What is the EOS Coin?

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The EOS coin project is one of the most intriguing new coins to hit the market in quite some time. However, the potential this coin has to become a viable alternative investment for investors has been somewhat squandered by a number of characteristics that make it a poor choice for diversification or speculative play. There are several key issues that the EOS coin has in common with other similar-sounding but more diluted coins, and this article will explore these issues and how they can affect the future of EOS.

One of the biggest issues associated with EOS, and many other coins, is a misunderstanding about how blockchains work. I have heard it repeatedly claimed that blockchains are different from EOS simply because they use the blockchain for financial transactions. This is not entirely accurate: blockchains provide a record-keeping system that is more complex than this, and EOS merely uses the blockchain for a specific business function.

In fact, EOS is a very simple coin that provides functionality that would be difficult to implement using traditional digital assets. Its proof-of-stake process is among the simplest methods of a stakeholder voting mechanism that I have ever seen. Rather than a central authority and people voting on "electing" a certain solution to a problem (or a chain of solutions) it is essentially just an "electing" system where users are incentivized to participate by paying a lower transaction fee to the network rather than increasing the block size limit.

A second issue is that many proponents of EOS and similar coins try to define their coin as a potential hedge against inflation. However, the fact is that an EOS coin is not backed by any tangible assets; it can be mined without the need for precious metals. However, the vast majority of EOS will be mined with precious metals, especially once they start to gain popularity among traders. This makes this specific coin (which may also be referred to as Eth) a lousy choice for holding and producing rental income.

Finally, there is a misunderstanding about why EOS exists. Many of the claims that are made about the utility of EOS is simply a smokescreen. What EOS is essentially doing is providing a company with a unique and interesting way to make a profit while sitting on a completely untapped resource.

The reality is that there is no way to mine EOS coin in a traditional sense. That's why it is referred to as a potential short-term hedge against inflation - because EOS blocks are programmed to settle at a certain rate based on the price of the precious metals mined into them.

While EOS is certainly interesting, I think that those who are claiming that EOS will be a moneymaker will be disappointed. If this new coin was truly as valuable as some claim, it would be a primary target for miners and speculative investors everywhere. Unfortunately, the market appears to be over-saturated with "faux 'crypto' coins", and the price of the first few million EOS remains to be seen.

For the time being, I expect EOS to be a long term investment. But for now, the risk and volatility of this particular coin is simply too high.