2019 is seen as a revival year for the cryptocurrency market. And if the market ends the year with a bear, it will start with a bull.
Tezos is the crypto project that has garnered attention through its consistent creativity and remarkableness, even as all cryptocurrencies plummet.
And having considered everything, the community hopes Tezos will fight its own way so that XTZ can surpass Ripple and Ethereum.
What is Tezos?
Tezos is a smart contract and dapps platform built on top of the leading native blockchain. The network uses tezzies (XTZ) to incentivize bakers and run its operations.
It was released in late 2017 and had one of the most successful ICOs ever, raising $232 million.
Tezos aims to be the first self-modifying blockchain solution, although there have been similar successful projects like Ethereum or EOS. Additionally, Tezos’ protocol is capable of developing and implementing new improvements over time, without the risk of a hard fork.
The network uses a delegated proof-of-stake mechanism. It prioritizes security through formal verification and mathematically proves the code correctness of the smart contract.
In the Tezos environment, developers can even make protocol upgrade recommendations. Proposals are reviewed and voted on by token holders. And if the proposal goes through, the developer will be rewarded for his contribution.
The idea for Tezos came from Arthur Breitman, along with his wife Kathleen Breitman. Arthur believes that the future of cryptocurrency should be based on unity and commonwealth, rather than disputes, community splits and coin issuance.
In 2015, Breitmans tried to convince some banks to adopt Arthur’s proposed technology and raise $10 million in two or three years, but it didn’t work. But in 2016 they managed to conduct an ICO and received $612,000 from 10 bakers.
Arthur and Kathleen decided to hold the Tezos ICO in Zug, Switzerland. And in response to the requirements of the Swiss Civil Code, they established the Tezos Foundation, with Johan Gevers as president.
So, in July 2017, Tezos raised $232 million, but the continuation of the project and token release was delayed due to disagreements between Breitmans and Gevers.
The delay has been followed by a series of lawsuits that put Tezos in legislative trouble with the US Securities and Exchange Commission.
In 2018, the internal struggles were resolved and Gevers was fired. When the project returned to normal, it suddenly announced the implementation of Know Your Customer / Anti-Money Laundering checks for the contributors. Tezos KYC has been met with a negative response from the community.
But in the end, the beta network was launched at the end of Q2. And even in the bearish state of 2018, Tezos kept its value quite stable and continued to improve and grow. More than that, during the bull run from the beginning of 2020, tezzie tripled its value.
Is Tezos Minable?
As mentioned above, Tezos has a delegated proof-of-stake (DPOS) consensus mechanism. This means people can stake their tezzies to earn more tokens.
In Tezos, staking is called “baking” as a metaphor for creating new blocks.
Generating a new block requires a baker and 32 endorsers. Baker is the one chosen to create the block, and the one who will receive a reward of 16 XTZ for completing the task. On the other hand, the validators are the accounts chosen to verify if the block has been properly baked and to complete the task, for each baker will receive 2 XTZ.
Whether you want to “bake” or authenticate, you need to set up a baking node. To set up a baking Tezos node, you will need at least a minimum stake listing of 8,000 XTZ.
The more XTZ a baker stakes, the more opportunities he has to create and validate new blocks.
If you don’t want to set up a node or don’t own enough tezzies, you can also delegate your XTZ to a baker.
Most Tezos wallets support delegation, so to start earning more tezzies you just need to transfer your coins in the wallet and delegate it to a baker. You can find a list of authorized persons on mytezosbaker.com.
The first thing you need to know about trusts is that most principals ask for a fee. Also, the efficiency will vary from baker to baker and the annual return is around 5-7%.
“Give my money to some stranger for him to bet? It’s too risky, it can’t be!” Can you think so? The good thing about Tezos DPOS is that the authorization is non-custodial, so the baker cannot use or steal the XTZ you authorized and you can withdraw your funds safely. The downside is that the principal has control over the profits and if he is a scammer, he can take your profits.
That’s why it’s so important to look carefully before you choose a baker. Also, on MyTezosBaker, you can find a list of blacklisted bakers.
Furthermore, you can entrust it directly through some trusted exchanges (Coinbase, KuCoin or Binance).
Tezos dapps and smart contracts
Tezos is a platform for dapps and smart contracts, which can be compared in some respects to Ethereum. It is for storing assets and applications backed by a global community of validators, researchers, and builders.
Tezos fills the need for a blockchain platform that matches security tokens based on real-world assets such as real estate, equity, or bonds. Through automation, it is said to deliver improved cross-border payments with reduced counterparty risks and real-time volatile assets.
Some of the most successful indicators implemented on Tezos are tZero, Alliance Investments, Elevated Returns, Securitize.
Smart contracts on Tezos can be written in two native smart contract languages: Michelson or LIGO.
Michelson is a stack-based programming language, with primitive data types and strict static type checking. It allows users to confirm the properties of a smart contract through a formal verification process.
LIGO is a simpler smart contract language developed to create more complex contracts than those written in Michelson. It was originally meant as a language for developing Marigold on top of a hacking framework called Meta-Michelson. However, due to the attention of the Tezos community, LIGO is now a standalone language being developed to directly support Tezos. Because it is deployed to the Tezos blockchain, LIGO compiles for Michelson.
Tezos vs Ethereum
When it comes to smart contracts and dapps, Ethereum is the market leader. But the Dao crash and millions of dollars lost in transactions because of faulty programming inside ERC smart contracts inspired Arthur Breitman to push with Tezos.
The Ethereum update also took a hard fork, which put a strain on the community by transitioning from the old version to the new version. Therefore, Breitman proposes a platform with on-chain governance through self-modifying mechanism.
In addition, ether mining becomes extremely difficult with the cost of energy consumption exceeding the possible profits. As a result, proof of work mining is mostly monopolized by large ethereum pools. That is why the authorized proof of stake of the baking system is necessary for Tezos.
|Market capitalization||$23,280,348,098 USD||$1,991,116,087 USD|
|Maximum bow||Unstable||711,541,827 XTZ|
|Target||Decentralized supercomputer for applications||Self-modifying smart contract platform|
|Consensus Mechanism||Mostly POW||DPOS|
|Transactions per second||15-20 tps||40-50 tps|
On the other hand, Ethereum is preparing to roll out a significant update in 2020 – Ethereum 2.0. And among many new features, Ethereum 2.0 will convert exclusively to POS and be able to process tens of thousands of transactions per second.
Tezos vs Ripple
But before challenging Ethereum’s token, Tezos must first surpass Ripple’s XRP.
Ripple is an anomaly in the crypto community. The company’s goal is to solve the long and costly problem of cross-border payments, especially for the corporate sector.
XRP does not use a blockchain but a distributed consensus ledger operated by a network of validating servers known as Gateways.
|Market capitalization||$8,830.655,263 USD||$1,991,116,087 USD|
|Maximum bow||100,000,000,000,000 XRP||711,541,827 XTZ|
|Target||Efficient payment options for financial institutions and liquidity providers||Self-modifying smart contract platform|
|Consensus Mechanism||XRP Ledger Consensus Protocol||DPOS|
|Transactions per second||1500 tps or more||40-50 tps|
Looking at the numbers, it can be easily deduced that Ripple holds a fairly consistent payment solution, far beyond what Tezos has. Not sure what Tezos updates will roll out in the payments area.
Tezos is a smart contract and dapps platform. It uses the DPOS mechanism and incentivizes its miners with tezzies (XTZ).
In Tezos, miners are called bakers, and they can be chosen to create new blocks or confirm blocks that are created.
Baking needs at least a minimum stake listing of 8000 XTZ. Those who do not want to open a node can delegate their XTZs to existing bakers.
Tezos came to fill the need for a blockchain platform suitable for STOs based on assets such as real estate, equity or bonds.
Users can write smart contracts in the Tezos environment using the Michelson and LIGO smart contract languages.
Tezos makes up for the shortcomings of the current version of Ethereum, but Ethereum 2.0 may be out of reach.
As a payment solution, Ripple holds a dominant position against Tezos, and it is hard to say XTZ will overtake XRP.
Dislaimer: This information is provided as a personal blog, not general information or investment advice. We are not responsible for your investment decisions.
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