EOS emerged as a dazzling star in the cryptocurrency market, with its circulating market value once surpassing Litecoin to secure the fifth position globally. Compared to Bitcoin and Ethereum, EOS demonstrated significant upgrades in data throughput and transaction efficiency. However, its underlying mechanism has been questioned for potentially deviating from the foundational principle of blockchain—decentralization.
Among various digital currencies, EOS has been particularly dynamic, surging over 40% from April 11 to 17. It broke through the $8.00 and $9.00 thresholds and temporarily overtook Litecoin in market capitalization rankings.
EOS (Enterprise Operation System) is a blockchain platform founded by the "programming prodigy" BM (ByteMaster, real name Daniel Larimer). The platform's native token, EOS (also known as "Pomelo Coin"), has drawn significant industry attention due to EOS's technical advantages, positioning it as a potential leading mainchain after Bitcoin and Ethereum.
How EOS Surpasses Ethereum in Performance
Breaking Through Network Efficiency Limits
The most notable advantage of EOS over Bitcoin and Ethereum is its dramatically improved data throughput and transaction efficiency. This breakthrough has sparked widespread excitement and speculation within the industry.
It is well-known that blockchain technology inherently suffers from high latency and low data throughput, which are major constraints for broader application. For example, Bitcoin’s network typically requires tens of minutes to confirm a transaction, with a data throughput of only 7 transactions per second (TPS).
Although Ethereum improved upon Bitcoin’s network efficiency, it still struggles with latency and limited throughput, handling only about 30–40 TPS. The popularity of applications like CryptoKitties once congested the entire Ethereum network, causing delays and frustration for users.
In contrast, EOS boasts vastly superior data processing capabilities. According to its whitepaper, EOS can achieve an average confirmation speed of 1.5 seconds and a throughput of 3,300 TPS. Through parallel chains, it theoretically could reach millisecond-level confirmation speeds and up to one million TPS in the future.
The Super Node Mechanism
Trading Decentralization for Speed?
EOS achieves its impressive transaction speeds by reducing the number of nodes. Unlike Bitcoin and Ethereum, which have thousands of nodes, EOS uses a Delegated Proof of Stake (DPoS) consensus mechanism with only 21 super nodes responsible for producing blocks. These super nodes are elected through voting by EOS token holders.
These super nodes function like powerful miners in the Bitcoin network, tasked with recording and computing all data on the EOS network. However, unlike other distributed networks, EOS super nodes do not need to broadcast data to all global participants—only to the other 20 nodes. This drastically increases the network’s operational speed.
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Competition for Super Node Status
Efficiency at the Cost of Fairness?
While EOS's technical advantages have garnered attention, they have also sparked controversy. According to the EOS whitepaper, super nodes receive the majority of the annual 5% inflation-based rewards—approximately 2.38 million EOS tokens per node per year. At current prices, that translates to over 100 million RMB annually per node.
In addition to monetary incentives, super nodes also hold voting power within the EOS ecosystem. No application can bypass their authority, effectively granting them a senate-like role.
The lucrative rewards have attracted numerous players to compete for super node status. Participants from China include Blockchain Gravity Zone, EOS Lao Mao, Coin Capital, and others. Internationally, candidates from the United States, South Korea, and over 30 other communities have joined the race.
The competition has led to vigorous campaigns, with allegations of vote-buying and collusion. Critics argue that the super node competition is essentially a struggle for power and profit.
Regardless of the final election results, one undeniable outcome is the increasing centralization of the EOS network. The DPoS consensus algorithm, controlled by just 21 nodes, arguably contradicts the decentralized nature of blockchain.
Moreover, once elected, these super nodes not only receive inflation rewards but also hold significant influence over the EOS ecosystem’s development. Disagreements over profit distribution could lead to further centralization or even hard forks.
Balancing security and efficiency with fair power distribution among the 21 super nodes remains a critical challenge for the EOS core team.
Is Absolute Decentralization Possible?
EOS Chooses to “Make a Difference”
Ethereum founder Vitalik Buterin criticized EOS’s DPoS mechanism in a blog post titled “Governance, Part 2: Plutocracy Is Still Bad.” He argued that DPoS voting could harm the long-term development of underlying blockchain platforms, reintroducing systemic flaws that cryptocurrencies were meant to overcome.
In response, BM published “The Limits of Crypto-Economic Governance,” explaining the intent behind DPoS. He emphasized that both he and Vitalik share the goal of reducing social corruption and maximizing freedom but differ in their fundamental assumptions.
BM posited that DPoS might be a more practical compromise between democracy and decentralization. While Vitalik’s approach is more ideologically pure, BM believes cryptographic methods alone cannot address subjective judgments or discern truth.
BM concluded that both are tackling challenging issues in human governance. He advocates accepting subjective community opinions through voting, lowering barriers to creating new communities, and allowing market competition to reward efficient systems and punish corrupt ones.
Vitalik’s vision for blockchain governance resembles a “laissez-faire” approach, extending Bitcoin’s original purpose as a peer-to-peer electronic cash network where everyone has equal access and participation rights.
In contrast, BM’s approach is more pragmatic—EOS aims to become a large-scale platform for decentralized applications, prioritizing efficiency over perfect decentralization or absolute fairness.
The Inherent Trade-Off in Distributed Systems
Since the 20th century, consensus algorithm debates have persisted. The FLP Impossibility theorem indicates that no algorithm can perfectly achieve both safety and liveness—trade-offs are inevitable.
In all distributed networks, the CAP theorem implies that efficiency and decentralization are often conflicting goals. This leads to different blockchain projects making different compromises.
Cryptocurrencies like Bitcoin, Litecoin, Monero, and Zcash emphasize fairness, justice, and peer-to-peer ideals. In contrast, application-oriented platforms like EOS may sacrifice some decentralization for efficiency.
It remains to be seen which model will prevail or whether both can coexist. Until the EOS mainnet launch in June 2018, many questions remain unanswered. Nevertheless, as a strong competitor to Ethereum, EOS is poised to influence the future evolution of blockchain technology.
Frequently Asked Questions
What is EOS?
EOS is a blockchain platform designed to support decentralized applications. It uses a Delegated Proof of Stake (DPoS) consensus mechanism and aims to offer high scalability and fast transaction speeds.
How does EOS achieve high transaction speeds?
EOS uses a limited number of super nodes (21 in total) to validate transactions. This reduces the need for broad consensus across a distributed network, enabling faster processing and higher throughput.
What are the criticisms against EOS?
The main criticism is that EOS sacrifices decentralization for speed. With only 21 super nodes, the network is more centralized than Bitcoin or Ethereum, raising concerns about governance and potential misuse of power.
Can EOS be considered truly decentralized?
While EOS incorporates blockchain technology, its super node structure makes it more centralized than many other networks. It represents a trade-off between performance and decentralization.
What is DPoS?
DPoS stands for Delegated Proof of Stake. It is a consensus mechanism where token holders vote for a limited number of delegates (super nodes) to validate transactions and maintain the network.
How does EOS compare to Ethereum?
EOS focuses on high transaction speeds and scalability, making it suitable for applications requiring rapid processing. Ethereum, while slower, offers a more decentralized structure and a well-established ecosystem for smart contracts and dApps.