EOS is one of the investment-worthy cryptocurrencies for many investors as there have been constant rallies around its platform, EOS.IO. The outstanding ICO, which lasted for a year, also helped to put it in the spotlight. But one question to consider is whether EOS will live up to its reputation. Is EOS a good investment? While this question is a simple one, we may not have a precise answer for it. However, we will briefly discuss the platform and identify factors that drive the price of EOS.
The platform in a nutshell
EOS.IO is an open-source protocol built by Daniel Larimer, with a vision to create a decentralized blockchain accompanied by lightning-fast transaction speed and little or no transaction fee. The platform focuses more on smart contracts to push for the adoption of decentralized apps.
Although many cryptocurrencies still struggle to improve their transaction speed, EOS is changing the narrative. The network already has plans to facilitate a million transactions per second and improve smart contracts.
The EOS network also has notable similarities with Ethereum, but the difference is in the consensus mechanism. EOS uses a Delegated Proof of Stake (DPoS) mechanism, which saves time and is more efficient since conventional mining is not required. In addition to that, miners or validators are not chosen based on the number of tokens they have but through a more democratic process.
It has also received substantial attention and support in a short time, despite being underdeveloped and young. This, in turn, explains the amount of attention it would gain when it is fully developed.
The EOS network is user-friendly and relatively simple. It also has storage and server-hosting features that are suitable for organizations.
Factors that drive the price of EOS
Like we mentioned earlier, we do not have a definite answer to if EOS will live up to its reputation, but let us consider the factors that drive its price. They include:
- The crypto market
- Increased adoption
- Network improvement
The cryptocurrency market
EOS is currently ranked 14th in the cryptocurrency market with a market cap of $2,929,576,070. It has a circulating supply of around 950 million altcoins and a hard cap of 1 billion tokens. Ideally, market prices are determined where supply and demand meet. But this theory does not apply to the crypto market as cryptocurrencies have a hard cap on their supply, leaving demand as a primary factor in price determination. In other words, the value of a cryptocurrency lies in the perception of the consumer. And since cryptocurrencies are gaining mainstream adoption, this will naturally boost the value of the coin. Meanwhile, the competition between EOS and Ethereum also poses a threat to the price of EOS.
EOS’s features make it ideal for adoption on a massive scale. It is not just suitable to be a digital payment platform; it also facilitates blockchain adoption via smart contracts and decentralized apps. This increased adoption will eventually increase the perceived value of the altcoin and drive its price up.
The concept behind EOS has naturally made it attractive to many people. Its potential is also one of the reasons behind the successful ICO. Although the network is still underdeveloped, it has fulfilled some of its promises by offering massive scalability at no cost. This explains why its prospects will undoubtedly push its price up in 2021 and beyond. The reputation of the founder, Daniel Larimer, in the crypto industry is also a positive determinant of the future of the altcoin.
Advantages of EOS
- EOS is highly scalable, cost-effective, and user-friendly.
- It processes as much as 1000 transactions per second and is aiming at a million per second.
- Its Delegated Proof of Stake mechanism makes the network more democratic and also guarantees higher efficiency.
- Block producers who invest in the network have a stake in EOS.
- General market sentiments seem positive, especially long-term.
- In May 2018, hackers were able to identify some security issues with the network.
- There are also some concerns about the decentralized network, as 49.67% of EOS coins are available on a few top addresses. So if there is any collusion between these addresses, the network may become centralized, and a few will gain authority over the platform.
- The involvement of Block.one in the network is also a major turnoff for many crypto enthusiasts.
- The platform is in constant competition with Ethereum.
The reputation of EOS does not outweigh market volatility. Therefore, we advise you to make further inquiries and have a personal opinion about your investment portfolio, as LightBlocks Media will not be accountable for any loss.