The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication, and the scheduling of applications across many of CPU cores or clusters. The resulting technology is a blockchain architecture that may ultimately scale to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment and maintenance of decentralized applications, in the context of a governed blockchain.
- Horizontal scalability means scaling up by adding more systems and computers to the resource pool while vertical scalability scaling up is done by adding more processing power.
- Asynchronous communication is not synchronized i.e. the parties involved need not be present in the same time to have a communication.
EOS scalability means that it supports thousands of commercial scale DApps and inter-blockchain communication as well as separates authentication from execution thus it can support millions of users. For comparison Visa manages 1667 transactions per second while Bitcoin just 3-4 and Ethereum 20 transactions per second, because blockchain-based applications every node of the network has to come to a consensus. EOS uses Delegated Proof of Stake so they can easily compute millions of transactions per second.
In a Proof-of-work system that Ethereum uses the miners solve cryptographic puzzles to “mine” a block and add it to the blockchain, but this process requires a lot of computational power. Verifying whether the block belongs to the chain is simple. Proof of stake, on the other hand, make the entire mining process virtual and replace miners with validators. These validators in are selected by anyone who holds tokens on a blockchain integrated in the EOS software through voting system. Anyone can participate in the block producer election and they will be given an opportunity to produce blocks proportional to the total votes they receive relative to all other producers.
Any blockchain based on the EOS software will have to generate a 5% natural inflation per year. This will be distributed to the platform’s block producers in connection with their confirmation of transactions on the platform and to the top three smart contracts or proposals that receive the most amount of votes from holders of such tokens.
The reason why this happens is to make sure that a blockchain is not reliant on any one single one foundation, organization, or individual for its growth, development or maintenance.