What is Tezos (XTZ)? How To Create Your Own Cryptocurrency On Tezos Blockchain?
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Tezos is a decentralized blockchain that guides itself by building a true digital commonwealth and aid formal verification, a technique which mathematically proves the truth of the code governing transactions and boosts the security of the most sensitive or financially weighted smart contracts.
Additionally, their Tezos protocol connects people from all over the world by allowing for more efficient payments.
In this guide, we get into all the details including:
- What is Tezos?
- Tezos Team
- What are the type of Tezos Parallel Blockchain?
- How Does Tezos Work?
- What are the services of Tezos?
- Highlights of Tezos
- What is on-chain governance?
- What is Michelson?
- What are the advantages of Tezos?
- What is Tezos` RoadMap?
- Difference Between Tezos And Ethereum
- Where to Buy XTZ
- XTZ Trading History
- Where to Store XTZ
- What does it aim to solve?
- Understanding the Tezos amendment process
- Tezos Athens Proposals
- Final Thoughts
- Additional Tezos Resources
How It All Started
XTZ is the cryptocurrency of the Tezos platform. The Tezos Foundation has enlarged to focus on education, research, and content of its own platform. It is a good sign as the project aims to continue to grow and evolve with time. By following the path of research, Tezos can extract active attention from the industry. It can further help to push the cryptocurrency towards mass adoption in the future of the crypto market.
A number of renowned institutions are involved with the platform’s educational and research efforts. Some popular names include INRIA, Cryptium Labs, Cornell University, France-IOI and more…
Who is behind Tezos?
Tezos was developed by Arthur Breitman. He studied applied mathematics and computer science in France and then shifted to the U.S. to study financial mathematics. Kathleen Breitman, his wife, has also engaged in developing this project. She is a former employee of an enterprise software company that focuses on distributed database technology. In 2014 Arthur Breitman launched a paper where he stressed Bitcoin’s flaws. And he submitted his solution. It was a self-amending cryptocurrency. In 2015 Breitman needed to attract several banks. But this attempt failed. In 2016 the Breitmans decided to conduct an ICO. Over half a year they got $612,000. The Tezos ICO was held on July 1st, 2017 and lasted for 13 days. Tezos received $232 million.
What is Tezos: New Platform for Smart Contract & Decentralized Applications
Tezos is similar to other smart contracts and dApp platforms such as Ethereum, NEO, QTUM, ICON, Waves, etc but with one key difference, i.e, Tezos is a self-amending cryptographic ledger which can expand as per the needs of the industry without getting forked from time to time. In the Tezos blockchain network, the stakeholders govern the protocol. Tezos has set out to create a true digital commonwealth, a network in which all people involved can let their voices be heard and have a shared honesty.
Tezos explained as a brand-new peer-to-peer blockchain has helped a way of computation checking which proves the accuracy of the code which regulates all transactions.
The platform has three layers: a network, transactions, and consensus. All factors are modular in order to make their replacement simple.
Tezos Parallel Blockchain:
Tezos has three parallel blockchains, that is called:
Mainnet is where tezos have a real dollar value and where the network is decentralized. Zeronet is a causing edge test network used mainly by the core developers and is reset usually many times per day.
How Does Tezos Work?
Tezos power a “Network Shell” to allow it’s self-amending cryptographic ledger features. In order to know what are the blockchain protocols involved & want to know how Network Shell works? Here we will explain deeply:
There are 3 types of blockchain protocol layers:-
- The Network Protocol
- The Transaction Protocol
- The Consensus Protocol
Network Protocol - The Network Protocol is known as the “Gossip Protocol” is the way how transactions are shown across the network between nodes.
The Network Protocol also includes:-
- Downloading the Blockchain,
- Broadcasting Blocks to Networks,
- Detecting Peers.
Transaction Protocol - The Transaction Protocol is explained by the scripting language used in developing Cryptocurrency. For example, the Unspent Transaction Output Model (UTXO) in the case of Bitcoin.
Following the example of Bitcoin, the transaction protocol includes the codes which mines Bitcoins, uses digital signatures to identify and verify the transaction. All thing that is a part of executing a transaction happen is contained in Transaction Protocol.
All changes made in this protocol are “Soft Forks” which does not affect the consensus algorithms and thus does not splits the chain into two different chains, as compared to “Hard Forks”
Consensus Protocol - The Consensus Protocol is a smart way used in the Blockchain technology to reach consensus across all the nodes in the network. For example, Bitcoin uses Proof-Of-Work (POW) as it’s consensus mechanism. Tezos uses an advanced form of Proof-Of-Stake model known as “Delegated Proof-of-Stake”
Services of Tezos Platform:
On the Tezos platform, there are 4 services;
- The Node
- The Baker
- The Client
- The Evil Client
Let us explain each service in a simple word.
The Tezos node is the main program. The node connects to the network, verifies all transactions and connects to the global distributed public ledger.
The Tezos platform uses the term client for the wallet. The tezos wallet handles contract addresses.
The baker watches the network and creates blocks. An evil client is an integration test tool. The tool tries to trick the node for the node to find the fake data or large amounts of data.
As clearly mentioned above, the node is the main program. We dissect the node in details
The node has the P2P layer, the context database, and the network shell.
1.1 The Peer-Peer layer
The peer-peer is the most detail component of the node. This peer layer hints to the node. The p2p layer has the following additional features.
Each and every peer layer comes with a private key. The peer layer provides the key with a stamp of the proof of stake(PoS). The meaning of this feature is if a peer in the community wants to open a new identity within the platform they will obtain a low cost.
Tezos platform usually exchanges known good peers. This exchange is a method to achieve the best connectivity within the platform.
The peer-peer layer confirms that all the communication between the nodes is authentic and encrypted for safety, security, and reliability.
1.2 The Context Database
This component of the node stores the entire data. The data stored here is related to the distributed ledger. The Tezos platform uses Irmin as the backend. Irmin assures a functional, view of the storage, and it encodes the distributed public ledger. The hash tree form explores the public ledger which eases the direct verification for clients.
Tezos hardly run scalability tests on Irmin to check its entire performance on large-scale transactions. Also, the database is the blocks and operations.
1.3 Network Shell
Between the network and the protocol lies the interface. The interface is the network shell. It plays a key role in the platform. The network shell takes over the blocks sent by the peers and verifies it against the present protocol. The network shell is affably the most delicate part of the node. The delicate nature is not in the security sense but rather the capability to get it right. However, the Tezos Foundation is frequently looking for smart ways to get it right.
The updater grabs the source of a new protocol (a “protocol upgrade”), compiles them on the fly and replaces the testnet with this new protocol. After a period of time, it may promote the test protocol to replace the main protocol, completing our default, two-phase, protocol upgrade mechanism.
The client offers a higher level and nice interface to the node and the protocol than the RPCs do. It can
- Store keys and track contracts
- Send transactions
- Type check and trace smart contracts
- Deploy smart contracts
- Trigger contract execution with data
The baker builds and validates blocks, manages its bond deposits and recorder other blocks when called upon by the proof of stake (PoS) algorithm. We call it baking for lack of a better word for what a proof-of-stake “miner” does. Mining gives proof-of-work, forging sounds like forgery, minting implies coin creation. We went with baking to highlight the French roots of the projects, and because bread somewhat look like blocks.
The attacker is currently fairly minimal. It mostly focuses on logical denial of service attacks by submitting corrupted data and trying to trick nodes into performing large amounts of useless validation.
Explore more from here - A quick tour of the Tezos code base, and the state of its development
Highlights of Tezos Network
On-Chain Governance and Self-Amending:
Tezos publish to be a self-amending cryptographic ledger. This means that Tezos is developed and designed to allow a gentle evolution of the blockchain rather than having a hard fork. Unlike Bitcoin and Ethereum, Tezos’ vision is that hard forks shouldn’t be a standard way to upgrade the system over time. That’s why the entire value proposal of XTZ is to be a self-governing project.
If you have a stake in Tezos, you can also participate in governing the protocol. The process is called On-Chain Governance. It allows the coin holders to vote for future performance.
On-chain governance is a system for upgrading blockchains in which code changes are encoded into the protocol and determined by stakeholder voting. Code changes can be suggested by anyone, though regularly its the core developers and token holders vote whether or not those changes should be integrated into the protocol.
Benefits of On-Chain Governance
On-chain governance has a number of benefits over its informal counterpart including:
- Decentralized decision-making process
- Binding code changes
- Quicker Consensus
- Fewer Malicious Hard Forks
Smart contracts & formal verification
In addition to this self-governing system, Tezos also supports smart contracts, which makes it a sort of hybrid between Dash and Ethereum.
Tezos’ smart contract programming language is called Michelson and, similarly to Ethereum’s Solidity, it is built specifically for writing smart contracts on Tezos. It is a functional language that facilitates formal verifications.
Formal verification basically allows developers to mathematically prove the correctness of their smart contract code and that some properties of the contract will be managed. However, this doesn’t mean that the code is 100% correct and won’t have bugs.
Consensus – Liquid Proof-of-Stake (Tezos)
Tezos node is launching with a delegated proof-of-stake consensus mechanism. It works by letting every stakeholder allow to create blocks and receive rewards casually and in proportion to their holdings. This means that even a very smallholder can have a chance to create a block and receive a reward. Still, the system is delegated, every token holder can participate as a delegate regardless of the amount they hold.
What are the advantages of Tezos?
- Decentralized and automated upgrades. Tezos is the only blockchain that has an capability of decentralized and automated upgrading.
- Upgrade without hard forks. Because the upgrades are fixed by the Tezos community in accord to clear rules. This helps to avoid inactivity and to keep improving.
- A well-known team of developers.
- High level of trust among investors.
- The PoS protocol provides a high level of system security.
- A scalable and reliable platform based on smart contracts. This kind of platform can be potentially used in any kind of business.
What is Tezos` RoadMap?
The Tezos roadmap will involve highly the movement from Betanet to Mainnet. Moving from the test Alphabet to the Betanet was an important milestone. But, the Mainnet has to be the ultimate. For now, members of the community must be on the lookout for any surprise announcement like it was with the launch.
Difference Between Tezos And Ethereum
Ref - Coinbase.com
Tezos Coins: XTZ
The Tezos coin the XTZ, also known as the tezzies is the official coin of the currency. There is a total of 763,306,930 XTZ coins as the total supply. Of the total 607,489,041 XTZ are in circulation. This translates to a $1,401,829,561 USD market caps.
At genesis block, the price is at $0.37 the price will, however, express a bullish trend and will see a 100-fold rise in a matter of time. With the size of the ICO then the growth is very much achievable.
Where To Buy Tezos Cryptocurrency?
Tezos cryptocurrency is listed on and can be purchased from the following list of cryptocurrency exchanges:-
XTZ Trading History:
Tezos Wallet | Where To Store Tezos Cryptocurrency
A Number of Wallets to Choose From for XTZ
For any new crypto coin in the market, one of the biggest struggles is searching a suitable wallet. Choosing an ideal wallet is also a tricky job as various kinds of users have different preferences. However, with the growing investor involvement in the crypto market, a number of wallet options have emerged in the past.
- Desktop Wallet: Kukai
- Mobile Wallet: TezBox, Tezos.blue (iOS, Android, Windows)
- Web Wallet: Kukai, TezBox
Some of the popular wallet options include CorTez, TezBox, Kukai, and Tezos Blue. All the mentioned wallets are suitable for its mainnet. This could also help to trigger a broader adoption for XTZ in the future.
Tezos Explorer and Blockchain Analysis Tools
At present, there is a huge demand for explorers and blockchain analysis tools in the crypto market. Respectively, a number of block explorer and transaction analysis tools for Tezos are available in the market. These advanced tools help to make the ecosystem more reachable, especially for the new market players. Some of the popular block/contract explorers include Tezex, Tzscan, Tezos.ID, and Tezos.Red.
What does it aim to solve?
The Tezos blockchain was developed to facilitate formal verification, which helps secure smart contracts and avoid buggy code. Tezos can upgrade itself without having to split (“fork”) the network into two different blockchains and disrupt the network effects that are formed over time.
The Tezos Amendment Process:
Tezos is a self-amending blockchain network which incorporates a formal, on-chain mechanism for proposing, selecting, testing, and activating protocol upgrades without the need to hard fork.
Explore more from here - Understanding the Tezos amendment process
Tezos Athens Proposals:
The proposed changes in the two Athens proposals are incremental:
Athens Proposal 1: increase the gas limit
The gas limit was set confidentially at launch to protect the chain, with the idea that it could be increased via the amendment process
Athens Proposal 2: increase the gas limit (see Proposal 1) AND reduce the roll size to 8,000 XTZ for Tezos Proof-of- Stake
In the current Tezos consensus, a baker must have 10,000 XTZ to be randomly selected to propose or endorse a block In addition to increasing the gas limit, this amendment would reduce that threshold to 8,000 XTZ, incrementally lowering the barrier to entry to baking.
Explore more from here - An overview of Athens, the first Tezos on-chain upgrade proposals
To end, the Tezos blockchain network is an open-source, self-amending cryptographic ledger platform allowing writing smart contracts and developing dApps on its own advanced platform. Even though there are many similar platforms providing the same abilities, Tezos is different as it has a unique on-chain governance mechanism that prevents any kind of hard forks and thus linking the community.
Additional Tezos Resources
Some official links that will keep you updated on Tezos:
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