FREQUENTLY ASKED QUESTIONS (F.A.Q.)
- In a nutshell, what is EOS?
- Who is the team behind EOS?
- What does "EOS" stand for?
- What is the function of EOS tokens?
- What is the purpose of a year-long token distribution?
- What's the deal with the Terms of Service on the EOS website?
Token Distribution / Crowdsale Questions
- What do I need to do if I bought EOS tokens on an exchange?
- What does "registration" mean and what is the "snapshot"?
- Wait, you're telling me these EOS ERC-20 tokens aren't real EOS tokens?
- What happens if I accidentally sent tokens to the distribution address?
- What if I don't register the ETH address that holds my EOS ERC-20 tokens?
- If I bought EOS tokens through the official crowdsale, how do I figure out which period I contributed to?
- If I bought EOS tokens through the official crowdsale, how do I claim them?
- What if I bought EOS tokens through the crowdsale but don't see them in MyEtherWallet?
- What happens if the 'claim' process ran out of gas?
Questions About the Future EOS blockchain
- Why isn't block.one launching the official EOS blockchain? And if not them, who will?
- What happens if multiple EOS blockchains are launched in June 2018?
- How are block producers selected?
- How do accounts work on the EOS blockchain?
- Is there inflation and/or mining? How does that work?
- How does EOS Storage work?
- Will there be hard forks?
Addressing Fear, Uncertainty and Doubt
- Why is block.one raising so much money?
- Isn't EOS just a copy of Bitshares and/or Steem?
- With only 21 block producers, EOS doesn't sound decentralized
- Is block.one recycling ETH they've raised and contributing it back to the crowdsale?
- What happens if the EOS blockchain launches but doesn't honor the 1:1 token distribution?
- Won't Daniel Larimer just leave the EOS project after a little while to work on something else?
In a nutshell, what is EOS?
EOS is a smart contract platform with the goal of addressing the full spectrum of usability issues. It seeks a balance between security, performance, and usability with an ability to handle general purpose applications while also addressing the need for governance.
The resulting technology is a blockchain architecture that aims to scale to millions of transactions per second, eliminate user fees, and allow for quick and easy deployment of decentralized applications.
What does EOS stand for?
The development team intentionally left the meaning of "EOS" undefined. Some popular interpretations are:
- Evolution of Scalability
- Everyone's Open Society
- Enterprise Operating System
- Everything on Scale
- Ethereum on Steroids
- "Eos," the Greek goddess of the dawn
What is the function of EOS tokens?
There are three broad classes of resources that are consumed by applications running on the EOS network. Token ownership entitles the holder to an allocation of these resources. They are: 1) bandwidth and log storage (disk), 2) computation and computational backlog (CPU), and 3) state storage (RAM). In other words, tokens confer upon the owner network processing functionality.
This is valuable for the folks who want to run decentralized applicatons and smart contractso n the EOS blockchain. They can hold tokens and have access to the bandwidth that will allow them to run their application - as a result, users of the application won't have to pay gas prices to conduct transactions. If the application is finished and no longer needs the bandwidth, they can sell the tokens.
But what if you don't need the bandwidth or aren't going to run an application? You will be able to allocate (rent) your bandwidth to other folks who want it.
What is the purpose of a year-long token distribution?
The novel approach to the token distribution model is primarily intended to strengthen the success of a healthy functioning DPOS consensus mechanism. In order for the consensus model to operate successfully, it is critical that the network succeeds in spreading tokens far and wide throughout the ecosystem. In one sense, the distribution method is mimicking what a mining protocol might do in the early years of a PoW system.
Another benefit of the year-long token distribution is it protects the entire EOS community from being taken advantage of by a small group of rent-seeking distribution participants cornering the market and then selling the tokens back to the community at large. This has occurred many times in the past when token distributions were limited to a very narrow (24hr - 4 week) timeframe.
Here's how the token distribution is being carried out:
- 200 million (20%) of tokens were initially distributed during a five day period from 6/26/16-7/1/17)
- 700 million (70%) of tokens are currently being distributed on an on-going basis of 2 million per day for 350 days.
- 100 million (10%) are being held in escrow for block.one to keep their incentives in line with that of the EOS community. block.one's tokens will vest over a 10-year period at 10 million tokens/year.
What's the deal with the Terms of Service on the EOS website?
In taking a conservative approach to compliance and legality issues, block.one have decided to limit the scope of this project to creating an open source software (EOS) for the public good. No more, no less. That means they're not launching a blockchain and not conducting an "ICO" (which would confer ownership or investment expectation). This is reflected in the Terms of Service on the EOS website. To wit:
The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities, or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.
That statement is true and the funds they raise are revenue to block.one.
However: despite block.one's lack of involvement in the public EOS blockchain, the tokens can (and will) be used by the community who launches an EOS blockchain to determine the distribution of native EOS tokens.
What do I need to do if I bought EOS tokens on an exchange? Can I keep them there?
If you bought EOS tokens through an exchange you need to take four steps in order to make sure you'll receive native EOS tokens when the EOS blockchain launches.
- Transfer the tokens to your own ETH wallet to which you own the private keys. (A hardware wallet works for this as well). Do not leave the EOS tokens on an exchange because you do not know with certainty that the exchange will credit you the equivalent EOS tokens on the real EOS blockchain when it has been created in June 2018.
- Generate an EOS address (for the actual EOS blockchain)
- Execute the 'register' function from the EOS smart contract to link your ETH address to your future EOS address (the one you made in step 2, above).
- Execute the 'keys' function from the EOS smart contract to verify you have everything set up correctly. This proves your future EOS key (the one you generated in step 2) is correctly linked to the EOS ERC-20 tokens that are held in your ETH wallet.
There are several links in the Resources section that will help explain this process further.
What does "registration" mean and what is the "snapshot"?
You may have heard about "registering" your EOS (sometimes referred to as "mapping"). Here's the deal:
- Right now, the "EOS" tokens that are being traded are Ethereum ERC-20 tokens. They're essentially placeholders for the future, native EOS tokens on the actual EOS blockchain (once it launches).
- The protocol is set up in a way that is intended to do the following: if you hold 100 EOS ERC-20 tokens today, you will be entitled to 100 native EOS tokens once the blockchain launches.
- The way this is carried out is by pairing your ethereum address that holds your EOS ERC-20 tokens with an EOS key that you generate. That pairing process is what is referred to as "registering" your ETH address.
- Once the distribution is over, a "snapshot" will be taken of the Ethereum blockchain to associate the balance of EOS tokens held in your ETH address with the public EOS key that you have registered. That will allow you to obtain your EOS tokens on the native chain.
There are several links in the Resources section that will help explain how to take the necessary steps to register your tokens.
Wait, you're telling me these EOS ERC-20 tokens aren't the real EOS tokens?
Correct. The EOS tokens that are out there now are Ethereum ERC-20 tokens. The native EOS tokens don't exist yet because the EOS blockchain isn't live yet.
Think of the current EOS tokens as placeholders - when the EOS blockchain launches in June 2018, the native EOS tokens will be distributed on a 1:1 basis to holders of current EOS ERC-20 tokens. After that, there'll be no use for the EOS ERC-20 tokens.
What happens if I accidentally sent EOS tokens to the crowdsale contract?
If you accidentally sent EOS tokens to the crowdsale contract, those ERC-20 tokens are effectively burned. However, the EOS development team is working to include these lost tokens in the snapshot and allocate them to the appropriate address. As a result, you should generate an EOS key and register it with the source (ETH) address from which you accidentally sent the tokens. That way, if the development team succeeds in securing this backup method, you’ll be able to claim your tokens once the EOS blockchain is launched.
What if I don't register the ETH address that holds my EOS ERC-20 tokens?
The development team is working on a fallback that would still allow you to obtain tokens on the EOS native chain. That said, however, the development team urges you to register your ETH address with an EOS address you generate.
If I bought EOS tokens through the official crowdsale, how do I figure out which period I contributed to?
Plug your ethereum address in the “userbuys” function in MEW (this is free – it’s not a transaction, it’s exploring the blockchain), and if you put the right period in, it will show your contribution.
What if I bought EOS tokens through the crowdsale but don't see them in MyEtherWallet?
First, check your ethereum address on a block explorer (such as ethplorer or etherscan.io) – it could be that you’ve claimed them, but your wallet doesn’t show them. If you’ve got no tokens in your address on etherscan, and you’ve tried to claim for the correct period, then something must have gone wrong with your claim transaction (out of gas, perhaps?). If you look at your transactions on etherescan, it shows if you claimed tokens, and how many, or if they transaction failed with not enough gas.
You can also refer to the guides in the Resource section for troubleshooting the claiming process.
What happens if the 'claim' process ran out of gas?
Try using “claim” instead of “claim all.” Many folks have had success setting gas price lower (2 Gwei) and gas limit higher (20,000,000) - it results in the transaction taking a long time but it will be cheaper and will eventually go through.
You can also refer to @koyn's helpful article on Steemit: Minimizing the cost of gas when claiming EOS using MyEtherWallet
Why isn't block.one launching the official EOS blockchain? And if not them, who will?
block.one plans to not vote or launch the public EOS blockchain to promote community-driven spirit and further the decentralization of the platform.
There's a robust EOS community that collectively has a vested interest in seeing the launch of a healthy EOS blockchain. That said, it's unclear at this point in time who will take that task on. However, this may become more clear during the public testnet (December 2016-June 2017) where the community will likely coalesce around a group of viable block producers to launch the chain.
What happens if multiple EOS blockchains are launched in June 2018?
It's possible that multiple EOS blockchains are launched in June 2018. You will receive EOS tokens on every chain that launches.
In the event there are two or more EOS blockchains with the same initial distribution, no one will be able to sell tokens until at least 15% consensus is reached by users importing keys and broadcasting a transaction. It will be up to the community to evaluate the options and figure out which of several "identical" chains to adopt. Which also means figuring out which set of block producers the community trusts.
If two or more chains get 15% or more then it will be like ETH and ETC, the one with the most support will be able to claim the EOS ticker, the one with less will have to rebrand.
Any chain that doesn't honor the 1:1 token distribution or the 15% activation threshold will clearly be recognized as scammers in the eyes of the community and will be ignored for a chain that honors the spirit of the software.
How are block producers selected?
Block producers are selected by continuous approval voting by token holders.
How do accounts work on the EOS blockchain?
The EOS blockchain will allow you to create an account name that is 2 to 32 characters in length and will include account recovery functionality.
Is there inflation and/or mining? How does that work?
There are no miners in this consensus model, only block producers who produce 21 blocks (one each per round) in a 21 block/round setup. Within each round, the order of block producers is randomized. Block producers are rewarded by the creation of new EOS tokens. The software will award new tokens to a block producer every time a block is produced. In these circumstances, the number of tokens created is determined by the median of the desired pay published by all block producers. The EOS.IO software may be configured to enforce a cap on producer awards such that the total annual increase in token supply does not exceed 5%. If token holders (ie, voters) deem that block producers are taking more inflation than necessary (bad actors), they can vote the block producers out.
How does EOS Storage work?
All token holders will be paying for the storage of the network via a portion of the annual inflation. More specifically, those who will be storing files are exposed to this supply inflation as they are unable to sell their tokens until they delete their files. Those who require permanent storage effectively burn their tokens. As long as the rate of new storage requests is locking up tokens faster than the token inflation rate, then the currency will undergo effective monetary deflation. This will in turn increase the value of the tokens paid to block producers and enables them to expand the supply of storage. In the event that there is a significant reduction in storage demand, unlocked tokens may enter the market causing effective price inflation in excess of the natural inflation. In other words, the price of tokens may fall and the amount of storage block producers can afford to maintain will decrease. Fortunately, due to the lower demand, block producers can simply decommission drives to cut costs and reduce the available capacity. Alternative, they could lower the reserve ratio used to calculate the number of tokens that must be locked up to reserve storage capacity. The bottom line is that those who require storage pay for it via the time-value of money. This should result in no micropayments, no transactional friction and no surprise fees.
Will there be hard forks on the EOS blockchain?
From the EOS.IO Whitepaper:
Under normal conditions a DPOS blockchain does not experience any forks because the block producers cooperate to produce blocks rather than compete. In the event there is a fork, consensus will automatically switch to the longest chain. This metric works because the rate at which blocks are added to a blockchain chain fork is directly correlated to the percentage of block producers that share the same consensus. In other words, a blockchain fork with more producers on it will grow in length faster than one with fewer producers. Furthermore, no block producer should be producing blocks on two forks at the same time. If a block producer is caught doing this then such block producer will likely be voted out. Cryptographic evidence of such double-production may also be used to automatically remove abusers.
Why is block.one raising so much money?
block.one has stated that they had adequate funding for the development of the EOS software prior to launching the crowdsale. So what's the plan for all of the capital that's being raised?
According to multiple block.one team members, the revenue from the crowdsale will be invested into the EOS ecosystem to bulid & support the development of applications and infrastructure. (References: Brendan Blumer (CEO) via this announcement, Dan Larimer (CTO) via this Epicenter podcast interview, and Brock Pierce during this conference panel.
Isn't EOS just a copy of Bitshares and/or Steem?
At this point of development, the only similarity between Bitshares and EOS is Graphene, which is the entire reason EOS started as a fork of Bitshares to begin with. So no, EOS is not just a copy - it's a unique blockchain whose roots are in similar principles.
With only 21 block producers, how can EOS be decentralized?
This is a point of philosophical contention within the crypto community. At the highest level, here's the issue: some folks view EOS as centralized because there are only 21 block producers, versus a whole network of miners in a PoW consensus blockchain. Proponents of EOS argue that DPOS blockchains are, in a practical sense, more decentralized because PoW blockchains are controlled by a small handful of mining pools.
There's no objective answer to which consensus mechanism is better - it's a function of what you're choosing to sacrifice in the Trilemma (for background on the Trilemma, ctrl-f "trilemma" on this page). In other words, it depends you're functionally trying to achieve with the blockchain in question.
A chief aim of EOS is scalability and therefore has chosen a route that is weakest in the decentralized department. However, a great case has been made that the degree of decentralization achieved by 21 block producers in the EOS architecture is still sufficient and robust.
Is block.one recycling ETH they've raised and contributing it back to the crowdsale?
Main claims along these lines have been leveled at block.one and the development team. The accusations could be true but as of yet, no actual evidence has come to light. In response to these allegations, block.one has adamantly claimed that they are in no way participating in or altering the crowdsale in any way. What's more Brendan Blumer (block.one CEO) has stated that they are going to conduct an audit of their books to deliver complete transparency with regards to the crowdsale. His direct quote:
Our CFO and a President are in NYC now speaking with firms that will manage an internal inspection of books to provide public comfort that no recycling is going on; existing firms require a lot of understanding of the space before they can agree to an blockchain engagement, so this is a time consuming endeavour.
What happens if the EOS blockchain launches but doesn't honor the 1:1 token distribution?
- It's exceptionally unlikely that a scenario will play out where only one EOS blockchain is launched AND it doesn't honor the intended token distribution. It's just not going to happen.
- The EOS community is growing and there will be a collective interest in a legitimate chain. The community simply won't support an EOS blockchain that doesn't honor the token distribution.
- There are billions of dollars of block.one and venture-backed capital that is intending to be invested into the EOS ecosystem to support applications and infrastructure. It's unlikely that said investment will be deployed on a chain that doesn't honor the spirit of the EOS software.
Won't Daniel Larimer just leave the EOS project after a little while to work on something else?
Many critics of EOS cite Dan's track record with previous blockchains. They feel he abandoned Bitshares to work on Steem and abandoned Steem to work on EOS. So they conclude that he will ultimately abandon EOS to work on _____.
That is certainly one way to perceive Dan's track record. Another perspective is that he left each project in a healthy, fully-functioning state and in the hands of capable leaders to carry on the mission. EOS Collective encourages you to make this judgement for yourself.
That said, Dan has publicly stated his intentions going forward: that he is building the EOS software so he can have a robust platform on which to carry out all of his future projects. He likened it to "wanting to eat my own dog food." Does this mean he'll work on the core EOS software forever? Probably not. But it does mean that his intention is to continue his work in the EOS ecosystem and build decentralized applications on top of the EOS network.
The source of this statement is his interview on the Epicenter podcast, found here.