EOS cryptocurrency, even without presenting a working platform, was almost the main breakthrough of last year. A unique technology, well-known developers and one of the most successful crowdsales in the entire history of the cryptocurrency market – not so many investors have been able to pass by such a promising project. Many call EOS the main competitor of Ethereum. How do two top cryptocurrencies compete? Why did the competition between EOS and Ethereum become possible at all and whose side is better for investors to accept? We will describe in this article!
The competition of EOS and Ethereum: the problems of Ethereum
Ethereum consistently ranks second in the cryptocurrency rating by market capitalization and is in the TOP 5 coins with the highest value. However, the internal problems of the network cause concern to the members of its community and play into the hands of the developers who create “improved versions of the ethereum”.
With an increase in the number of operations, the network bandwidth inevitably falls, and users have to wait hours or even days to wait for their transactions to pass.
The Ethereum network is catastrophically overloaded. It is estimated that there are about a million transactions per day, or even more. In addition, hundreds of decentralized applications and ICO are running on Ethereum. The network virtual machine simply does not cope with such loads.
Currently, Ethereum has a throughput of only 15 transactions per second. And this is after numerous technical improvements and improvements. Last year, a real breakthrough was an increase in the rate to 10 transactions per second.
However, the demand for Ethereum does not fall, and the speed of the network further slows down. Developers can not solve the problem, and ordinary users lose their money in the market, where a lot decides the speed of transactions.
In January of this year, when Ethereum’s workload reached a peak (about 1.5 million transactions per day), many thought that the network had collapsed. Transactions with ETH did not go through, and top exchanges (Bitstamp, Bittrex, Kucoin, and others) reported that all operations with cryptocurrency were frozen.
If the network barely manages to process 500 thousand transactions a day (Ethereum can work today at about this level), and there are more than a million transactions in the queue, they will have to pay more to complete them.
In January of this year, the commission for one simple transaction in the Ethereum network was 3 cents. It would seem that this is a penny compared to the thirty dollars that the senders of Bitcoin transactions had to pay a year earlier.
Yes, but the situation was aggravated by the fact that transactions on the Ethereum network are often sent between applications, and for their users it flies a pretty penny. In addition, the launch of smart contracts consumes more and more gas.
The network faced a bug in the same January, unfortunate for Ethereum, because of which the transaction commissions were set not according to the set algorithm, but at a randomly inflated rate. Many users fell into a stupor when they saw in the column with the commission a sum with several zeros.
The developers created it to gradually transfer Ethereum to PoS mining. However, during the trial launch of “Casper”, it turned out that the protocol broke into several separate chains, none of which could connect to the main blockchain.
Problems with the test protocol gave reason to doubt the technical base of Ethereum. They became another reason (after braking the network, increasing commissions, a scandal with DAO and hard forks) to look for an alternative to the broadcast.
There were more than enough alternatives. Many developers tried to repeat the success of Vitalik Buterin and create a cryptocurrency that is as similar to Ethereum as possible. “Improved versions of the ether” called Ripple, Cardano, NEO, Tezos and many other altcoins.
EOS and Ethereum competition: EOS competitive advantages
The company Block.one presented its cryptocurrency in the summer of 2017, when Ethereum problems had not yet reached its current level. Nevertheless, Den Larimer, the main developer of EOS, has always stressed that his cryptocurrency is better, more promising and more practical than Ethereum.
The developers paid special attention to the convenience and ease of use of EOS. They plan to create a kind of social network in which not addresses consisting of many numbers and letters, as in other cryptocurrencies, but users with nicknames interact.
For example, the user @CryptoBiz will be able to make a transfer to the user @Reader. To do this, you just need to go through the identification and add the right person to your contact list.
ICO EOS ended less than a week ago and brought $ 4 billion in investment to its creators. This is a record figure, which adds a few more EOS points as the main competitor of Ethereum.
Cryptocurrency ranks fifth in the CoinMarketCap world ranking (12.4 billion dollars of market capitalization). And its price went into an uptrend and at the time of this writing is $ 13.8.
For a long time holding an ICO, thousands of people learned about EOS. Including those who have been looking for a long time, which cryptocurrency to choose instead of the last position of the ether. Dan Larimer often criticizes Ethereum in an interview and, as experts say, became Buterin’s main hater.
And not so long ago it became known that EOS developers are trying to manipulate the course of ETH. They collected funds during the ICO on the air, and on their website they directly wrote that they could spend money at their own discretion. And in March of this year, they threw out almost 200,000ETH on the stock exchange, which literally lowered the rate of Ethereum in a day.
Competition EOS and Ethereum: what to choose an investor?
The developers are well aware of network problems that bother users and play into the hands of competitors, and the Buterin team is already looking for solutions to the main problems of Ethereum.
At a recent conference, Vitalik Buterin paid special attention to the topic of low transaction processing speed in Ethereum and voiced two tools with which his team plans to correct the situation.
The only time – for the introduction of new protocols will require hardfork. And, as we remember, at one time fork, associated with the burglary of DAO, split the Ethereum community into two warring camps.
However, experts do not see the prerequisites for the collapse of the Ethereum network. The cost of cryptocurrency on the background of its own problems and the success of EOS has decreased, but after updating the protocol it can go up again. Therefore, experts advise not to dispose of assets in ETH, but to keep them for long term.
As for the EOS cryptocurrency, it still remains a good option for short and medium-term investments. If soon developers introduce new applications that will be popular, the value of the coin will go up.