Qtum is known as a hybrid blockchain that is modeled off of Bitcoin (BTC) and Ethereum (ETH). Pronounced "Quantum", this blockchain has been competing in the crypto space among the many coins that offer solutions to problems that Bitcoin and Ethereum couldn't solve.
Bridging Two Chains
Begining in 2016, Qtum began development and held an Initial Coin Offering (ICO) in March of 2017. The mainnet launched on September 13, 2017, and has been looking to utilize Bitcoin's store of value and Ethereum's smart contracts. Founded by Patrick Dai, Nei Mahi, and Jordan Earls, Qtum also had a list of investors that also helped with the successful launch of this project. From the likes of Roger Ver (Founder of Bitcoin.com), Star Xu (Founder of OKCoin) and Anthony Di Iorio (Co-Founder of Ethereum).
Qtum is a combination of Bitcoin's core fork and an abstraction layer that supports multiple virtual machines such as Ethereum Virtual Machine (EVM). This is what allows Qtum to have smart contract features and build DApps and with the added bonus of using the Proof-of-Stake (PoS) consensus. In addition, there is also the use of Oracles and Data-feeds to help developers build around trusted sources of information for smart contracts.
- Interoperability between Bitcoin and Ethereum
- Able to scale along with BTC and ETH. Lightning Network and Raiden Network, Plasma, etc. can operate on Qtum
- Segwit Compatibility
- Ethereum Smart Contract compatibility. Ethereum smart contracts can run on Qtum and vice versa. Ethereum DApps can easily be ported to Qtum and developers can use the Solidity programming language to create smart contracts on Qtum.
Mentioned earlier was how Qtum also uses PoS consensus algorithm and while other blockchains have implemented this consensus, Qtum uses the 3rd generation of PoS that is built for Unspent Transaction Output (UTXO) blockchains such as Bitcoin but handles block data a little differently.
In a POW system, a random nonce is added to the hash of the block header and the resultant is hashed again. This hash, in turn, should be lesser than the overall network difficulty. Only then, is the block added to the main blockchain.
On the other hand, POSv3 has a kernel hash, which is composed of several pieces of data that are not readily modifiable in the current block. Here are some more features that must be kept in mind about Qtum’s POS system:
- The second transaction in every block is called a “coinstake transaction,” while the first transaction is an empty coinbase transaction.
- Each block must have at least one staking transaction.
- The block timestamp must have the bottom four bits set to 0 so the blocktime can only be represented in 16-second intervals.
- Only once every 500 blocks (about 18 hours) can a UTXO be used to produce a staking transaction.
Now let’s look into what a POSv3’s Kernel Hash is built from:
- The previous block’s stake modifier which is a hash of prevout transaction in PoS blocks and previous block’s stake modifier.
- The timestamp from the prevout transaction.
- The hash of the prevout transaction.
- The output number of the prevout (this is the output of the transaction is spent by the staking transaction).
- The current block time where the bottom four bits are set to 0. This particular feature changes during the staking process.
Read the Whitepaper for full details.
Qtum has seen some major growth and adoption over the past couple of years since its inception. Qtum has partnered with some major big names like Google back in May 2019 with the use of Google Cloud services to make it easier to launch nodes and release developer tools to contribute to the Qtum network.
“Google Cloud is the perfect partner to help us make the blockchain ecosystem simpler and more intuitive. Where launching a node was once an intensive and complex process, Qtum’s new developer suite introduces helpful shortcuts and tools to make it faster and easier. With a more accessible technology, we hope to open up and expand the Qtum community to include people with a broader range of experience — from experts to the everyday user.” — said Miguel Palencia, Qtum CIO.
A first-ever hard fork happened on October 17, 2019, that activated Qtum 2.0 with a major network upgrade that included proposals from their Qtum Improvement Proposals (QIPs) that included:
- QIP-5: Add signature verification to the output script of the contract transaction;
- QIP-6: Add btc_ecrecover precompiled contract to the Qtum EVM;
- QIP-7: Upgrade the Qtum EVM to the latest Ethereum EVM Constantinople;
- QIP-9: Modify the difficulty adjustment algorithm to make the block time more stable.
We have seen Qtum receive more adoption to the likes of Binance where they listed Qtum back in November 2019 and also more recently Binance futures launching a perpetual contract for Qtum.
Earlier this month, Founder Patrick Dai revealed the Phantom Privacy Protocol for smart contracts will be used on Qtum.
The proposed protocol provides two kinds of assets: transparent and confidential assets. The former is an ERC-20 token, while the latter has a design similar to Zcash. The confidential asset can also be regarded as a private representation of the ERC-20 token. Using this protocol, users can easily transfer their transparent and confidential assets.
On something recent as well and more notable, on January 27, 2020, the Qtum Chain Foundation donated 200,000 Yuan (about $30,00 USD at the time) to Hubei Charity Federation to help with the fight against the Coronavirus. The funds was reported to be used on epidemic supplies, insurance, provide family pensions for death due to COVID-19, living allowances for volunteers and protective gear.
Despite its high of around $70 per QTUM, the coin has faced the bearish markets but managed to stay within the top 50 coins by market cap at the time of this writing. Currently, at #39, Qtum like the rest of the blockchain projects are facing some uphill battles with the Coronavirus. While bringing an interesting take by merging the technology of what is essentially the 2 top coins in the cryptocurrency space, we will see what the future holds and if we will see development impacted by the current situation the world is in.
This is not investment advice. Do your own research.