Tezos (XTZ)
4 minutes
Beginner
Tezos is a multi-purpose, security-oriented, open-source blockchain designed to support the evolution of Web 3.0. It focuses on user participation and governance as its foundational principles and aims to make Web 3.0 a user-driven and user-centric movement. This platform allows users to interact and exchange value with each other freely, without requiring intermediaries.
Meanwhile, Tezos is capable of executing peer-to-peer transactions and is a platform for deploying smart contracts. Additionally, it can be easily upgraded to include features that expand its functionality. Here are some of the blockchain's features:
- Tezos uses programming languages such as OCaml and Michelson to provide institutional-grade security for the future of Web 3.0.
- The Tezos platform is built using mechanisms that provide community governance and participation. Users can participate in evaluating, proposing, and approving proposals on Tezos.
- It operates on an efficient Proof-of-Stake algorithm, which requires less energy and cost to operate.
- Smart contracts on Tezos can use formal verification, which allows for their mathematical verification. This is also reliable and secure.
- The Tezos blockchain is built in a way that it can quickly configure, adapt, and add features through the update mechanism.
Creating
The most significant proposition of the Tezos blockchain is its on-chain governance, which allows users to quickly introduce future changes together.
Tezos was founded by Arthur Breitman, who in 2014 wrote a position paper detailing his vision for Web 3.0. He wrote both papers under the pseudonym "L.M. Goodman," much like Bitcoin's anonymous founder Satoshi Nakamoto. In his paper, he emphasized that Bitcoin's design does not account for a more inclusive governance process and token creation. This led him and his wife, Kathleen Breitman, to develop Tezos with a token issuance and smart contract platform in conjunction with an on-chain governance model.
How does Tezos work?
Tezos ecosystem is divided into network, transactional, and consensus protocols to accommodate future changes. The transaction and consensus protocols operate separately and connect to the shared network shell. This shell is responsible for maintaining the current state of the blockchain and for resolving internal checks to confirm new changes. Changes can be proposed by anyone to be put to a vote by token holders. Developers proposing changes are asked to make a fee to incentivize more efficient developments on the platform.
Tezos uses a customizable and novel version of the Proof-of-Stake (PoS) consensus model. In this model, token holders can lock up their tokens and participate in consensus in exchange for the ability to validate blocks. In the crypto industry, this process is known as staking. However, Tezos refers to it as "baking". The platform allows users to delegate their tokens to bakers without transferring ownership rights.
The baker and the token owner who delegates their token receive proportional rewards in the form of new XTZ tokens. This system allows token holders with less than the required amount (at least 8,000 XTZ tokens) to become a baker and participate in the validation process. Within the consensus mechanism, a proposal is only accepted with a qualified majority (over 80% of votes in favor).
XTZ token
The XTZ token is the native token of the Tezos platform. It is used to pay for transactions and execute smart contracts. XTZ tokens play a central role in the consensus mechanism and governance system of the platform on the network. Moreover, validators on the platform (also known as bakers) receive rewards by staking their tokens and validating transactions. Token holders with less than the required amount can also earn rewards by delegating their tokens to bakers.
Token holders also receive one vote per token to vote on proposals made for future upgrades. Additionally, the Tezos Foundation is responsible for distributing the funds raised during Tezos' initial coin offering (ICO). These funds are used to support the growth and development of the Tezos ecosystem. However, the Foundation does not control the future direction of the Tezos protocol.
Conclusion
Tezos is a multipurpose blockchain designed to put user participation and governance at the center of the Web 3.0 revolution. The Tezos blockchain allows for the creation and deployment of smart contracts. Additionally, it enables users to freely interact and exchange value with each other without intermediaries. The Tezos infrastructure allows for rapid updates to its blockchain to add additional functionality.
The native token of the platform, XTZ, is used to pay transaction fees and execute smart contracts. Additionally, the XTZ token allows you to participate in the consensus and governance of the platform and receive rewards in return.
