Tezos recognizes itself as a decentralized blockchain that develops a governing system through a digital commonwealth. We would define the commonwealth as a group that links itself together due to similar goals and objectives. Tezos operates under the same system and aims to provide a platform for the users to work together in improving the foundations of their protocol. What is Tezos, and how does it benefit the crypto world? It might seem an easy question, yet understanding the architecture of Tezos is a bit difficult. It is a decentralized blockchain with the native token XTZ that uses a native middleware called ‘Network Shell.’ Its basic function is to develop a system with a self-amending ledger. Usually, there are three primary portions of a generic blockchain protocol. Tezos has combined two portions of Transaction and Consensus protocols that define the accounting model and help blockchains reach a state of agreement during a transaction. The ‘Network Shell’ defined connects the network and the combination of the above two protocols.
Being the first self-evolving blockchain, this smart contract platform operates with a peer-to-peer, distributed, and permission-less network that ensures a promising future for cryptocurrency. Tezos has gained a lot of popularity after its recording-breaking $232 million ICO funding. It was essentially launched in 2018 as a blockchain network that was linked to a digital token named Tez. It is a rewarding system instead of mining tez where users receive awards over their participation in the consensus mechanism of Tezos.
Tezos has been more focused on developing a robust blockchain system by keeping the conventional hard fork issues in mind. What hard fork actually is? Many existing blockchains use the fork concept, better known as branching while updating the system due to bugs or other system problems. Branches that do not guarantee compatibility to the system before and after the update are referred to as ‘hard forks.’ This might lead to a few nodes operating under the older version, which would eventually lead to the creation of two separate chains. Users might get the concept of hard fork better with the example of the division of Ethereum Classic during the DAO incident of 2016.
Many existing blockchains do not provide their users with financial incentives for correcting the bugs in the system. The chains resulting from the hard fork adopt a similar system, which can cause further issues. What is Tezos, and what new does it offer in the blockchain market? Tezos has been developed with system modification independent from a fork. The three protocols integrated into the system maintain the compatibility among the older and newer versions of the blockchain. Tezos aimed at developing a self-governed blockchain network, which is to be promoted through monetary incentives provided to users who put their part in the centralization of the system governance. People at Tezos shall earn rewards over discovering the bug, fixing, or submitting the improvement. This is how Tezos aims to develop a strong and connected community for improving the experiences in crypto space.
People who associate themselves as stakeholders in the platform participate in the platform’s governance and vote on the procedural proposed updates. A single stakeholder’s vote can move the system towards a protocol change, which shows the intensified interconnection of the users in the system. Is Tezos a good investment? Several features make Tezos unique and usable.
The system has excluded the function of forks as in the existing blockchains. The self-amending feature that has been presented by Tezos helps in the up-gradation of blockchains without splitting them in two.
Tezos has integrated the feature of formal verification into their system for allowing developers to mathematically prove the correctness of the code in the Smart Contracts with the help of a functional programming language called Michelson.
One of the most major differences observed in Tezos and the other emerging platforms in the blockchain space is the difference in their consensus method. Tezos uses the Liquid PoS, unlike the other system that utilizes the DPoS. This method requires stakeholders to stake a certain number of Tezos coins for participating in the system. The Liquid PoS ensures minimal dilution of small token holders and develops decentralization, accountability, and governance in the design system.
Staking, which is similar to earning interest in a bank, is a process that holds funds in a crypto wallet that supports the operation of the network for which the users are rewarded in the future. What does Tezos do in staking? It allows delegating their validation rights to validators without the transfer of the ownership of the tokens. XTZ that are being delegated is completely liquid with no risks except earning potential rewards from these tokens. By comparing other blockchain platforms that use the DPoS mechanism for staking, users have to delegate complete accounts in order to earn rewards with great risks of theft and fraud.
Considering the hiccups that this network has faced in the past three to four years, it still developed into a very commendable platform with a promising future. Its ICO was one of the most successful in the history of cryptocurrency. It landed the foundations of an intuitive blockchain network that focuses on improving the blockchain technology as a whole.
Tezos Foundation, the developers of Tezos, has announced research grants that would consist of partnering with various institutions for focusing on education and research, which would eventually benefit the cryptocurrency in its mass adoption in the future.
The increasing prices of tez have been gathering the interests of many users. This might be a short-term development for Tezos, yet it will turn out to better suit the crypto world with its technological innovations. With such a promising platform, Tezos can evolve into becoming a very popular blockchain network. It shall be the perfect time for most users to participate in its evolution.
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