I watched several EOS-related videos on Youtube and I thought I'd share what I learned. The fact that EOS doesn't even exist yet and is now a strong #6 on the market cap is very telling. It doesn't even do anything and it's still beating all the API/ICO coins except for Ethereum. When it releases, there is a chance that it easily catapults to the #2 slot. Here's why:
EOS "ICO"
This video has a lot of good information. It explains a lot of the valuable qualities of EOS. Running an ICO is a complicated process with a lot of laws to follow. Block.One is developing the EOS platform and has a new business model to offer that will sidestep these complications. Instead of creating an ICO, the Block.One foundation can fund projects directly out of their own pocket, and then airdrop tokens onto EOS hodlers when said project goes live.
Advantages
Block.One will only fund valid and useful projects. Many ICO projects are scams. The money generated is all supposed to go into funding the project but it is hard to guarantee that is this happening. Sometimes over-funding a project can have a negative effect. The ICO team can just take the money and run. By having a more centralized authority like Block.One controlling the money it is more likely that new ICO projects are kept honest and within budget.
Developers can focus on creating the service instead having to worry about funding, allocation, and politics. When the project is ready to go live, the EOS airdrop creates even more reason for people to hold EOS tokens, and the new project has a built in audience of everyone that just got airdropped. This new model could be a win-win for everyone involved.
Flash-Crash Theory
Many people think that the Block.One foundation is going to flash-crash Ethereum when EOS releases in June. I've heard a lot of talk of EOS ERC-20 tokens being dumped on the market. This made absolutely no sense to me so I had to do some research to figure out how Ethereum, ERC-20 tokens, and ICOs actually work. To my understanding, this is how it goes down:
Ethereum ICO
When developers want to create an Ethereum ICO they have an idea with nothing tangible yet. They have a coin funded on hopes and dreams alone. The new ICO goes to the public with their coin. If you want to risk your money on this venture, you give your money to them. In return you get the ERC-20 ICO coins, and the ICO foundation buys Ether with your money to fund the project. You probably just trade Ether for the ERC-20 token... whatever... semantics.
Gas
Ether coins are the "gas" of Ethereum. You need them to pay for transactions on the blockchain. Traditionally, Ethereum ICOs have incentive to hold on to Ether so that they can validate blockchain transactions. However, EOS has no need for their Ethereum tokens.
Boom
EOS is not an Ethereum ICO; they don't need to validate Ethereum transactions. Therefore, it isn't ERC-20 tokens that are going to get dumped on the market, it's Ether itself! Speculators think that Block.One might take all their surplus funding, which is stored in the form of Ethereum tokens, and sell them all at once to buy back EOS tokens from their initial investors. I repeat, they are going to sell their Ether to buy back their own tokens... lol.
This is just a theory, but it's a very good one. It could flash-crash Ethereum while at the same time send EOS soaring to the #2 slot on the market cap. This action would create insane worldwide news coverage. Personally I think that EOS has a real shot of surpassing Bitcoin and becoming #1. This would be even bigger news that would bring millions upon millions of new people into the cryptospace. It would be good for all of us.
Investment opportunity
If the Block.One foundation is willing to take a loss like this just for publicity, guess who gains? Anyone that invests in EOS now and also anyone that invests in Ethereum during the flash-crash. Honestly, I think the flash-crash they may create provides more of an opportunity to generate quick gains, but EOS technology is far more exciting.
Maybe the correct move is to wait for a flash crash by setting low buy orders. Then, when the Ethereum market evens out, take the money you made and pump it back into EOS. It's a very safe play, either the flash crash happens and you make bank or nothing happens and you lose nothing.
How many Ethereum coins does EOS control?
I don't have exact numbers, but people are saying EOS controls 10%+ of all Ether. This is 10 million Ether. Can you imagine that? Owning 10% of your competitor's stock which you can use to make them look weak and you strong? It may be an opportunity that Block.One can simply not pass up.
In this video @dan explains his journey from Bitshares to Steem to EOS. Bitshares and Steem had governance issues and he couldn't get the coins to go into the direction that he wanted. He got very frustrated with the politics so he created EOS. In this video, he claims that any blockchain product he wants to create in the future, he can do it on EOS. This is a very exciting prospect because who wouldn't want to be on the team of a blockchain master like @dan? Imagine holding EOS coins and getting airdropped new coins that @dan makes! Spectacular!
DPOS
Steem and EOS are delegated proof of stake. It's the very efficient mechanic of electing witnesses to create blocks quickly and accurately without having to waste a bunch of computing power on a worthless hash lottery. I've talked a lot of trash about Steem and EOS because 21 witnesses doesn't seem very decentralized. What is @dan's obsession with 21? Is he a professional blackjack player or something?
However, @dan explains that mining pools are very similar to witnesses. Because Ethereum only has 4-5 mining pools and Bitcoin only has 2-3, Steem and EOS are WAY MORE decentralized and efficient than Bitcoin and Ethereum. Also, if you lose a witness you can replace them instantly. If you lose a mining pool you're fucked. If a 51% mining pool goes rogue... again, fucked. It's simply not as good as DPOS and there is nothing stopping DPOS blockchains from adding more witnesses dynamically in the future if they need to.
Parallel Processing
EOS will be the first blockchain ever to support parallel processing. This will allow EOS to scale indefinitely. In this video @dan claims that Ethereum will take 3-5 years to scale up. This is an eternity in the blockchain world of exponential growth.
Familiar programming languages.
Developers will be able to program on EOS using multiple kinds of programming languages. This will encourage businesses to flock to EOS over Ethereum because with Ethereum you have to learn a brand new language. This is unnecessary overhead.
Here are some more videos I watched but I feel like I've already covered everything I wanted to:
EOS could truly be the Ethereum killer.
It could even be the Bitcoin killer.
I hope so. It's worth it.
Thanks for the useful summary. You clearly have put a lot of effort into it. Upvoted and followed !
I don't think that block one would sell their eth in the mentioned manner. Instead , I think that they will sell chunks of it at high prices to gain as much as possible.
Of course, I agree on the technical suppiriority of eos.
BTW, what are the programming languages that will be available for eos developers?
a bunch of the popular ones like java, c++,python, etc
I also think it would be somewhat foolish to waste money on a short term gain.... but you never know.
Thanks for the summary. Pretty interesting to see if it will play out like that. Dan is great. Morons on this chain have ragged on him, flagged him, and he's the brain of it all, meanwhile all they are, are rich miners who can't invent anything worthwhile other than bid bots to screw the system up more, and they love to flag like asshole that they are. It's sad that these idiots have so much power and abuse it. I felt it and couldn't do a thing to stop it. EOS for the win!
Yeah the more I read about EOS the more I realize it's going to be amazing. People think that EOS is an attack on Steem but really the only thing that can kill Steem is greed.
@dan will force Steem whales to stop being greedy or face the consequences. Witnesses will be forced to adopt mechanics that will stop the corruption, or a better option will reveal itself... likely on the EOS platform. If @dan doesn't do it... someone else will. It's inevitable.
if you own or buy EOS before end of May you have to register them! otherwise you cold lose money!
https://steemit.com/eos/@solarwarrior/registering-eos-tokens
I was aware of this but it's certainly good to point out.
no worries... big fan of your posts.. just wanted to make some contribution..
Honestly I really want to buy EOS but the whole ERC-20 thing just bothers me.
alternatively wait until start of June... ;-) then you should be able to make a direct purchase...
🍼
lol what is that a milk bottle?
Yes‼️
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I will stick with investing very small amounts in new startups rather than the big boys. Doing alright so far and currently my portfolio is 153% up :)
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TrufflePigThanks ! What a great read ! I'm even more convinced that EOS is awesome