[Hilarium ICO Talk] Understanding Agreement Algorithm with EOS

Hello Everyone, this is Chris Kim from the HILARIUM FOUNDATION. 

Previously, I introduced a method to create an EOS wallet. 

As Hilarium is preparing for EOS-based reward platform, 

we are always following EOS’s updates with interest.

EOS is mainly composed of web assemblies, so that it can be run quickly on web browsers like Smart Contract. 

EOS can be understood as an operating system that can run 

Dapps like Linux or Android. 

EOS Blockchain adopts the DPOS method, which enables transaction to be completed at a faster speed than Ethereum. 

The biggest advantage from this is that, along with fast transaction processing, the user doesn’t need to pay any commission fee and the developer pays with EOS. 

By holding EOS Coins, developers of Dapp can secure transactional bandwidth.

For these reasons, many free apps like messenger programs, SNS, search engines and Wikipedia DPI are highly likely to be replaced 

by EOS-based Dapp.

It received investments from several famous investment companies like TomorrowBC—Google Chairman Eric Schmidt’s venture investment company. 

Furthermore, in Weiss Ratings’s first cryptocurrency credit rating, 

it received a B grade (joint first place) along with Ethereum.

Let’s take a closer look at agreement algorithms like DPOS 

selected by EOS.

Consent algorithm is a method used by Blockchain to prevent problems like double payment. 

In other words, in order to be selected as an official block, published transactions have to be collected to form blocks during a certain period of time, then an agreement needs to be reached by minors all around the world. 

However, if everyone is allowed to participate without cost, it will be hard to reach a proper agreement. 

Thus, there is an adequate entry barrier called POW (when based 

on computing power) or POS (when based on the amount of holding coins).

The biggest problem of POW is that its power consumption is huge, and its hash power tends to centralize.

POS and DPOS provide solutions to these problems.

Both POS and DPOS can participate in the block formation process even without large hash power, as long as there are coins. 

You can think of POS as a direct democracy and DPOS as an indirect democracy. 

For POS, since the block creator is selected randomly in proportion to the amount of coin holding, the more coin one has, the higher chance one gets to participate in more block formation process.

On the other hand, for DPOS, one can participate in the election of certain representative notes in proportion to the amount of holding coins, and block agreement process is entirely delegated to representative nodes.

As only representative nodes participate in the agreement process, DPOS is a hybrid type that combines the benefits of both decentralization and centralization. 

Furthermore, at STEEM and BITSHARE, it has already proven its ability to manage the amount of transaction far beyond Bitcoin and Ethereum.

The reason why coins made with EOS can process millions of transactions per second is that it has chosen DPOS. 

It is one of the blockchain agreement mechanisms, like Bitcoin’s POW and Ethereum’s POS. 

Blockchain’s agreement algorithm is constantly developing, and DPOS is currently known as the most practical and efficient method.