A Simple Guide To What Is Tezos (XTZ)

There is one crypto project that stands out for its incredible innovation and consistency, even when all cryptocurrencies are crashing: Tezos .

And in general, the community expects Tezos to break through and XTZ to overtake Ripple and Ethereum .

What is Tezos?

Tezos is a smart contract and dapps platform built on a state-of- the-art proprietary blockchain. The network uses Tezies (XTZ) to incentivize bakers and manage their work.

It was launched in late 2017 and had one of the most successful ICOs, raising $232 million .

While there are already successful similar projects like Ethereum or EOS, Tezos wants to be the first self-modifying blockchain solution. In addition, the protocol can evolve over time and implement new innovations without risking difficulties.

The network uses a delegated proof of ownership mechanism. It prioritizes security through formal verification and mathematically proves the correctness of the smart contract code.

In addition, developers in the Tezos environment can offer protocol updates. Proposals are reviewed and voted on by token holders, and upon implementation, developers are actually rewarded for their contributions.

Arthur Breitman came up with a thesis. Together with his wife, Kathleen Breitman, Arthur believes that the future of cryptocurrencies should be based on unity and shared wealth, not on conflicts, divisions in the community and constant coin tossing.

In 2015, Breitmans tried to convince several banks to adopt Arthur's proposed technology, raising $10 million over two to three years. It didn't work out, but in 2016 it managed to organize an ICO and collect $612,000 from the top 10 bakers.

Arthur and Kathleen decided to host the Tezos ICO in Zug, Switzerland. And to fulfill the requirements of the Swiss civil code, they created the Tezos Foundation under the chairmanship of Johann Gevers.

So, in July 2017, Tezos managed to collect $232 million , but the continuation of the project and the issuance of tokens were delayed due to disagreements between Breitman and Governors.

The delay sparked a series of lawsuits that have landed Tezos in trouble with the U.S. Securities and Exchange Commission.

In 2018, the power struggle ended and Gevers was fired. When the project was about to restart, it was unexpectedly announced that customer information/money laundering measures would be implemented for investors. Tezos KYC has been well received by the community.

But, finally, the beta network started working at the end of the 2nd quarter . And although 2018 was quite bearish, Tezos kept its value fairly stable and continued to improve and grow. In addition, at the beginning of 2020, the price of bulls has tripled.

Tezos has revolutionized the change process

The essence of Tezos is change. The project is built in such a way that there is no need for a roadmap, as all information about what Tezos has in store can be found in the management process and the forum. However, each update for Tezos is released as an add-on with all its features and updates.

There have been nine changes so far. And you:

Athena is the first proposed protocol adopted by the Nomadic Labs development team in February 2019, which aims to increase the gas limit and reduce the roll size required for baking from 10,000 theses to 8,000 theses.

Babel - the second change was implemented in October 2019 and brought significant changes, such as a new version of the consensus algorithm (Emmy+), the addition of new Michelson features to support smart contract developers, a redesign of the account that provides a clearer distinction between TZ and between CT . Calculates and refines the quorum formula and proposes to increase the 5 percent quorum threshold.

Carthage. In March 2020, a proposal was put into action that includes a 30% increase in the per-unit gas limit per farm, increased accuracy of the formulas used for cooking and preparing incentives, and various minor improvements to Michelson.

Delphi is an auto-launched November 2020 protocol that includes improved Michelson translator performance, lower gas prices by changing gas models, a four-fold reduction in storage costs, and a number of other minor tweaks.

Edo – will go live in February 2021 and will bring two key features to smart contracts. Sapling and BLS12-381 will work together to ensure the privacy of smart contracts and tickets for their own on-chain permissions and asset issuance. Edo was modified through the Tezos conversion process, reducing the period length to 5 cycles and adding a 5th adoption phase.

Florence – May 2021 changes help streamline smart contract gas and improve smart contract interoperability by moving inter-contract calls to deep ordering instead of wide ordering and eliminating test chain activation.

Pomegranate - Implemented in August 2021, which helps minimize gasoline costs, reduces Tezos block duration from 60 seconds to 30 seconds, and introduces liquidity preparation using a portion of all XTZ block rewards to create liquidity for d5- powered Tesla logs.

Hangzhou - Coming in 2021 and providing security against transaction errors, better smart contract interoperability, better block storage, lower gas costs and increased bank liquidity.

Ithaca – The last change that forced XTZ owners to choose a name was implemented in April 2022. Ithaca includes important improvements such as B. updating the Tezos consensus algorithm to enable faster settlement on the Tesla blockchain. This means that Tezos transactions are confirmed almost instantly, rather than waiting for x blocks before they are deemed irreversible.

Tender Bake is a new consensus engine introduced by Ithaca that will accelerate deposits and withdrawals on the XTZ exchange. Ithaca will also abandon Tezos' role-playing paradigm, which is currently used for both staking and governance, in favor of conventional proportional staking, where one token equals one quorum of votes.

In addition, the minimum XTZ that a baker must place in the oven is reduced from 8,000 to 6,000, and delegates must cover at least 10% of the XTZ allocated during the same 14-day period as the baker.

Can it be used? Bouncing Tezos

As noted above, Tezos has a network delegated proof-of-concept (DPOS) consensus mechanism . This means people can use their Tezies to win more chips.

The Tezos stake is called " cooking " as a metaphor for the creation of new blocks.

It takes one baker and 32 approvers to create a new block. The baker is the person who is actually chosen to create the block, the person who will receive 16 XTZ for completing the task. On the other hand, the validator is the account chosen to verify the correctness of the block brewing, and each baker receives 2 XTZ for completing the task.

Whether you want to roast or test, you need to create a Roast node . To create a Tezos backnode, you need at least one role consisting of a minimum stake of 8000 XTZ .

The more XTZ bakers invest, the more likely new blocks will be created and approved.

If you don't want to hang around or don't have enough Tezzies, you can also delegate your XTZ to Baker.

Most Tezos wallets support delegation. So to start with more Tezzies, just transfer your funds to your wallet and give them to the bakers. A list of delegates can be found at mytezosbaker.com.

The first thing you need to know about delegates is that most delegates charge a fee. Also, efficiency varies from baker to baker, and annual profitability is around 5-7%.

" Give my money to strangers so they can argue?" It's too risky... It won't happen . or so you might think. The good thing about Tezos DPOS is that the delegates are not jailed, so bakers cannot use or steal the delegated XTZ and you can safely withdraw your funds. The downside is that the delegate controls the win, and if he cheats, he can still steal the win.

That's why it's important to do some research before deciding on a baker. A list of blacklisted bakers can also be found on MyTezosBaker.

You can also delegate directly through some of the trusted exchanges (Coinbase, KuCoin or Binance).

Tezos Dapps and Smart Contracts

Tezos is basically a platform for dapps and smart contracts that can be compared to Ethereum in many ways. It is designed to host assets and applications supported by a global community of validators , researchers and content creators .

Tezos answers the demand for a suitable blockchain platform for security tokens based on real assets such as real estate, stocks or bonds. This automation aims to improve cross-border settlements by reducing counterparty risk and liquidating assets in real time.

Some of the more successful STOs hosted on Tezos include tZero, Alliance Investments, Elevated Returns, and Securitize.

Smart contracts in Tezos can be written in six native smart contract languages: Michelson , SmartPy , LIGO , Morley Framework , Archetypes , and Formal Verification .

Michelson is based on a stack with primitive and high-level data types and strict static type checking. It allows users to verify the properties of a smart contract through a formal verification process.

SmartPy is a complete toolkit for building smart contracts on the Tezos blockchain. SmartPy is a domain-oriented language (DSL) embedded in Python that allows users to design and run test cases to validate their smart contracts. Python is used in this example to create programs using SmartML, an imperative language.

LIGO is a simple smart contract language designed to create more complex contracts than those written by Michelson. It was originally a Marigold development language based on a pseudo-Meta-Michelson framework called Meta-Michelson. However, due to the attention of the Tezos community, LIGO is now a standalone language developed to directly support Tezos. As it is implemented for the Tezos blockchain, LIGO is coming to Michelson.

The Morley Framework is a set of initiatives that support and complement each other, including Morley, Lorenz, Indigo and Cleveland.

Morley is a Haskell-based metaprogramming framework for Michelson smart contracts. In Haskell, Lorentz is an embedded domain-oriented language (eDSL) based on the Michelson compatible stack. Indigo is a high-level eDSL language used to create Michelson contracts. Like Lorenz, it uses the Haskell type system for safety, clarity, and reusability. Cleveland is a Haskell package used to test the Michelson contract. Among other things, Cleveland makes it easy to load a contract from disk, run it, transfer XTZ, check your storage/balance, invoke an access point, and check for a specific error.

The archetypal fifth language is the Tezos DSL (Domain-Specific Language), which encourages formal verification and transforms contracts into SmartPy and LIGO.

And formal verification is described as the act of using a formal definition to ensure that a program meets certain requirements. On the other hand, developers now create unit tests to confirm that software meets certain specifications. However, unit testing techniques may not be able to capture all possible inputs (or edge cases), leading to software bugs. The answer to this difficulty is a formal verification, which involves creating a mathematical definition of the program.

Tezos vs Ethereum

When it comes to smart contracts and dapps, Ethereum is the market leader . But the Dao incident and the loss of millions of dollars in transactions due to improper programming of ERC smart contracts inspired Arthur Breitman to move forward with Tezos.

Updating Ethereum also requires a hard fork, which puts a strain on the community when switching from an old version to a new one. Therefore, Breitman proposed a chain-driven platform through a self-modification mechanism.

In addition, ether mining becomes very difficult because the cost of energy consumption exceeds the potential benefit. Therefore, in recent years many have turned to Proof of Stake, which is largely monopolized by the large Ethereum pool. This is why Tezos' delegated proof-of-stake system is important.

Ethereum vs Tezos Comparison Chart

Ethereum, on the other hand, will release a major update in 2022, merging the Beacon Chain with the main Ethereum network. Among the many new features that will be released will be a merger with shardchain and a full transition to a Proof-of-Stake consensus mechanism.

Tezos vs. Ripple

But before Tezos challenges the Ethereum token, it will first take Ripple's XRP.

Ripple is an unusual case in the cryptocurrency community. The company aims to solve the problem of expensive and time-consuming cross-border payments, especially for the corporate sector.

XRP does not use a blockchain, instead it uses a distributed consensus ledger managed by a network of validation servers called gateways.

Side Note: The XRP Ledger Gateway is the entity that allows money and other forms of value to flow in and out of the XRP Ledger Network. The gateway can be a bank, money exchange company, exchange office or other financial institution.

Ripple vs Tezos Comparison Chart

Looking at the numbers, it is easy to conclude that Ripple has a fairly consistent payment solution that is far superior to Tezos. It remains to be seen what updates Tezos will bring to the payments industry.

Important points to remember

• Tezos is a smart contract and dapp platform. It uses a delegated bid verification mechanism and incentivizes its miners with Tezzies (XTZ).
• Tezos has no roadmap and each update is called a change. Nine fixes have been made so far, with more to come.
• Each change brings new features and updates, making Tezos even more innovative.
• In Tezos, miners are called bakers, and they can be chosen to create new blocks or to validate blocks that have been created.
• A minimum of one roll is required to bet, consisting of a minimum bet of 8000 XTZ. Those who don't want to untie the knot can transfer their XTZ to an existing baker.
• Tezos responds to the demand for a blockchain platform suitable for STOs based on assets such as real estate, stocks or bonds.
• Users can write smart contracts in the Tezos environment using Michelson, SmartPy, LIGO, Morley Framework, Archetypes, and Formal Verification.
• Tezos makes up for the shortcomings of the current version of Ethereum, but Merge has changed Ethereum's roadmap.
• As a payment solution, Ripple is in a better position compared to Tezos and it is hard to say whether XTZ will overtake XRP.

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