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We all know that there is no transaction fee on EOS, while Ethereum does have one. Does this imply that running a dApp on EOS is cheaper than running it on Ethereum?

In other words, the user has to pay gas in case of Ethereum but anyway user has to spend some amount of network bandwidth/RAM/CPU usage in case of EOS.

If a user is paying in that way, then how is a transaction cheap or free? Because a user has to buy these resources in order to utilize them. I am a little confused here.

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Updated 4/2019

In addition to the points below. With vAccounts, account creation will become significantly less expensive.

Read more here:

https://medium.com/@liquidapps/all-aboard-the-eos-train-its-free-dbc00d9b21f https://cointelegraph.com/press-releases/liquidapps-introduces-vaccounts-free-access-to-blockchain-applications


Previous Answer

Your question is acceptable for the platform according to an early post.

There is a misconception that there are no transaction fees on EOS. I think the early adopters expressed this opinion without clarity a little too liberally, but that's okay because it's still arguably the best model out there.

Each transaction requires a certain amount of CPU, NET, and or RAM to accomplish as you said. All 3 of these resources are restricted in some way. The primary difference between ETH and EOS for the purposes of this conversation's scope is that the CPU/NET resources will replenish themselves and the RAM can be released and sold.

To the user, this is a more psychologically pleasing model than paying a per transaction fee. Dan wrote something where he linked to a study where evidence was provided to support this. If you're really interested, I might find it for you.

Dan has stated that account creation will be free shortly, so that is also a pretty large competitive advantage to ETH. We do not know how this will be spam limited; however, it's my personal opinion that you'll need a thumb print/face recognition for a free account.

I think of EOS like web hosting resources. You purchase a certain level of resources that you intend to not exceed for your application. If your application gets more demand, you upgrade your package, in EOS you would stake more EOS. Vice versa for less predicted demand. The difference in that example is that web hosting is billed continually as where EOS will fluctuate based on inflation as well as how saturated the network is.

Let us also not forget that ETH cannot scale which is a really big problem for them right now. I hope they can fix it.

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  • Yeah, scaling is the big issue which makes EOS much better option for web applications. But, when it comes to transacting, I don't think there is a much difference in terms of money. – Rajat Chaudhary Aug 31 '18 at 12:27
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In other words, the user has to pay gas in case of Ethereum but anyway user has to spend some amount of network bandwidth/RAM/CPU usage in case of EOS while transacting so in a way user is paying while transacting, then how a transaction is cheap or free? Because a user has to buy these resources in order to utilize them.

You don't pay for these resources in the same way you pay for gas. When you pay for gas, the ether you use to pay is no longer yours, while in EOSIO, the CPU/NET that was consumed in the transaction replenishes. The latter is a spam-prevention mechanism akin to using PoW to throttle spam.

In other words, in Ethereum, with X ether you can send a finite number of transactions, while in EOS with X EOS, you can send an infinite number transactions with a delay. I believe the distinction is meaningful.

I don't think there is a much difference in terms of money

I disagree. I can buy 100 EOS, stake them for CPU/NET, make several transactions, unstake my EOS, and sell my 100 EOS. Assuming fixed exchange rate, I have the same wealth as I started with minus off-chain transaction fees paid to exchanges if any.

This is not the case for blockchains where miners expect on-chain transactions fees.

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  • Cheers. Good points. I think this is a good addition to @Nat 's answer! – TeeAttack42 Sep 4 '18 at 15:14
  • n EOS with X EOS, you can send an infinite number transactions with a delay: You can not do infinite transactions as you would consume all of your CPU/bandwidth, in more to use you have to buy more EOS. SO, there is limit to push transactions in EOS. – Rajat Chaudhary Sep 6 '18 at 4:37
  • @RajatChaudhary no, your CPU/NET will be restored within 3 days, so there is no limit to the number of transactions with delay that you can make – confused00 Sep 6 '18 at 8:45

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