Today I am sharing with you my opinion on why I think EOS currently is a far better investment than ETHEREUM.

The focus here is on investment, not on trading so we will be looking at the long-term price action.

Also, this is an opinion piece and does not constitute investment or financial advice.

Finally, feel free to criticize my opinion, after all that is why I am writing this post: to start a discussion.

I- The fundamentals.

We'll start with Ethereum (A) then we'll move on to EOS (B).

A- ETHEREUM.

Let's analyse the good (1) and the bad (2).

1- The good.

• Hype: Ethereum is going mainstream, it is being discussed on CNBC...

...and has captured a large community of talented developers and (not always talented) traders;

• Reliability: the Ethereum blockchain, albeit frequently congested because of ICOs, has proven to be reliable and to be able to handle transactions without errors;

• Very active and transparent development which you can follow on their Github’s page or on Vitalik Buterin's own blog.

• The Entreprise Ethereum Alliance (EEA) which:

"[...] connects Fortune 500 enterprises, startups, academics, and technology vendors with Ethereum subject matter experts. Together, we will learn from and build upon the only smart contract supporting blockchain currently running in real-world production – Ethereum – to define enterprise-grade software capable of handling the most complex, highly demanding applications at the speed of business."

However, I must stress that the companies which are members of EEA are interested in Ethereum the technology, not Ether the token: EEA companies are not obliged to hold ETH to remain in the Alliance. These companies are looking at the blockchain technology behind Ethereum to build their own project, so don't expect JP Morgan to start buying billions of ETH tomorrow, this is not going to happen.

2-The bad.

• Scalability: it is still unknown if the Ethereum network can scale fast enough to rise to the challenge of mass adoption.
  The following is a quote from a recent article written by Fred Ehrsam (Previously co-founder @Coinbase) on his Medium page.

"At the moment, Ethereum can handle about 13 transactions per second, which cuts in half to about 7 transactions per second for tokens (4.7m gas limit, 21k avg gas price for standard txn = ~220 standard txns every block, current avg block time 17s = 13 txns/sec, gas requirement roughly doubles for token transactions). And this doesn’t include more expensive smart contract execution.
By this estimate we’re roughly 250x off being able to run a 10m user app and 25,000x off being able to run Facebook on chain. And since these systems are open rather than proprietary, we’ll see applications bigger than Facebook. This estimate isn’t perfect because the dApp stack functions differently in places than the current Web 2.0 stack. But I believe it’s in the right ballpark. This is why I believe scalability will be the primary bottleneck for the industry for the foreseeable future."

I recommend you read the full article if you desire to know more about Ethereum's scalability issues.

• The ETH token currently has few use cases besides being a vehicle for funding ICOs and, as we've seen in the last few days, ICOs are heavily under attack in China and other countries like the USA will probably follow suit very soon. For more on how the ICO ban situation develops in China I recommend you check out the Boxmining channel on Youtube:

• Finally, the Ethereum network is not user-friendly, it is still very much a complex system to use right now although dapps like Status are currently being developed to streamline its usage and facilitate its adoption.

B- EOS.

Similarly we'll start with the good (1) then approach the bad (2).

1-The good.

Who's better than Dan Larimer himself to talk about the vision behind EOS. This recent interview is from the Epicenter channel on YouTube.

The highlights of the interview:

• Dan Larimer has already developed two successful block-chain projects: Steemit & BitShares;
• EOS will be infinitely more scalable and user friendly than ETH;
• The supply of EOS does not have inflation. (EOS does have inflation which rate will be determined by those holding and voting on the network, this rate cannot exceed 5% of the total supply yearly though; thanks @malexanders for pointing this out);
• Unlike Ethereum where dapps require micro-payments to function, there are no transaction fees on the EOS network.

Seriously I recommend you go watch the whole interview and forge your own opinion.

2-The bad.

• No finalized product yet, so far EOS is just a bunch of promises in a whitepaper although you can follow the development of the project on its Github page here.

• Its controversial ICO model has raised fears in the community about the true intentions of BlockOne, the company behind the development of EOS although I would argue that this model of ICO actually allows an efficient distribution of the EOS tokens. Besides, Vitalik Buterin himself recognized in a blog post that ICO models such as the one used by EOS are an improvement over brutal, single-round ICOs.

"In a single-round sale, the developers have only one chance to get money to build the project, and that is near the start of the development process. There is no feedback mechanism where teams are first given a small amount of money to prove themselves, and then given access to more and more capital over time as they prove themselves to be reliable and successful. During the sale, there is comparatively little information to filter between good development teams and bad ones, and once the sale is completed, the incentive to developers to keep working is relatively low compared to traditional companies. The “greed” isn’t about getting lots of money, it’s about getting lots of money without working hard to show you’re capable of spending it wisely."

EOS’ ICO model actually allows investors to incrementally augment their investment in EOS as the project development progresses which is a great advantage over single-round ICOs.

II- The Technical.

I this part, I am going to use simple charts to show you why, from a technical point of view, EOS is currently a much superior investment than ETH.

• ETH’s complete trading history on Bitfinex’s USD/ETH market (the fiat/ETH markets currently are the market movers).

Clearly the chart tells us that most of the crazy profit has already been made and I would dare say, most shrewd investors have probably already exited the market and I expect more to exit as more countries will join in the ICO crackdown.

• EOS' complete trading history versus the USD on Bitfinex:

We are still very much in the pre-hype, cheap accumulation phase on EOS and that is exactly why I am buying the stuff with the mindset of an investor:

• Buy cheap when nobody cares about it;
• Put on a LEDGER and forget about the price;
• Dump when (if?) EOS becomes next year's rage.

This is what investors do guys, they research about a project they believe in (emphasis on believe) and buy into it when it's cheap and affordable, not after it has pumped thousands of %. I have a plan and I am going to stick to it, it might fail but as far as risk to rewards is concerned I have the odds on my side.

#cryptocurrency #bitcoin #ethereum #eos

Trade safe guys, and please follow, resteem and upvote if you like the content.

Dan @tradealert