Delegated Proof Of Stake (DPOS)
EOS uses delegated proof of stake created by Daniel Larimer which is the only consensus algorithm capable of meeting the EOS performance requirements. Those who hold tokens in the blockchain adopting the EOS.io software may select block producers through a continuous approval voting system. Blocks are producing rounds of 21 at the start of each round 21 unique book producers are chosen the top 20 by Total approval are automatically chosen every round and the last producer is chosen proportional to their number of votes relative to the other producers. if a producer misses a block and has not produced any book within the last 24 hours they are removed from consideration until they notify the blockchain of their intention to stop producing again.This basically just ensures that the network operates extremely smoothly. In the event of a fork consensus will automatically switch the longest chain.
You can also create an account with a readable custom name and as opposed to sending EOS to a randomly generated address you can just send it to their name. There can be multiple accounts per private key and within this account creating system there is a hierarchy, owners being at the top can control everything about the accounts as authority over as long as the owner knows the private key for those accounts. This system also provides a way for users to restore control of their accounts if their keys are stolen.
EOS uses many interconnected block chains / threads to process all the transactions needed with each single thread being able to process thousands of transactions per second and together being able to process millions. Using this method EOS could always just add more thread if needed pretty much allowing it to scale to infinity. All of this with zero fees as block producers are awarded with new EOS tokens as opposed to fees in which the amount of EOS tokens rewarded is determined by governance.
How exactly does the EOS government system work?
Essentially block producers will propose a change to Constitution and they would then have to obtain at least 17 of 21 votes on that change, they would then have to maintain this approval rate for 30 consecutive days, after which all users will be required to sign transactions using the hash of the new constitution, block producers will then adopt changes into the source code to reflect the change in the Constitution and then propose it to the blockchain, block producers would then have to maintain a 17 out of 21 approval rate again for another 30 consecutive days just to show whether or not they like how the code has changed, changes to the code would then take effect seven days later giving all full nodes one week to upgrades and all nodes that do not upgrade to the new code will then be shut down automatically.
For developing EOS uses web assembly as a programming language in the virtual machine allowing for the building of high performance applications. C or C++ can also be decompiled into web assembly and so also usable. The Ethereum virtual machine which has been used for pretty much every single existing smart contract on Ethereum could also be adapted to work within the EOS.io blockchain. In essence EOS be an operating system for the blockchain allowing for the mass adoption of blockchain technology, which i think is just extraordinary.