What is Tezos? The self evolving blockchain!

What is Tezos? The self evolving blockchain!


The Tezos technology is so special that it stands out from a lot of other cryptocurrency projects in my view. The project has special features that are very interesting. That is why I chose Tezos as the second project, which I think might become a very big project. But there is also some controversy at the beginning of this project.

Yes this coin is a serious opponent of Ethereum. This is because the technology behind Tezos tries to avoid many problems that other coins like Ethereum still experience.

I was really wondering what is the next big project that will exceed 15 or even 30 billion in market capital in the next 10 years. Ok first of all this are my thoughts and no financial advise. Do your own home work. I’m going to make a serie about what coins can be the next big thing. And this is the second coin of the list that makes me think YEAH this can be such a coin!

So lets dive into the the world of Tezos! This post wil cover the following:

  • A short piece of Tezos history
  • So what exactly is Tezos?
  • Liquid proof of stake
  • What makes Tezos so unique?
  • What are the pros and cons of on-chain governance?
  • Where to buy the XTZ token?
  • What kind of wallets can you use?
  • Conclusion

A short piece of Tezos history

Tezos who provide a record-breaking ICO of $ 232 million at the time. This is certainly not the highest amount ever raised during an ICO. But it is certainly a record amount compared to the many ICOs that the crypto world knows. This project was initially delayed due to internal drama and problems at Tezos. In the end, Tezos was officially released in September 2018.

Arthur Breitman and Kathleen Breitman are co-founders who have developed together with a group of Tezos since 2014. This way you can see that tezos has been working on for a long time. The company is located in Switzerland.

Management problems arose after the ICO. These problems can be described as follows: The Tezos founding company DLS (Dynamic Ledger Solutions) and the company that raised the money during the ICO are called the Tezos foundation. Arthur and Kathleen Breitman got into an argument with the person who managed the money from the Tezos foundation. This was because this person named Johann Gevers did not want to distribute the funds to Arthur and Kathleen Breitman. At the time, this led to a wave of chaos within the Tezos community. The exchange rate of the XTC token fell sharply.

This has allowed both parties to separate after much media attention and drama. Johann Gevers then resigned and received an compensation of $ 400,000. Fortunately, this is in the past and the project is now going well.

So what exactly is Tezos ?

The website says the following things about what Tezos and the Tezos token (XTZ) are: 

Tezos is an open-source platform for assets and applications that can evolve by upgrading itself. Stakeholders govern upgrades to the core protocol, including upgrades to the amendment process itself.

 

Tezos is a blockchain-based cryptocurrency and a smart contracts platform for building decentralized applications (dApps)

 

XTZ, tez, or ꜩ (\ua729, "Latin small letter tz") is the native currency of Tezos. XTZ is programmable money created by smart contract on the Tezos blockchain.

 

In other words, Tezos is a blockchain network that interacts with a digital token called tez or tezzie. Tezos cannot be mined but is maintained by the token holders. Token holders receive a reward for this because they stake their tokens. Tezos uses the proof-of-stake consensus mechanism. In my view, this is one of the best consensus mechanism within the crypto world. We will discuss this later.

Commonwealth is a group that is connected to each other. This so-called commonwealth is a group of token holders who have chosen to be linked by having the same goals. The goal of Tezos is to get everyone within this group to work together. They do this to improve the protocol.

Liquid proof of stake

Many people call Tezos consensus algorithm liquid proof of stake. To better understand this system, I will explain this in the sections below.

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Baking what is it actually?

The people who make blocks within the Tezos blockchain are called bakers. You certainly wonder why bakers make blocks? This is to make progress within the blockchain. Bakers who give their computing power to the network to validate transactions. In order to participate in the baking system you must have at least 8000 XTZ. This is also referred to as a role. In others, the more XTZ you have in your possession, the more likely you are to make blocks. These people (bakers) are rewarded with XTZ tokens. 

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Delegating

If you have less than 8000 XTZ in your possession, you can still participate in the so-called delegate system. You then delegate (lend) your XTZ to a baker who then uses it to be more likely to be selected to bake blocks.

you probably wonder what is meant by lending XTZ token to bakers? This basically means lending your tokens but not physically transferring them to these bakers. This ensures that bakers cannot misuse your tokens by issuing or using them for what they are not intended for.

The baker will usually share the income he earns from the tokens borrowed with the token lessor. These tokens were also known as delegated tokens.

Do you want to bake or delegate?

If you plan to bake yourself you will receive higher rewards. But to be able to bake, a certain technical knowledge is required to properly carry out this process. If you do not want to learn this technical knowledge, it is possible to delegate tokens. This avoids the bake process, but you can still earn a certain amount of token. The number of tokens you earn is less than when you bake. With less than 8000 XTZ, you can only delegate and not bake.

To choose a baker you can go to the following website to compare the baker: https://mytezosbaker.com/

Selecting a baker

There are a number of things to look out for when choosing a baker.

  • How much of the reward is withheld by the baker himself
  •   How many tokens can a baker accept from delegates. For this, many bakers have a forum or chat rooms in which they share this information with their delegates. So different information is shared on this forum or chat rooms. So keep this in mind.
  • It is also important to consider whether a particular bakery is safe. This means that you look at whether the bakery has lost tokens in the past, has double baked and is there a track record of this bakery?

What makes Tezos so unique?

Self upgrading

Tezos can upgrade and improve itself. We have previously discussed this inn the intro. So it seems that Tezos can upgrade itself without the need for a hard fork. This ensures that Tezos can adapt itself to different situations much faster, it reduces the number of splits within the network and it ensures that a group can be well coordinated for a long time. Tezos considers upgradeability to be of paramount importance. This gives developers building on Tezos' network a good guarantee that the protocol will continue to run well into the future.

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Liquid Proof-of-Stake

baking what we have already discussed is basically the same as mining Bitcoin. The people who bake ensure that the network is maintained with their computing power. This happens with Bitcoin through the proof of work algorithm. Tezos returns the choice to its participants by allowing not only the baking of Tezos but also the delegation of coins to bakers. This gives participants a choice without handing over control of their coins. This is described as the liquid proof of stake principle.

This consensus algorithm improves scalability and alignments within the protocol. Costs are said to increase with 51% attacks. Proof-of-stake improves scalability and stimulates the coordination of incentives. It also increases the cost of 51% attacks and avoids environmentally-wasting proof-of-work.

Smart contract 

Tezos has chosen the contract language Michelson for safety reasons. The Tezos website states the following:

No system can be universally or unconditionally secure. However, Tezos and its smart contract language, Michelson, were designed with security and formal verification in mind.

Formal verification allows developers to mathematically prove that code performs correctly, according to its formal specification or certain properties. This is well-suited to financial smart contracts representing significant real-world value (e.g. tokenized assets, loans, etc.), which require guarantees that funds will not be lost or frozen due to bugs in the code.

What are the pros and cons of on-chain governance?

The website provides the following sources that you can use to investigate what exactly the different positions are:

Where to buy the XTZ token?

You can buy Tezos on different exchanges. Here you will see a list of possible exchanges (This does not include all websites where you can buy XTZ):

just scroll down and press show all.

https://www.worldcoinindex.com/nl/munt/tezos

What kind of Wallets can you use?

You can use the following wallets: 

Software Wallets

Galleon Wallet for MacOS, Windows and Linux. https://galleon-wallet.tech/

AirGap Wallet for IOS, Android and Web https://airgap.it/

Kukai Wallet for Web. https://kukai.app/

Zengo Wallet for IOS and Android. https://zengo.com/

Hardware Wallets

Ledger Wallet Obsidian Systems. https://www.ledger.com/

Trezor. https://trezor.io/

Command line 

Tezos CLI. https://tezos.gitlab.io/api/cli-commands.html

Further more the Website of Tezos says the following about this Wallets:

These links for wallets are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by the Tezos Foundation of any of the products or services provided by those sites. The Tezos Foundation bears no responsibility for the accuracy, legality or content of the external sites or for that of subsequent links, or for the performance or lack thereof of any wallets provided by those sites. Contact the external site for answers to questions regarding its content.

Conclusion

We have seen that Tezos is a special project and that it is definitely worth following longer. Tezos distinguishes itself mainly because of its liquid proof of stake principle.

It is a project that has not been officially released for very long and is already in the top 10 on CoinMarketCap. It is a special achievement to see such a young project so high on CoinMarketCap. the technology and perseverance of this project certainly give it a chance to establish itself in the top 5 in the future.

No one knows for sure where this project will end. but I really think that this project certainly has a very high chance of success. This project is not aimed to replace Ethereum. But it will certainly be a good opponent.

 

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LiquidAttic

I’m a simple man and a simple crypto enthusiast.


LiquidAttic crypto blog
LiquidAttic crypto blog

My name is Marc and i’m from holland. I’m interested in crypto, blockchain, privacy, DEFI and cybersecurity. And i wanted to share my simple thoughts about the crypto space. I will write about: News, cryptocurrency, tokens and much more.

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