About Tezos- The controversial Cryptocurrency you should know about
Tezos is considered as world's first self-evolving blockchain platform designed for Smart Contracts and Decentralized Applications (dApps). Quite similar to other crypto coins like- Ethereum, NEO, QTUM, Waves, etc. but has one major difference of being self-amending blockchain which keeps evolving as per needs emerges in the industry. In this model, the stakeholders have entire power to govern the protocol. Since, its establishment, this cryptocoin has established itself into the true digital commonwealth, where people involved can let their voices heard and shared.
When we talk about Commonwealth, it means a group that chooses to get linked together because of their shared goals and interests. It allows token holders to make decisions together govern the platform and improve over the time. In 2017, Tezos became the biggest ICO by raising $232 million worth Bitcoin and Ethereum. Since then, it became the most preferred cryptocurrency in the business. Presently, it is tradeable on three exchanges- Gate.io (which handles over 50 per cent of trading volume), HitBTC, and Gatecoin. On the daily basis, it has $2 million trading volume and is paired with BTC, ETH, and USDT. Tezos has risen from the ashes after the debate between Swiss Foundation and Project Leaders.
Ryan Jesperson, currently who is helming the foundation considers Tezos getting a new life after funding and scandal. In an interview, Jesperson said that the project has “more than after the fundraising in 2017,” which is “enough money for the future.
How does it work?
Tezos leverages on Network Shell, and to understand how this shell works, below is the breakdown into 3 layers-
- The Network Protocol
- The Transaction Protocol
- The Consensus Protocol
What is Network Protocol?
Commonly known as Gossip Protocol, it is the way how transactions are broadcasted across nodes. This also includes-
- Downloading the Blockchain
- Broadcasting Blocks to Networks
- Discovering Peers
It is defined by the Scripting Language which is used in developing Cryptocurrency. It contains codes which mines Bitcoin using digital signatures for verifying the transactions. Everything that falls under the making of the transaction is containing under Transaction Protocol.
The Consensus Protocol-
As the name suggests, it is the way to achieve consensus across all the nodes in the network. For example, in Bitcoin, there is Proof-of-Work used as consensus mechanism. But in Tezos, there is Proof-of-Stake which is also known as Delegated Proof-of-Stake. If there are any changes happening in Consensus Protocol, then it will be called Hard Forks resulting in splitting of original chain into two different chains.
How Network Shell works?
The Network Shell of Tezos Combines second and third protocol- Transaction and Consensus Protocol into Blockchain Protocol. Here, the blockchain protocol is a set of concurrent mutations to the global state of blockchain where blocks are defined as operators acting on the state of the chain. The Network Shell also acts as an interface between the network protocol and blockchain protocol. It is the responsibility of the network shell to maintain the best chain. Since Tezos is written in OCaml language, network shell is capable to recognize 3 objects-
One of the most important features of Tezos platform is its ability to implement protocols having capable of amending themselves. Some of the other features Tezos carry are-
Stakeholders govern the complete Tezos platform and they can participate in governing the protocol for its upgrades. The voting machine is pre-defined, but the governance process can change the voting machine as the network progresses. Moreover, there are many conditions that can trigger protocol change.
This feature helps in upgrading the blockchain without undergoing any hard fork and splitting the chain into two.
Smart Contracts & Formal Verification-
Tezos uses- Michelson- the functional programming language for smart contracts on the platform like DApps. The formal verification, on the other hand, allows developers to mathematically prove correctness. Also, the use of Formal Verification along with OCaml as a programming language is a great improvement in smart contract logic.
Proof of Stake Consensus & Baking-
The Proof of Stake implementation in Tezos is a combination of multiple concepts including lasher, Chain of Activity, and Proof of Burn. Tezos uses Baking- an act of signing and publishing blocks to the Tezos blockchain. Bakers are quite a crucial component of POS consensus mechanism that ensures all transactions done are correct. In Baking, block creation is done by stakeholders and obtain the right when Tezos took (Tezzie). It is not necessary for everyone to participate in the baking process. Users not interested in the baking process can delegate their tokens to other for the process.
It is important for bakers to act honestly which will help them to receive block. If you are interested in Baking, then you need to have 8GB of RAM and fast internet connection.
The Controversy and the Comeback-
Tezos is one such cryptocurrency that has witnessed major controversy which led its launch a bit delayed. The following issues resulted in a number of lawsuits which widely effected founders-Breitmans and other investors.
In the initial stage, Distributed Ledger Systems had complete control over the property rights over the Tezos source code. According to the ICO agreement, Breitman's would set up an official foundation to buy out DLS for the sake of the community. As per the agreement, Breitman's and Time Draper had to pick up sizeable 8.5% of the total fund raised from ICO and 10% of circulating Tezzies.
The next issue arose after Breitman's established the foundation. Since Swiss law demand independent parties to be on the board, the founders asked previous acquaintance- Johann Gevers to hold the president position. Later, issues erupted as Johann took control of major part of Tezos which Breitman's didn't expect to happen.
In the mid-June of 2017, the foundation announced Know Your Customer/Anti-Money Laundering. This caught investors into setback since this ICO was year old.
Well, this controversy really kept Tezo in the spotlight. In an interview at Money2020 in Las Vegas, Kathleen Breitman, co-founder of Tezos cryptocurrency said, “I mean, it stinks. It stinks. We’re both really embarrassed about the situation. But we trust the process that we put in place, and I think it will be resolved in due course.” She also insisted that there is no critical issue with the project.
Breitmans had previously accused Johann Gevers of self-dealing, while in turn, Gevers accused them of assassinating his character in public. This really made them the poster children in ICO controversy. In fact, Arthur Breitman, Kathleen's husband said, Gevers “is probably not a good fit for the project. I think he did some things which were bad, and honestly, it would be better for the project at this point if he walked away.”
How to buy Tezos?
There are many online ICO buying sites where Tezos is listed-
HitBTC (XTZ/BTC, XTZ/ETH, XTZ/USTD)
Gate.io (XTZ/BTC, XTZ/ETH, XTZ/USTD)
Gatecoin (XTZ/BTC, XTZ/USD)
Tezos still needs to get listed in major exchange sites. Moreover, there is no official wallet to store this cryptocoin. However, there are few wallet options like-
Desktop Wallet: Kukai
Mobile Wallet: TezBox, Tezos.blue (iOS, Android, Windows)
Web Wallet: Kukai, TezBox
In a broader sense, Tezos can be stored in different ways- Private and Public key. The public key is used for receiving Tezos, whereas Private Key used for access Tezos wallet. However, there is Hardware Wallets too which looks USB devices and contain private key securing closed environment.
Difference between Ethereum and Tezos-
There is a slight difference between Ethereum and Tezos which is important to know-
Ethereum- Smart Contract Platform
Tezos- Smart Contract+ Built-In-Governance + facilitates formal verification
Ethereum- Proof of Work+ Proof of Stake
Tezos- Delegated Proof of Stake
Ethereum- Pre-sale July 2014 raised $18m in Bitcoin
Tezos- Pre-sale July 2017 raised $232 m in Bitcoin
The Team behind this coin-
Tezos is the brainchild of Frenchmen Arthur Breitman. Other members who pushed this project further are-Kathleen Breitman, Vincent Bernardoff, Benjamin Canou, and other.
Since Tezos founders have launched their Beta version, offering some promising innovation, it is important to see how it manages in Governance. Blockchain Governance is the most arduous task and is a completely novel field consisting of creating sustainable and governance mechanisms. Tezos is an open source and self-amending blockchain platform enabling to write smart contracts and building DApps. Although there are many similar platforms, Tezos remains quite different.
Also, Bitcoin and Ethereum may provide some unique innovations and verifiable sustainability and security, Tezos can still provide a new model for on-chain governance of decentralized networks.