Skip to content
What is Tezos (XTZ)?
Carla Moretti
- Home
- /
- Cryptocurrencies
- /
- What is Tezos (XTZ)?
Carla Moretti
What is Tezos?
Tezos (XTZ) is a blockchain-based platform that enables the creation of decentralized applications and smart contracts. It was founded in 2014 by Arthur Breitman and Kathleen Breitman, and it is maintained by the Tezos Foundation, a non-profit organization based in Switzerland. The Tezos blockchain is designed to be self-amending, which means that changes to the protocol can be proposed and implemented by the Tezos network itself through an on-chain governance process.
Tezos (XTZ) is a promising cryptocurrency with a self-amending blockchain that offers a secure platform for developers to build decentralized applications and smart contracts. In this article, we will explore what Tezos is, how it works, its key features, weaknesses, and future prospects.
Who Created Tezos?
The Tezos Foundation is a non-profit organization that is responsible for promoting the Tezos platform and supporting its development. It was created in 2018 as part of the Tezos ICO, which raised over $232 million in funding.
How Does Tezos Work?
Tezos uses a proof-of-stake consensus mechanism called baking, which is more energy-efficient and requires less computational power than other consensus mechanisms. This means that users can participate in the network’s consensus mechanism by staking their Tezos tokens, which helps to secure the network and earn rewards.
Tezos also has a unique on-chain governance mechanism that allows for the platform to evolve over time through a promotion vote period. This mechanism enables Tezos users to propose and vote on changes to the protocol without requiring a hard fork, which can be a contentious and disruptive process. Off-chain governance is also present to ensure safety and code correctness.
Tezos Key Features
- Self-amending blockchain: Tezos is designed to be a self-amending blockchain, which means that changes to the protocol can be proposed and implemented by the Tezos network itself.
- Proof-of-stake consensus mechanism: Tezos uses a proof-of-stake consensus mechanism called baking, which is more energy-efficient and requires less computational power than other consensus mechanisms.
- On-chain governance: Tezos has an on-chain governance mechanism that allows for the platform to evolve over time without requiring a hard fork.
- Support for multiple programming languages: Tezos supports multiple programming languages, including Michelson, SmartPy, and Ligo.
- Smarter smart contracts: Tezos smart contracts are written in Michelson, a domain-specific language that is designed to make it easier to write safer and more secure smart contracts.
Weaknesses of Tezos
One of the weaknesses of Tezos is its relative lack of adoption compared to other blockchain platforms like Ethereum. Additionally, the on-chain governance mechanism, while innovative, can also be slow and contentious at times, which may hinder the platform’s ability to evolve and adapt quickly.
How is Tezos Created?
Tezos is created through a process called baking, which is similar to mining in other blockchain platforms. However, instead of using computational power to solve complex mathematical problems, bakers validate transactions and add them to the blockchain by staking their Tezos tokens.
Which Blockchain Does Tezos Use?
Tezos uses its own blockchain, which is designed to be self-amending and support on-chain governance.
How to Use Tezos?
Tezos users can interact with the network in several ways. One of the most popular is through dApps (decentralized applications), which are built on top of the Tezos blockchain using smart contracts. These dApps can range from simple games to complex financial applications. Users can also buy and sell Tezos on cryptocurrency exchanges, send and receive XTZ using a Tezos wallet, or participate in the Tezos network as validators by staking their XTZ.
How to Buy Tezos?
Buying Tezos is relatively straightforward. You can purchase XTZ on major cryptocurrency exchanges such as Binance, Kraken, and Coinbase. Simply create an account on the exchange, deposit funds, and then buy XTZ using Bitcoin, Ethereum, or fiat currency. It’s worth noting that buying Tezos on an exchange is subject to market volatility and can be risky. As such, it’s important to do your research and understand the risks before investing.
How to Store Tezos?
Storing Tezos is crucial for ensuring the security of your investment. Tezos can be stored in a range of wallets, including hardware wallets like Ledger and Trezor, as well as software wallets like Galleon and Exodus. It’s important to note that storing your Tezos on an exchange is not recommended, as exchanges are a prime target for hackers. Instead, it’s best to store your XTZ in a private wallet where you control the private keys.
Best Place to Stake Tezos
Staking Tezos is a popular way for users to earn a passive income while also supporting the network. There are several staking platforms and services available, including Tezos Capital, Tezos Community, and MyTezosBaker. The best place to stake Tezos depends on your personal preferences and risk tolerance. Some platforms offer higher rewards but are less established, while others are more established but offer lower rewards. As with any investment, it’s important to do your research and understand the risks before staking.
Future of Tezos
The future of Tezos looks bright. The Tezos ecosystem continues to grow, with new dApps and projects being developed on the platform. The Tezos Foundation is also actively promoting the use of the platform and providing support for developers. In addition, the platform’s on-chain governance system allows for upgrades and improvements to be made seamlessly and without disruption. The use of proof-of-stake and the promotion vote period also ensure the safety and code correctness of the Tezos protocol. Overall, Tezos has a strong community and a solid foundation for future growth.
Closing Thoughts
Tezos is a unique blockchain platform that offers on-chain governance and smart contracts, making it an attractive option for developers and users alike. With its proof-of-stake consensus algorithm, Tezos offers a more energy-efficient and secure alternative to traditional proof-of-work blockchains. While the platform has some weaknesses, including a lack of widespread adoption and a limited track record, it has a promising future and a dedicated community of supporters. If you’re interested in buying Tezos, it’s important to do your research and understand the risks involved, but for those who believe in the platform’s potential, Tezos is a solid investment option.
Risks in Investing in Tezos (or any Cryptocurrency)
It’s important to note that investing in Tezos, or any cryptocurrency, is not without risks. Cryptocurrencies are highly volatile, and their value can fluctuate rapidly based on market conditions. In addition, the regulatory landscape surrounding cryptocurrencies is still evolving, and changes in regulation could impact the value and adoption of Tezos. It’s important to only invest what you can afford to lose and to do your research before investing.
Our extensive analysis of the different Cryptocurrencies doesn’t stop here. You can also check out our “What is The Sandbox (SAND)?” guide to know more about one of the biggest metaverse base game projects.
FAQ
Most frequent questions and answers
Tezos is a blockchain platform that offers on-chain governance and smart contracts, making it an attractive option for developers and users alike.
Tezos was founded by Arthur and Kathleen Breitman.
Tezos uses a proof-of-stake consensus algorithm, which is more energy-efficient and secure than traditional proof-of-work blockchains. It also features an on-chain governance system that allows for upgrades and improvements to be made seamlessly and without disruption.
The Tezos Foundation is a non-profit organization that supports the development and adoption of the Tezos platform.
The Tezos ICO (initial coin offering) was a fundraising event in 2017 that raised over $230 million for the development of the Tezos platform.
On-chain governance is a system in which stakeholders in a blockchain platform can vote on proposed upgrades and changes to the protocol.
Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
Proof of stake is a consensus algorithm used in blockchain networks that requires participants to stake their cryptocurrency holdings as collateral in order to participate in the validation process.
Off-chain governance is a system in which changes and upgrades to a blockchain platform are proposed and implemented outside of the blockchain itself.
Tezos can be sold on major cryptocurrency exchanges such as Binance, Kraken, and Coinbase using Bitcoin, Ethereum, or fiat currency.
Skrumble.com provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade, or sell any investment instruments or products, including but not limited to cryptocurrencies, or use any specific exchange. Please do not use this website as investment advice, financial advice, or legal advice, and each individual’s needs may vary from that of the author. Investing in financial instruments, including cryptocurrencies, carries a high risk and is not suitable for all investors. It is possible to lose the entire initial investment, so do not invest what you cannot afford to lose. We strongly advise conducting your own research before making any investment decisions. This post includes affiliate links with our partners who may compensate us.
To view our privacy policy read here.
