Active participation with intermediaries is required if one intends to get into an agreement in a world ruled by Blockchain, which, of course, will cost you something. This has an impact on the levels of success that your business can reach, relating to building more business relations.

Moving on to the Blockchain era.

Smart contracts, alongside Blockchain, have enabled businesses to create a decentralized ecosystem for businessmen to close business deals without having to involve third-party intermediaries. This has brought new horizons that businesses can be able to explore to their advantage.

This ‘new’ and wonderful technology was first featured in the limelight two decades ago when a cryptographer, Nick Szabo, wrote an article detailing how it works. However, it came to be known quite well only after Blockchain took it under its wing.

What Are Smart Contracts?

A smart contract is a software whose point of storage is the inside of a Blockchain. Their coding controls the transfer of assets between two or more parties after the predefined conditions have been met.

What Exactly Does a Smart Contract Platform Do?

A smart contract platform is a platform where smart contracts are created and executed. When it comes to smart contract platforms, there is quite a number in existence today such as Hyperledger Fabric, Cardano, Ethereum, NEO, EOS, Stellar and many more.

Of all these platforms, we shall lay our focus on the oldest of them all, which is also the most widely used, Ethereum, and the newest and hyped platform, EOS. EOS claims to be more efficient than its older counterpart, Ethereum.

In this article, we will compare the two giants head-on; Ethereum vs. EOS. This will enable us to understand which platform is more powerful and which one can advance to further levels of success.

Both these platforms, Ethereum and EOS, are amazing smart contract platforms that businesses have leveraged to help them execute smart contracts and Decentralized Applications Development. EOS is quite unique as it only charges at the initial stages (EOS cryptocurrency). They also don’t charge any transaction or network development fees. On the other hand, Ethereum charges Gas fees for businesses to be allowed to execute their smart contracts or run their dApps on this platform. The payment is in the form of Ethereum currency and is charged per transaction.

Ethereum

Ethereum is an open Blockchain platform that enables developers to create as well as execute smart contracts on the Blockchain network. Solidity, which is a coding language developed by Ethereum, specifically for creating smart contracts, enables Blockchain app developers to execute smart contracts.

This platform makes use of the proof-of-work consensus. However, it plans to upgrade this to the proof-of-stake consensus.

Besides being the leader in the field of development of smart contracts and decentralized applications, Ethereum also boasts of its own cryptocurrency platform known as Ether.

EOS

Even though EOS has a similar method of execution with Ethereum, it also has some factors that differentiate it. EOS was invented by Daniel Larimer, who’s also the guy behind the Graphene technology and also the man who implemented the POS consensus before any other developer.

Per each second, EOS can execute more contracts than Ethereum. Looking into the future, EOS has a greater potential to expand and it will also include special elements like plasma, sharding and it also comes with the unique benefit of dPos and TaPos (proof of stake consensus).

EOS boasts of its own cryptocurrency platform, which is named after the platform, EOS cryptocurrency.

With this information, you now have a gist of what these two platforms are all about. It’s now time to get into what brought us here. We want to know the answer to the question that has rocked the minds of all Blockchain enthusiasts; Ethereum vs. EOS: who will win the number one spot as the best smart contract platform?

EOS vs. Ethereum

Design Philosophy

Ethereum

Ethereum is a neutral platform. It’s not packaged with other features, and this allows users to create the feature that they deem appropriate for their specific smart contracts. This helps to prevent instances where bloating can occur in an application.

EOS

EOS is equipped with features such as cryptography implementations and tools for app/Blockchain communication. It also has a variety of options such as self-describing database schemes and web toolkit that help with interface development.

Governance

Ethereum

Currently, Ethereum works on a Proof-of -Work consensus. It’s planning to move to the hybrid Proof-of-work/Proof-of-Stake. Ethereum makes it a necessity for their developers to follow the code and solve issues through forks.

EOS

EOS makes use of the Graphene Technology which uses the delegated dPos and TaPos (Proof-of-Stake consensus). If issues do arise, EOS will be equipped with a constitution that will establish a common jurisdiction, which will help resolve them.

Scalability

Ethereum

Though it can rise to about 50 to 100 transactions per second, Ethereum has only achieved approximately 25 transactions per second to date.

EOS

During stress testing, EOS has demonstrated the ability to achieve more than 10,000 to 100,000 transactions per second. This system makes use of parallelization to create room for scalability and also to allow millions of transactions to be executed per second.

Network Fees

Ethereum

In return for using up bandwidth, calculation, and storage, Ethereum charges fees regarding Ether (the currency of Ethereum). There’s a constant fluctuation of the required fees, and as such, the miners are given the option of choosing transactions depending on the size of the fees.

EOS

EOS will adopt the ownership mode which will allow EOS token holders to get a share in network bandwidth, processing power, and storage proportionately. The option to upgrade will be based on buying more EOS.

Once the user has purchased the EOS token in the initial phase, they will not be required to pay any transaction or network development fees.

Service Denial

Ethereum

Miners choose the transactions that have high fees for them to be added to the Blockchain. Further, due to the limited computing power and bandwidth, the chances of transactions that have low fees being blocked out are extremely high.

EOS

Ownership of the tokens allows users to own a proportional stake in network bandwidth, computing power, and storage. In EOS, even the smallest startups that have invested very little stake are guaranteed of reliable bandwidth and computing power.

With the above info, we can safely assume that once EOS has been fully adopted and becomes functional, it could very well put Ethereum out of business if Ethereum doesn’t introduce any measure that will make it less centered on profit and more on user satisfaction.

That’s for the future. However, if Ethereum would like to come ahead sooner, it needs to make changes to its architecture in a way that it will resemble or be better than that of EOS. As a matter of fact, the issue with DOS that occurred back in 2016 could have been averted completely if the developers of Ethereum had built it to be an operating system rather than a state machine.

While we are not exactly sure that EOS will replace Ethereum in the future, the differences between the two platforms could very well be the ticket that brings EOS to the number one spot as the best platform that deals with smart contracts.

Features of EOS That Make it Superior to Ethereum

No transaction fees paid by the end user

Although EOS users will have to invest some cryptocurrency to use this platform, they will not have to pay any other fees to carry out transactions. This is a factor that’s set to favor the B2C users who will no longer have to pay any fees to execute transactions on their decentralized applications.

Moreover, being that there will not be any entry fees, businesses that don’t have the technical knowledge can also start using smart contracts.

Scalability

EOS is aiming for a much higher number of transactions per second than what Ethereum is currently offering. While Ethereum is currently at 15 transactions per second, EOS boasts of 1,000–6,000 transactions per second.

To achieve this, EOS will use separate authentications and asynchronous communications from the execution itself.

A stake-based governance

Depending on the amount of cryptocurrency they hold, EOS crypto holders have the right to vote for a change of protocol.

Could all these differences be the sign that EOS is taking over from Ethereum? Is Ethereum finally passing the baton to a new player? Well, that remains to be seen.

It looks like it’s only a matter of time before EOS takes over. However, if Ethereum puts a bit of effort into their scalability issues that have become too obvious, as well as their image, it may have a fighting chance. Even though Ethereum is great, its scale is limited. It needs to change quite fast while there’s still time.

As of now, we will have to leave it to time to give us a clear winner of this highly contested race. The current state of both platforms says that EOS offers the scalability and speed that some decentralized applications will need while others will have to depend on Ethereum because of the censorship resistance and privacy that it offers.

Vitalik Buterin Says Ethereum’s Scalability Sucks

The creator of Ethereum has dished out some harsh critic towards the cryptocurrency.

“Scalability sucks.” The design of the Blockchain basically relies on the fact that all transactions in the entire network have to be processed by individual nodes.

PoW is not only very expensive, but it’s also extremely vulnerable to spawn camping attacks (51%). Recovering from such an attack could also be challenging since there’s no effective strategy of doing so. Censorship attacks rated at 51% are profitable while selfish mining is profitable beginning at a hash power of 25–33%

Privacy Sucks

It’s not easy to hold large amounts of cryptocurrency for regular users since the risk of loss or theft is real as they may lose their private keys.

There are many marginal technical inefficiencies.

It’s not easy for regular users to be aware that the contracts they are using actually do what they say they do, and also, don’t have malicious or accidental bugs.

It seems odd for the creator of Ethereum to say such words. The conversation is definitely interesting for those who have an interest in the world of digital currencies, even as Buterin continues to share more insights regarding the future of Ethereum. This is after recent congestion in Blockchain prevented users from participating in ICOs on the Ethereum platform.

“Very interesting” were the words he used when Buterin was describing scaling via the rootstock approach. He, however, said that the same result is possible with the Ethereum base design.

“It’s fortunate that Ethereum contracts can already do this, though there are not high enough incentives to do this; 5 is the number in this case. The issue will be resolved with either an increase in storage rent or in the creation of account/SSTORE.” This is according to Buterin.

Conclusion

We have come to the end of this EOS vs. Ethereum guide. We hope that you have found it to be not just enjoyable but especially knowledgeable.

If you have completed reading this guide, you should be aware of how these two platforms work, including their future plans.

You should also be aware of the difference between delegated proof of stake and proof of work, and also how the two algorithms differ from each other.

As we earlier stated, this debate is one that divides opinions. The race is also quite difficult to call because even though EOS could replace Ethereum as the number one Blockchain in the world, Ethereum has already taken the number two spot as a popular cryptocurrency.

Our opinion is that the battle lies in the technology. So, let’s give it a year and see how they both perform. Then, maybe we will have enough facts to decide.