EOS is one of the smart contract blockchains that is sometimes called a potential Ehereum killer. Its goals are to reach beyond the limits of Ethereum. It’s logical to assume that its movements would follow Ether closely, but the reality is always more complicated.
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All about EOS
EOS started with the longest-lasting ICO in the history of cryptocurrencies. It lasted a year and raised about $4 billion. An idea of a safer and quicker decentralized blockchain with smart contracts and transactions free of fees appealed to many. Smart contracts allow developers to release dApps, that are already high in demand. But the sky is the limit, and EOS has set a goal to build an easy-to-use OS-like platform.
Both Ethereum and EOS can host dApps, but EOS’s network can process a lot more at any given time. EOS is aiming to achieve millions of transactions per second. This would revolutionize smart contracts, as none of the existing ones can work as quickly. Ethereum can only handle 15 transactions per second, and that is nowhere near millions. And scalability is a crucial factor for blockchain’s potential.
Users pay a fee to rent Ethereum’s Virtual Machine, and it keeps getting more expensive as the number of users grows. A higher fee means small transactions become unprofitable. In the meantime, EOS coin holders have ownership of the network instead of paying for computing power. That is why the transactions are free.
You can convert eos to btc, send it between your wallets or receive it as any other coin. It is a great tool for quick and free worldwide transactions.
The rise and fall
After its very successful ICO, the EOS price went from $2.29 to $5.40 within 24 hours. Sadly the coin soon started falling, breaking one support level after another. EOS found its bottom at $0.59, which is where it remained until late October 2017. Once the market growth of 2017 has reached its peak, EOS joined the run and hit $16.39 on January 13, 2018. That is the time when most coins (ETH and BTC included) peaked, but EOS continued growing until April 2018. In mid-April, the crypto market – which had been crashing since January – started seeing a new bullish wave. Prices started going up, and many assumed that the so-called ‘crypto winter’ was over. For a few weeks in April, the EOS’s price jumped once more, breaking its former record and going up to $22.89. Alas, the crash continued in May 2018, and EOS has never reached these highs again, at least so far.
Following this second surge, EOS’s kept dropping, briefly stopped by support here and there, but eventually, it dropped to its new bottom at $1.86 around December 7, 2018. In 2019, the coin saw gradual growth, although it progressed slowly, and everything it had achieved by mid-2019 was undone in the second half of the year, as it slowly returned to the level where it sat ever since – between $2 and $2.8, moving above this range only three short periods in 2020.
What were the reasons, and did it all correlate with the ETH and BTC?
EOS and ETH
On 28th May 2018, Ethereum was trading above $570. A noticeable sell-off on Bitfinex has shot down ETH by 8,49%, and it was at $515 within 24 hours. Eventually, analysts tied it to the EOS team. Binance’s had recently added the EOS/Tether pairs. The trade took place at Bitfinex – one of the largest crypto exchanges, and within an hour, about 180K ETH was exchanged.
There were suspicions that it was a team or a person who caused the crash, which is most likely to be EOS’s. Only four days before, the EOS’s team has spent about 1 million USD on buying Ethereum.
EOS and BTC
EOS is using the Delegated-Proof-of-Stake, and Bitcoin is using the Proof-of-Work (PoW) consensus model. PoW is making Bitcoin slower, more expensive, and rather bad for the environment, yet it keeps leading the way for the market.
When EOS was launched in 2017, it demonstrated a positive correlation with Bitcoin prices. But most of the top 15 cryptocurrencies showed a strong correlation with Bitcoin during the 2018 crash (>0.70), while EOS showed strong resistance to the trend until it started its fall in April. EOS peak was uncorrelated with Bitcoin prices, as the ICO date came closer to the end and the EOS’s mainnet prepared for launch.
EOS has developed a character of its own, keeping growth when the market is falling and falling when the established coins are growing. At the beginning of 2021, EOS’s is not at it’s best, while BTC and ETH are setting their new records. Yet the market cap over 5bn shows that many are still willing to invest.