EOS vs Ethereum: A blockchain comparison

Ethereum and EOS are two of the world’s most prominent blockchain projects at the time of writing.

While Ethereum wants to decentralise world computing, EOS’s target is to run fast decentralised applications (dApps). To achieve these goals, each protocol uses a different consensus algorithm and a different governance model.

Ethereum has a strong focus on decentralisation at its core, while EOS provides speed by removing some of its decentralised features.

At the end of the day, depending on the purpose, both projects have their pros and cons.

In this article, I will dive deeper into each cryptocurrency protocol individually and compare them both in terms of security, scalability, and decentralisation – the three core aspects of any blockchain.

Ethereum (ETH)

Ethereum is a decentralised smart contract platform. Like Bitcoin, the Ethereum network has a token (Ether), a blockchain, nodes, and miners. However, unlike Bitcoin, the blockchain maintains consensus for a ‘virtual computer’ dubbed the EVM (Ethereum Virtual Machine). Distributed smart contracts can be created and deployed on the EVM.

Ether is the native token on the Ethereum network. There are around 100 million Ether on the network today, and the token is used to incentivise miners to run their mining hardware (which helps keep the network decentralised).

The current inflation rate of Ether is around 10% a year, but the aim is to bring this down to 1-2% with future network upgrades. To date, no hard cap has been placed on the Ether supply.

Ether tokens can be used for payments between users like Bitcoin, but they can also be used to power smart contracts. When running a smart contract, the Ether is turned into ‘gas’ to then power a smart contract on the EVM.

Think of this gas in the same way as gasoline you put in your car – you need a different amount of gas depending on how long your journey is or based on what type of road you are driving on. Smart contracts on the EVM work in very much the same way.

EOS.IO (EOS)

EOS.IO is a blockchain architecture designed to enable vertical and horizontal scaling of decentralised applications by creating an operating system-like construct upon which applications can be built.

The software provides accounts, authentication, databases, asynchronous communication, and the scheduling of applications across many CPU cores or clusters.

The resulting technology is a blockchain architecture that eliminates user fees and allows for quick and easy deployment and maintenance of decentralised applications in the context of a governed blockchain.

EOS.IO operates as both a base-layer blockchain and as a smart contract platform. The protocol works like a decentralised operating system and allows for the deployment of industrial-scale applications through a decentralised autonomous corporation model. The smart contract platform claims to eliminate transaction fees and also conduct millions of transactions per second.

The chosen consensus algorithm is based on DPoS, or Delegated Proof-of-Stake, meaning those who hold tokens on the platform may select block producers through a continuous approval voting system.

Anyone may choose to participate in block production and will be given an opportunity to produce blocks, provided they can persuade token holders to vote for them.

The EOS.IO consensus algorithm respects Byzantine Fault Tolerance (BFT) by allowing producers to sign all blocks so long as no producer signs two blocks with the same timestamp or the same block height. Once 15 producers have signed a block, the block is deemed irreversible.

Ethereum vs EOS

When a crypto protocol aims at increasing scalability, either decentralisation, security, or both will be negatively impacted. When a crypto protocol targets lower scalability, security and/or decentralisation will increase. This is known as the scalability trilemma.

Whenever a cryptocurrency project claims they have “solved” scalability, make sure you look out for the downside:

1. Is the project centralised? Some examples are Bitcoin Cash, EOS, NEO, and TRON. All these cryptocurrencies are able to scale in terms of how fast transactions process. However, all are much more centralised than Bitcoin or Ethereum.
2. Is the blockchain less secure? When looking into security, one must always keep in mind there’s short-term and long-term security. Therefore, the question any investor or enthusiast should ask is the following: “If there’s a successful attack on the network, how can it be reversed?” If the answer is through a roll-back, minting/distributing more coins, or any other solution that involves changes to the supply or coin ownership, the project cannot be secure because the blockchain isn’t immutable.

Comparing ETH and EOS, we can immediately see that while Ethereum is far slower and more secure, EOS is much faster and more centralised.

By comparing TPS and confirmation time, we quickly understand EOS was built to relay transactions faster. By looking at the number of validating nodes and consensus protocol, we clearly see Ethereum was built for security and decentralisation.