An oft-heard argument among Crypto enthusiasts is Coin A vs Coin B. Which is better and why? Not coincidentally it tends to align with the coins they own, which makes logical sense as one would want to invest in what they believe in.
One of the more high profile battles we've seen over the last year or so is EOS vs Ethereum. In order to begin to dissect this, we need to first do a quick introduction of the 2 coins.
Ethereum. A Better Bitcoin?
Ethereum was born out of an interest in having Bitcoin 'do more'. Bitcoin, being Digital Gold, it really did not make sense to have rapid iterations and improvements to Bitcoin at the protocol level. In fact, the Bitcoin Scripting language has only a few dozen opcodes, is Turing-incomplete and does not allow for constructs like jumps or loops that one takes for granted in most other programming languages.
While this seems constrained for someone that wants to build complex applications on the protocol, it has been built that way by design. It reduces the attack surface that someone, say a hacker, has on Bitcoin. There is only so much you can do with the language, which makes its small surface area easier to secure. This is exactly what one would need from a currency whose goal it is to be a reserve asset and a store of value.
So what is one to do if they want to do a lot more with blockchain-based protocols? Well, Vitalik Buterin's answer was to fork the Bitcoin source code, and introduce Solidity, a Turing-complete language as a way to program Smart contracts into the Blockchain. This greatly expanded the scope of applications that could be implemented on the blockchain. Thus came into being Ethereum, a Cryptocurrency with a decidedly different goal than Bitcoin: To be a censorship resistant decentralized distributed computing platform.
Forgive the clickbait-y title for this section of the article: No, Ethereum is not a better Bitcoin. They were meant to serve different purposes.
Performance. Where art thou?
Given that both Bitcoin and Ethereum share the goal of Decentralization and Censorship resistance, it would necessarily follow that it takes much longer for a set of decentralized nodes to reach consensus. It's a design choice that the aforementioned goals are more important to these protocols than performance. Criticisms of their transaction throughput / capacity are therefore somewhat misdirected.
The solution both protocols have taken to the 'performance question' is to innovate one level above the protocol layer with Lightning network and Liquid for Bitcoin and projects such as Plasma, Sharding and others for Ethereum.
EOS - A top down approach
While Ethereum came out of an interest in making fully functional Blockchain-based Smart contracts possible, EOS came from distilling down the requirements for industrial-strength Blockchain apps, based on a set of learnings from 2 other high-profile Blockchains: Bitshares and Steemit.
The creator of these 3 blockchains, Dan Larimer was interested in providing a set of building blocks that made sense to engineers and developers from more traditional web-based development environments i.e. having the notion of Users, Privileges, and Accounts along with some form of Account recovery mechanism. Smart contracts could also be programmed in traditional software programming languages and developers did not necessarily have to learn a new language, Solidity.
The other main requirement was to be able to support and sustain serious transaction throughput, without which real world apps, with real usage would never come to be. Unlike Ethereum and Bitcoin which have 1000s of nodes and miners around the world, EOS went with a model where there are 21 delegates or Block producers secure their blockchain.
These delegates are voted in by EOS token holders using what is known as delegated Proof-of-Stake (dPos) consensus, which is another Dan Larimer innovation. In theory, this allows for high performance as the 21 block producers can reach consensus and process transactions much faster, while also allowing bad actors to be voted out by the EOS token holders if they are found doing something malicious.
The Censorship resistance test
The trade-off in achieving a high-performance blockchain has been that transactions are not truly censorship resistant as the EOS block producers have been able to rollback transactions that they wanted to, ostensibly for good purposes, but that misses the point of censorship resistance: which is that all transactions are treated equally, whether you like them or not.
To be fair in this comparison, even though Ethereum is decentralized and more resistant to censorship in theory, there was an incident where they were able to successfully hard fork Ethereum and roll back transactions where 100s of millions of dollars were lost in the DAO hack, proving the point that it's not just about technology, but about people as well.
Having a central head figure like Vitalik has not proven to be without downsides for Ethereum. On a side note, if you really believe in the promise of Ethereum, but did not like the DAO hack rollback, you can check out Ethereum classic, which is the coin with the original unaltered Ethereum chain.
That's what's so great about Crypto. A flavor for everyone. So, what's the verdict on Ethereum vs EOS. Find out in Part II :-)
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Gautam Sampathkumar
CEO / Founder, IndraCryptoCapital
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