Tezos (XTZ) - This is one of the cryptocurrencies with the most scandalous history and many contradictions. The idea of creating a unique coin was born in the 2011 year, but the first tokens saw the light only in the summer of the 2017 year.
Tezos was created as a decentralized platform of a completely new generation, which has the unique functions of updating the network and operating smart contracts.
Let's look at how this coin is different from others, and why it has a special fate.
History of creation
The idea of creating Tezos came from Arthur and Kathleen Breitmanov back in 2011, it was then that the first preparatory events were held. However, the real work on the project began only in 2014 year, during which the technical basis was developed, the legal documentation was prepared by White Paper. The creators carefully prepared for the ICO, which was scheduled for 22 May 2017.
However, a few weeks before the start of the ICO, the team announced that the launch of the primary distribution of tokens was postponed to July 1 on the 2017 due to a flaw in the legal documentation. Investors were not at all worried about this event, because the project had a weighty argument in the form of a developed technology and an interesting idea.
In early July, the long-awaited ICO started, which eventually collected $ 232 million and became one of the most successful cryptocurrencies in its history. Anyone could take part in the primary distribution of coins, as the organizers did not set any limits.
In terms of participation, it was stated that investors will not be able to perform operations with a token within four months after the completion of the ICO. Time passed, and there was no presentation of a real product (the developers promised that during the first four months most of the project would be implemented). Investors hoped that in a specified time the finished product would be released, which would raise the price of the token. But the platform was not ready yet, and the cost of the XTZ did not grow. In addition, the market was sated due to the large number of coins sold on ICO. All this has caused investors to fall into the trap.
Then followed a series of lawsuits from disappointed investors, who demanded a return of the money and compensate for the losses incurred.
Finally, a year after the launch of ICO, 1 on July 2018, the developers announced the launch of the beta version of the Tezos platform. However, despite this significant event, the XTZ token has fallen sharply, as investors began to massively sell their coins in the hope of taking profits, or at least "discourage" the investments.
Team
Tezos team consists of a small number of people - these are the founders and a few developers.
- Arthur Breitman is the founder of the project. Previously, he worked as a researcher at Google X and an analyst at Goldman Sachs.
- Kathleen Breitman - Co-founder of Tezos. Was a strategic partner of the Netherlands company R3 and others, including Accenture, Bridgewater Associates, Wall Street Journal.
- Ryan Jespersen is President of the Tezos T2 Foundation. His story is very interesting, since before that he was a simple investor of Tezos (XTZ). However, when the company started having problems, Ryan organized petitions, wrote press releases, interacted with the company on behalf of the public. In many ways, Tezos did not fall apart only because of its efforts. For this, the founders offered him the presidency of the Tezos T2 Foundation.
Technology
Tezos is an open source decentralized platform with a self-government system that operates on the basis of smart contracts. In principle, it is similar to Ethereum, however, it has some improvements, for example, on-chain management. The main difference between Tezos is that it has a modular design with the ability to make changes to the protocol by using the modernized consensus algorithm Proof-of-Stake, however, community members can vote on the implementation of a change.
Architecture
Tezos is a special coin due to its architecture, the device of which made it possible to use the network self-update system. The architecture of the Tezos blockchain is divided into three levels:
- Network protocol;
- Transaction protocol;
- Consensus protocol.
The peculiarity of this cryptocurrency is that the system has a modular structure, which means that each of the levels (protocols) can be updated independently of the others, i.e. without holding a "fork." This is possible due to the fact that the Tezos code is written in the Ocaml programming language.
Consensus algorithm
Unlike Bitcoin and many other cryptocurrencies that were created based on its code, Tezos uses a modified DPoS consensus algorithm (delegated share proof) instead of PoW (proof of work done). Its use has allowed to implement the Gouvernance system, in which users can vote for making certain changes to the cryptocurrency. In addition, algorithms from the PoS family, including DPoS, increase the speed of transactions. The participant can also delegate his voice to another user. However, only those members of the network who are holders of XTZ tokens will be able to exercise their right to vote.
The process of creating and verifying blocks in the Tezos network is called Baking - “baking” (analogous to mining in Bitcoin), and the participants who participate in this process are bakers. Bakers are an important component of the PoS mechanism and provide a guarantee that all the verification in the block is correct, and that in the process of creating the blocks, there is no double spending attack. If one of the bakers tries to deceive the system, then the network will apply sanctions in the form of depriving the participant of the deposit. For honest work done bakers are rewarded with XTZ tokens. To join the bakers team, a member must submit an application for official website of the project.
Smart contracts
Unlike Ethereum and the projects created on its base, which work on the EVM machine, the Tezos developers created an environment for smart contracts from scratch using the Michelson programming language. The peculiarity of this language is that it is used for formal verification. Formal verification is a process that guarantees the correctness of a computer code by performing mathematical verification operations. This method is used in areas in which errors in computer code are unacceptable, for example, banking or aerospace.
"Baking" instead of mining
In the Bitcoin network, new blocks are created by solving complex mathematical problems using the computing power of the equipment; in Tezos, the blocks are generated due to "baking".
What it is?
“Baking” (baking, English baking) is a new kind of building blocks, first proposed by Tezos. The process happens like this:
- The algorithm randomly chooses the coins that will participate in the formation of blocks.
- Holders of "elected" Coin several weeks before participating in the generation of blocks receive an alert indicating the period during which they have to make a deposit (its size depends on how many blocks the “holder” was “tasked” to create). In White Paper Tezos, this deposit is designated as a “debt obligation”.
- The deposit is “frozen” and defrosted only in the case of honest work of the “baker” after the accrual of the award in the form of new XTZ.
According to the calculations given in the technical documentation, on average, the earnings of the "baker" is 33% of the deposit amount.
Advantages and disadvantages
Tezos team was able to offer a unique product that is able to solve key problems concerning distributed network technologies. Among the advantages of Tezos compared to other cryptocurrencies are the following:
- No need for "forks" to improve the protocol - the modular structure allows you to make changes to each of the three protocols separately, without interfering with the code of other levels of the coin architecture. In addition, in Tezos, the network is updated automatically, and developers do not need to release a new version each time. This is also convenient for users, since it is not necessary to update the software every time.
- Smart contracts that support formal verification - unlike most other cryptocurrencies that run on the Ethereum virtual machine (EVM), Tezos has its own virtual machine written in the Michelson programming language. It is he who allows you to create smart contracts with formal verification.
- Using the consensus algorithm PoS, which requires less energy, improves the speed of transactions and reduces the likelihood of an attack 51%.
- Ability to vote - thanks to the use of the aforementioned algorithm of consensus, or rather, its subspecies - DPoS, participants can vote for projects within the network, as well as offer their ideas.
- Opportunities for developers - independent developers can offer solutions that improve the project, and if other participants vote for the proposed idea, the developer will be able to implement the project and receive payment in XTZ tokens.
However, the coin also has a couple of drawbacks:
- Unpopular programming language - the platform code is written in a fairly rare and unpopular Ocaml language, which significantly reduces the number of potential developers who could be engaged in the project.
- The depreciation of tokens due to their unlimited release during the ICO period - according to the creators, they “wanted to give everyone the opportunity to participate in the ICO”, therefore the emission of tokens was unlimited. This led to the satiation of the market, and the depreciation of coins.
Interesting
Cooperation. Despite its not very clean story, Tezos has already entered into partnership agreements with some companies:
- OCaml Labs - in the framework of cooperation, Tezos will continue to explore the possibilities of the Ocaml language in which the project code is written. In particular, OCaml Labs will provide Tezos with expanded access to the Ocaml libraries.
- Inria - Inria's experienced specialists will conduct a thorough analysis of the Tezos product code for bugs and errors.
- IMDEA - the purpose of cooperation is the confidentiality, security and anonymity of smart contracts and the distributed register Tezos. In addition, the Tezos Foundation will provide funding for several training programs for masters and graduate students in Blokchain specialization at the International Technical University of Madrid.
- PwC Switzerland - cooperation concerns the conduct of an external audit of Tezos' financial activities.
Scandals Tezos is one of the most “scandalous” cryptocurrencies. This long story began with the fact that immediately after the completion of the ICO, the crypto community learned that long before the start of the sale of tokens, Tezos had organized a presale for a large American investor who was able to buy tokens at a discount. Although the creators before the start of ICO said that they want to create equal conditions for all investors - this was also an explanation for the unlimited preamine of tokens.
However, this was only the beginning. After this unpleasant news, there was a conflict between the Breitmans and Johann Hevers, who was the president of the Tezos Foundation. The fund was supposed to act as a guarantor of the use of the money received as a result of ICO for its intended purpose. Hevers accused Breitman of “monopolizing” the rights to the product code and that they want to oust him from the project. Arthur and Kathleen Breitman, in turn, accused Gevers of self-promotion and lies.
Disagreements in the team caused many investors to doubt the future of the project and wanted to sell the acquired coins as quickly as possible. However, under the terms of the ICO agreement, they could not do this for four months after the sale of tokens was completed. Considering the fact that the developers did not provide the finished product after four months, as promised, large and medium-sized investors filed a collective lawsuit against the company, accusing of fraud and selling unregistered securities and demanding a refund and compensation for losses.
Because of the constant lawsuits and the struggle for power, the project was on the verge of closure, and many no longer hoped that the network would ever be launched. But despite all the difficulties, Tezos was able to resolve this difficult situation, thanks in large part to the efforts of Ryan Jespersen, which we described above.
Course and capitalization. Where can I buy
At the time of this writing (beginning of October 2018), the cost of one XTZ coin is $ 1,3, and the capitalization is $ 792,67 million. In the Coinmarketcap Tezos rating, 18 ranks second.
The graph and capitalization of cryptocurrency since the beginning of 2018, looks like this:
The maximum price for Tezos for the entire existence of the coin was $ 11,21 - this level XTZ showed in January 2018, when almost all coins increased sharply. A big failure in value happened in July of this year, when the company announced the long-awaited launch of a test network - after this news, Coin fell from $ 4,04 to $ 1,69. This was probably due to the fact that many investors were waiting for the launch of the working product in the hope of at least discouraging investments. Now the cost has fallen 8,5 times compared to the peak price of winter.
Tezos is a relatively new coin, besides, it has a difficult history. Therefore, there are not many exchanges where you can buy it. Only three reliable and proven sites offer the following service: Bitfinex, HitBTC, Gate.io. You can buy XTZ for the most popular cryptocurrencies - BTC, ETH, USDT or for a dollar.
For the storage of Tezos coins, there is an official TezBox wallet, which was launched a couple of weeks after the completion of the ICO.
Development prospects
Tezos is one of the few open source projects that presented a truly innovative solution. This coin boasts several innovations at once: the creation of smart contracts with the support of formal verification, a unique algorithm for generating blocks and issuing coins (baking), the ability to make changes to the protocol without the need to update the network. If the team manages to complete all the plans outlined in White Paper, then Tezos can create a real breakthrough in the field of blockchain and distributed network technologies.
However, the reputation of the coin is spoiled by differences within the team and a series of lawsuits, which has not ended so far.
Many have predicted that this project "will go to the grave." So far it is unclear what the fate of Tezos will be, but the team is trying with all its might to regain the status of a serious project, which it presented before the start of the ICO. At the moment, the main Tezos network is already running, and developers are working hard to improve its privacy and security.