EOS RAM, CPU, NET, Staking and unstaking explained

 

Whether you are new to the cryptocurrency world or you know of the greats, Bitcoin & Ether, there is one that is making great traction in all areas of the crypto-sphere. Being new, innovative, third generation blockchain it is proving itself in all facets.  You guessed it, EOS.

 

 

EOS is a DPOS (Delegated Proof of Stake) blockchain striving for decentralisation which incurs no fees of moving its native token EOS, across its network. EOS is mainly designed to handle large-scale dApps (decentralized autonomous applications) which are designed to enable horizontal & vertical scaling. It is as instant as it gets, transactions only taking quite literally seconds from deposit to withdrawal.

 

Today we cover the 3 EOS Resources in a basic rundown from CPU, NET & the more commonly known resource, RAM. As well as the concept behind the EOS token. All 3 resources can be temporarily consumed, none of them, however, can be deleted. As you stake your EOS tokens, you get a resource in return. Just remember you’re not selling them, you are staking them.

 

 

CPU -Processing Power

 

CPU bandwidth is used when transactions or actions are put into play. Just like a normal Processor on a computer, the longer you run a program the more CPU is required. As more transactions appear on the network the CPU bandwidth will be used more.

 

NET -Bandwidth

 

NET or Network Bandwidth is like CPU in this aspect. Your bandwidth is temporarily used each time a transaction or action is done on the network. If you stake more EOS tokens your able to use more bandwidth.

 

 

RAM – Storage

 

RAM is the resource that we use to store data on the EOS blockchain and we use our EOS tokens to purchase it. Just like the EOS token its price can fluctuate based on supply & demand. If the demand is high, RAM prices will increase and if the demand is low, prices for RAM would lower to some degree this is governed by the algorithm known as the Bancor Relay.  The price range for RAM is between 0-1 EOS Token.

Resources such as RAM recently have had a tsunami effect of returns as many people bought into RAM early and it then really became a speculative market. Returns of this had managed to spiral up to 4000%.  Block Producers can manage the available RAM and increase RAM when required. Most recently Block Producers have voted and passed a resolution to increase the RAM from 64BG to 128GB, an Increase of 1KB per block.  This has help to dramatically lower the RAM Costs.

 

EOS – Tokens

 

EOS tokens themselves are the building blocks that make the entire EOS network possible. EOS Tokens are the power behind being able to stake CPU & NET as well as buying and selling RAM. For instance if a developer would like to build upon the infrastructure of EOS, EOS tokens would be needed to complete to project.   They would need to be staked accordingly to the developer’s requirements of the resources available. An analogy being used in the EOS community is that EOS tokens are treated like real estate. The more EOS tokens you have the more land you can work and build on. As Block.one has 100,000,000 EOS tokens they technically own 10% of the “land” that the EOS main net is. Total supply of EOS tokens is 1,000,000,000.

 

 

Staking

 

Why do we stake? Well, it comes back to the DPoS (Delegated Proof of Stake). Without staking the user wouldn’t be able to be rewarded for what they have staked in. Or in helping ensure that by voting, Block Producers are doing what’s required.

 

Staking is where the power of EOS comes alive. Using your EOS tokens, you can then stake these for CPU & NET which is used during Voting. Staking in anyway is a positive outcome for the account holder & the EOS community. Adjustments have been made that as the EOS community grows. There will be more changes to staking of the resources in future.

 

You can stake your EOS without having to pay transaction fees. And you can then un-stake to then receive them back. Keeping 1 EOS staked for CPU & NET will allow you to do many transactions per minute. But if you’re looking to do trades with an exchange or move a lot of tokens around which will mean a lot more transactions, you’ll need more EOS staked. With staking it also acts as the best defence for the security of your tokens. If someone managed to get your keys and wanted to transfer the tokens out, this would be hampered by the un-staking rule of 3 days. The perpetrator would need to initiate an un-stake action on your account and this would take 3 days or 72 hours to clear. Enough time for you to counter the action and save your EOS. Keeping 1 EOS staked CPU & Bandwidth will allow you to do many transactions per minute.

 

As staking requires good tools such as our EOSToolKit.io created by the team from GenerEOS Australia. If you are interested to get started and wish to be able to understand the steps we suggest going to the link below and following it through.

For more information as well as tutorials you may check out this article here

 

Related article – What is EOS?

 

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