconception that the more decentralization you have, the better. This is simply not true. Ethereum and Bitcoin are far from truly decentralized. There are few mining pools that control the majority of the network causing forking/governance issues and an overall greater level of centralization than meets the eye. With EOS, there will be 21 block producers (delegates) at any given time. In addition, token holders will be given the right to vote in or out these delegates. Votes are weighted based on the token holder's stake. Voters also have the option to have others (proxies) vote on their behalf. Imagine a company where the employee gets to fire his/her own malicious boss? 

21 may seem like a small number and appear to be highly centralized, but in fact has the potential to be more decentralized than Proof-of-work. How so? For example, due to few mining pools having control over Bitcoin's or Ethereum's network, if the government where those mining pools are concentrated decided to shut them down by restricting internet traffic or attacking them directly, the networks would be severely compromised. However, with DPoS, if a delegate (s) were targeted by some group, token holders could vote them out and move on to another delegate in another area, keeping the network running, and rendering the attack futile.  

Production of Blocks

Blocks are produced in 3 second rounds at a 1:1, delegate to block ratio. If a delegate fails to produce a block in that round, that block will be included in the next round and they will not get paid. In addition, every round, the token holders who voted that round are tallied and the corresponding block producers are appointed as a delegate. These rounds happen every 3 seconds, therefore, voting is an ongoing process, requiring there to be block producers ready in the event that one is voted out due to fraudulent activity, hardware malfunction, power outage etc. DPoS even has the ability to provide back up block producers incentives to be prepared.    

Zero Transaction Fees & Quick Transactions 

Another feature of DPoS is that there is no incentive for a delegate to validate one transaction over another, unlike Ethereum where those who pay more in gas will have their transactions validated faster due to the higher incentive for the miners. Delegates are paid equally from inflation and therefore do not compete to produce blocks based on monetary gain, rather they compete for votes from the token holders to be a delegate, but then work with other delegates to support the network in its entirety. Paying delegates by means of inflation also means there are no transaction fees and since there are only 21 delegates, transactions occur in seconds. 

Usernames & Account Recovery 

Something that will play a major role in the mainstream adoption of blockchain technology is providing users with human-readable public addresses as well as a means of account recovery in the case passwords or private keys are forgotten or stolen. Millions of dollars worth of cryptocurrency is inaccessible due to lost, forgotten, or stolen private keys or was sent to an invalid/wrong public address. EOS claims to have a solution to this.

Having a username instead of a long string of letters and numbers as a public address will be much more user/mainstream friendly. Being able to send EOS to @perricita instead of GUDB5638464gfdbsdijcbseu25GYFYVYTWYT46dd467rbyr is a strongly preferable alternative. In addition, different levels of access can be given to individuals all on one account. For example, I could give an employee permissions to my account, @perricita, without them ever seeing the private key and they will be held accountable for any activity under their name on my account. 

Account recovery will give individuals and businesses a much greater peace of mind knowing that their funds are not lost forever in the cryptoverse if passwords or private keys are lost or stolen. Individuals will be able to have account recovery partners who, when prompted, can take steps to reset a private key that has been active in the last 30 days. All you will need is your owner key and the approval of your account recovery partner (s). This method of account recovery is far better than the nonexistent ones on other blockchain platforms. 

WASM (WebAssembly Virtual Machine)

EOS mainnet will launch utilizing WASM. Ethereum uses the Ethereum Virtual Machine (EVM). Ethereum is even migrating to WASM due to its increase in speed & performance relative to other VM's. WASM also allows programmers the ability to write code in native languages such as C, C++ and Rust instead of having to learn another (Solidity). This feature will also greatly contribute to mainstream adoption. 

Upgrades & Bug Fixes

With many smart contract platforms, code is law and it cannot be changed. Hence why forks happen as well as the recent "batchoverload" bug. Since the code is unalterable, malicious code cannot be stopped nor fixed if certain requirements are met. With EOS, if 15 of 21 delegates vote to freeze a malicious account or change the code in a buggy smart contract, they may do so with this 15/21 approval rate. This greatly reduces the need to fork and prevents malicious code from stealing funds, creating coins, compromising the network etc. 

Market Trends

EOS has conducted a year long ICO. This was supposedly in an attempt to disperse the tokens to as many individuals as possible and prevent whales from buying up all of the tokens in a short amount of time. Nonetheless, EOS has been one of the best performing cryptocurrencies on the market. From mid October 2017  to mid January 2018, EOS market cap went from around $225 million to almost $11 billion. It then went from a low of $3 billion in mid March 2018 to $17.5 billion in the final days of April 2018. One must consider that the circulating coins are constantly increasing during this time. Regardless, ROI has been greater than %100 in 2018. 

 

Potential Future Problems with EOS

In analyzing anything, I try to be as unbiased as possible. Above, I mentioned many features of EOS that I believe set it apart from other blockchain, smart contract platforms and why I think it will be very successful. I also mentioned that I am invested in EOS. However, I do recognize the possibility for problems to arise. EOS reminds me of the United States after the revolutionary war in 1776. It was a fresh start and everyone wanted to do the right thing. People had a voice and politicians were honest. But as time went on, money, greed, corruption began to penetrate the government and now we live in a democracy that lies, cheats, deceives, and is downright unfair. I could see this happening to EOS in due time. Since votes are weighted by how many tokens you own, EOS could potentially be ran by the few wealthiest individuals. People with more money should have a bigger say. The problem is bad people with large amounts of money. However, as long as money rules the world, there is no escaping this problem. Smart contracts could be coded maliciously and users funds could be stolen by the 21 delegates. I find this highly improbable, but nonetheless should be considered.

Conclusion

EOS is the all around best solution there is to scalability, governance, and token holder democracy on a blockchain smart contract platform. It appears to confront many of the issues that plague blockchain startups today. Only time will tell if these issues are solved by EOS or not.