What is EOS? A Beginner’s Guide to EOS and Tips for Investing in EOS

Last Updated January 20th 2022
11 Min Read

The power behind this new and improved platform is its ability to offer a platform for decentralized applications (dApps). So far EOS has a market cap of $2.7 billion. Placing itself at the forefront of decentralized, blockchain technology, EOS enables the advancement, development, and production of commercial-scale dApps on its platform. Although similar to many other cryptos, EOS attempts to tackle common problems that other coins have been unable to solve, such as speed, scalability, and flexibility.

What Is EOS?

There’s the EOSIO network, and there’s its native coin, EOS. EOS is a type of blockchain technology that prides itself on its decentralized operating system. This decentralized blockchain aims to process transactions at a much faster pace with no transaction fees along with the development of smart contracts. This would give EOS the upper hand in blockchain technology, seeing as many other networks with smart contracts aim to speed up transactions, such as Ethereum (which can only process 15 transactions per second).

The framework behind EOS aims to operate as a functioning system with unique modern features such as cloud storage, user recognition, and server hosting. These features along with the rest of the framework are supposed to ease and support the development of dApps, making them accessible and streamlined. dApps are a modern mechanism used by many blockchains to ease the process of performing transactions.

Where Did It All Start?

An organization called Block.one had originally founded EOS, but more so the brainchild of Dan Larrimer. But it all began with the release of its whitepaper in 2017. The whitepaper outlined its promise toward a decentralized platform with a unique level of speed, enabling the processing of thousands of transactions per second.

On top of this, the whitepaper focused on the plan for EOS to be the number one operating system for decentralized applications featuring aspects such as server hosting, integrated user authentication, and cloud storage.

Initially launched in June 2018, EOS is a blockchain-based open-source software that launched on a record-breaking year-long ICO which had begun in June 2017. Throughout the duration of the ICO, roughly one billion coins were allocated as ERC-20 coins. The company that manages EOS software is Block.one, with offices globally located in Hong Kong and Los Angeles, to name a few. Currently, Block.one holds 10% of the EOS coins.

Would you consider investing In EOS?

invest in eos

Sceptics On EOS

Some of the main concerns behind EOS include competition and centralization. EOS has many competitors besides Ethereum. Some of them include NEO, RChain, and Rootstock RSK. This means that EOS has to continuously show improvement and dedication to its development to maintain its spot on the market. 

Additionally, although EOS’ consensus algorithm poses a great advantage, for some it creates fear that EOS may in fact be more centralized than it seems to show. Since EOS governance includes 21 block producers at a given time, and that creators are voted for based on stakeholders, this shows characteristics of a democratic governing system, intensifying concerns. Furthermore, the fact that without operating a full-node, people are unable to inspect or audit the network system, therefore pushing those decentralization concerns.

However, in spite of these concerns, EOS still remains one of the strongest players on the market, with dApps and blockchain smart contracts encouraging a promising network with lots of profitable plans in the future.

Why Invest In EOS?

There’s no doubt that it’s difficult to choose from all the cryptocurrencies out there in the market. There’s a lot of potential that comes from each blockchain and it’s difficult to assess which are worth the investment and which you should turn your back on.

Why you should invest in EOS?

1. Scalability

EOS comes with being more user-friendly and scalable, packaged with a web toolkit for interface development and self-describing interfaces. This comes along with the development of industrial-scale dApps, unlike any other current cryptocurrency.

2. Free Transactions 

Many blockchains require you to pay a fee in order to process transactions. EOS however, uses the block-producer model based on services delivered and billed by dApp developers, to decide how payments can be charged.

3. Consensus Algorithm

Unlike other cryptocurrencies which mainly use the Proof-of-stake protocol, EOS uses the Delegated Proof of Stake (DPOS) protocol. On an ongoing basis, creators are voted for by the witness node network, which consists of dApp individuals staking their tokens for computational power. Witness nodes simply have an interest in getting the best potential block developers, attributing the crypto’s decentralization groundwork.

4. dApps 

As this topic has been touched, it’s one of the most advantageous aspects of EOS. The cryptocurrency offers the ability to develop dApps, meaning that anyone can create one and let it run on the blockchain platform. The good thing about EOS is that there is no need for smart contracts to power dApps, instead, they’re powered by dApp transactions, proving to be more dynamic and effective.

The EOS price prediction from CoinSwitch forecasts that there may be long-term steady growth for the coin. With that said, it’s predicted that in 2025, the price of EOS may stand around $106.77, posing a bullish and confident prognosis.

Read More: EOS Price Predictions

How To Invest In EOS?

The process tends to be similar for each cryptocurrency, and the first step will always be to find an exchange platform where you can buy your tokens for EOS. This will involve creating an account, of which will request identification for verification. Then you will have to store your coins in a wallet. This wallet will be used to store all your EOS tokens and each wallet will have a private key to which only you have access.

It is crucial to note that you cannot trade fiat currency for EOS. In this case, you’ll have to purchase another cryptocurrency such as Ethereum or Bitcoin with your fiat currency and then use that to buy your EOS.

invest in eos

Tips Before Investing In EOS

1. Use a crypto wallet

Your EOS will have to be stored in a digital wallet to ensure the safety and security of them. One of the best places to store your EOS will be in an offline cold storage hardware wallet or a mobile smartphone wallet available through various apps.

EOS wallets will have an active key and an owner key. What’s important is to keep your owner key exclusive to you only so that you avoid losing any of your assets or having them stolen. Keep in mind, if you by any chance forget a key, you won’t be able to regain access. Therefore, keep note of your keys.

2. Invest with a small amount, first

It’s absolutely crucial to remind yourself of how volatile cryptocurrencies can be before investing in any of them. The last thing you want to do is invest all your emergency funds when EOS is at its all-time high and have it drop within the hour.

This mistake is often made due to the hype when prices surge. But it’s important to remember that investing will always have risk tagged to it, and we want to avoid all the unnecessary risk we can. So be sure, that when you’re ready to invest, you head in with caution and avoid gambling your life’s savings for the heat of the moment.

3. Keep a long-term perspective

The more risk-averse option, especially for those entering the crypto market fresh, is to subtly keep a long term perspective on your investments. After gaining a secure experience, you may be interested in day-trading. However, in the beginning, you’ll want to test the waters. 

Store your initial investments and continuously stay up to date and follow the market, and assess what the best time to trade will be. It’s easy to immediately predict high prices, especially with price predictions being put out left and right, but trust your intuition and be patient with your trading urges. And with the optimism set out for EOS, you may thank yourself later for it.

4. Stay up-to-date

Research — that’s all it really is. You’ll notice that there are patterns and trends if you’re able to dig deep enough. It’s needless to say that you’ll want to keep updated on how your investments are doing.

Considering how volatile cryptocurrencies can be, ensure that you’re keeping track of its performance and prices over time to determine when the best time is to get your hands dirty. At the same time, it’s always a good idea to diversify your portfolio, so the more you stay informed, the more advantageous it will be for your investments when assessing how other cryptos are performing as well.

5. Tax laws may apply to your EOS

The IRS released a notice in 2014 arguing that cryptocurrencies are in fact labelled as property rather than a monetary asset in terms of taxes. If you plan to sell or purchase something with your EOS, for more than what you had initially purchased it for, then you will be liable for capital gains tax. Laws may vary depending on your location, however, it’s highly suggested to keep a record of your EOS transactions so that you can be prepared if anything comes up with the law. The last thing you’ll need is a fine knocking on your door.

To conclude, EOS is where you want to stay focused, particularly if you’re a developer. Its upper hand in dApps gives developers the leverage of gaining some experience with what the future will look like. Considering how much money is being poured into it right now, it would be a mistake to turn your back on it now.

This goes for any cryptocurrency purchase, but don’t ignore the risk levels involved with EOS. You’re placing hard-earned wealth into something with the hopes that you’ll be making more off of it in the future. Therefore, stay informed and don’t go throwing all your money in at once. 

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Key Points

  • EOS is a type of blockchain technology that prides itself on its decentralized operating system.
  • So far EOS has a market cap of $2.7 billion.
  • EOS enables the advancement, development, and production of commercial-scale dApps on its platform.
  • The framework behind EOS aims to operate as a functioning system with unique modern features such as cloud storage, user recognition, and server hosting.
  • An organization called block.one had originally founded EOS in 2017.
  • It’s predicted that in 2025, the price of EOS may stand around $106.77.
  • You can’t trade fiat currency for EOS. You’ll have to purchase another cryptocurrency such as Ethereum or Bitcoin with your fiat currency and then use that to buy your EOS.

If you're thinking about investing in EOS, remember, there is an incredibly high degree of risk involved.