History of EOS
EOS is a cryptocurrency that has been at the top of market cap lists for several years. As a result, it is a well-known project within the blockchain community.
However, few users know the history of EOS and you may be interested in learning a little more about the subject. You’re in luck, as that’s exactly what we’re going to look at in the rest of this article.
The genesis of the project
Block.one, the company behind the project, is rooted in the observation that blockchains such as Ethereum and Bitcoin cannot allow companies to deploy decentralised applications (DApps) industrially, because of the technical limitations of their respective blockchains.
Not only is the number of transactions per second extremely low, but it also takes too long for a block to be validated, two factors that must be completed quickly in some situations to move to the next stage of a decision-making process – as is often the case with DApps.
The idea was to create a digital asset that would allow several million transactions per second to be completed, while allowing for minimal fees thanks to a clever system that grants a percentage of the network’s computing power based on the percentage of EOS held (I.E. 2% of the EOS tokens are entitled to 2% of the total computing power). In addition, the blocks have an average frequency of 500 ms, which solves a lot of problems surrounding the speed of validation.
Arrival on the market and its beginnings
The EOS white paper was published in 2017 and the project came onto the market through an ICO, which ran from June 2017 until the release of EOS in June 2018. In total, the company raised more than $4 billion, which is a colossal sum and a world record at the time of writing (March 2021).
However, EOS tokens were already tradable on exchanges as of 3rd July 2017 at a price of $4.33. The first time the unit price of an EOS exceeded $10 was on 20th December 2017 and the all-time high was reached on 29th April 2018 at $22.89, at a time when the entire cryptocurrency market was in the midst oif a severe correction following the bull run at the end of 2017. EOS was at that time the best performing cryptocurrency by price.
Initially appearing as an ERC-20 token (I.E. using the Ethereum blockchain), EOS tokens were eventually converted to another format to evolve on its own blockchain. To do this, users were required to register their held tokens before the release of the mainnet, which was originally scheduled for 2nd June 2018. If this action was not taken, the EOS tokens were permanently lost. Some exchange sites, such as Binance, did this automatically for their users, which saved a lot of distracted investors from losing their digital assets.
Trouble with the U.S. SEC
The SEC (Securities and Exchange Commission), the U.S. securities watchdog, found that EOS broke the law that applied to fundraising by not properly registering its ICO in the USA.
As a result, on 1st October 2019, the SEC fined Block.One $24 million. This sum, compared to the $4 billion earned from the ICO, represents a fine of about 0.6%, and many commentators claim that it is certainly not a punishment that will deter other actors in the future. What’s more, the ruling had no negative impact on EOS prices at that time.
The current situation
On paper, EOS is undeniably an excellent project, and at one time, it managed to climb into the top three highest cap digital assets. Nonetheless, its popularity continues to decline over time.
For many, this is partly due to the fact that the company managed to raise far too much money in relation to the state of development. The tokens were massively overvalued compared to what the project was capable of doing, and speculation was rampant.
Since April 2019, we have seen that the satoshi value of EOS, that is to say its value in relation to Bitcoin, is falling continuously and almost linearly, reaching almost an all-time low at the time of writing this article, which is a sign of a disinterest of the project among many investors.
You are now much more aware of the history of EOS. As you have seen, just because the project had an ICO that raised the most money of all time does not mean that it was set to become the most capitalised cryptocurrency.
EOS is a promising project, but it is still failing to deliver on the promises it made to investors. This may, therefore, partly explain its loss in value over time.
However, many events can occur without necessarily being explainable in the world of cryptocurrencies. It is therefore quite possible that EOS will regain its footing in the future and that a new craze will drive its price soaring higher. However, we have to wait and wait and see what happens because only history will be able to tell us.
To learn more about the project, we invite you to take a look at our various guides on EOS (insert link). This will allow you to make a much more informed decision on whether you want to invest in this project or not.
Président et Cofondateur de MinedHack et fervent défenseur de la Blockchain depuis 2017, je suis conscient que sans explications et vision de l’industrie son adoption n’aura jamais lieu. J’ose espérer en tant que Reporter et Rédacteur de CoinTribune aider à cette mission.