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What is Tezos?
XTZ is the token symbol of the Tezos blockchain platform. Its use is similar to other altcoins; it is used as a platform to support the initial coin offer (ICO), as well as for making micropayments on the network, promoting smart contracts, and even for voting on the future of the project. The management of the Tezos platform is entirely in the hands of the stakeholders. All interested parties have the opportunity to participate in the management of the protocol and vote on the proposed protocol updates issued by the developers, who can attach invoices to the proposed improvements so that they receive compensation if their proposal is accepted. The platform is composed in such a way that it allows you to continuously update your protocol through the chain. Tezos can therefore gradually increase over time without the need for radical changes that could cause a hard fork and divide the network.
Tezos is categorically against hard forks, so the platform is designed in such a way that it does not need to go through them; it is updated continuously based on the offers and votes of users. The network can change any protocol parameter.
To make updates, developers submit independent offers that include the expected compensation that the developer will require to implement and release the update. Anyone who owns Tezos tokens is able to vote for these proposals, and, if they are approved, the developers who proposed them can begin the work.
Who created Tezos?
Tezos was launched through an ICO in 2017, which managed to raise $232 million; one of the most extensive raising of capital in blockchain ICO history. However, the launch of the leading blockchain network was postponed due to a dispute between the founder, Diego Olivier Fernandez Pons, the president, Johann Gevers, and two other key figures in its structure, Arthur and Kathleen Breitman (twitter links), the owners of Tezos rights. Gevers finally resigned along with Diego Olivier Fernandez Pons, with two community members replacing them. The main Tezos network was finally launched in September 2018.
How to get Tezos?
Tezos has managed to reach some of the biggest exchanges around the world. However, it was unable to penetrate other secondary markets, such as underlying assets and CFDs, which are managed by regulated and reliable brokers where trading opportunities are expanding significantly. To buy Tezos where it is available, you first have to buy BTC or ETH. When you have either BTC or ETH in your portfolio, you will be able to exchange to XTZ.
Buy Tezos on an exchange of your choice and store it in Guarda Wallet.
Tezos uses the Proof-of-Stake (DPoS) delegated algorithm to reach platform consensus. Unlike Proof-of-Work (PoW), which uses real mining, DPoS provides virtual retrieval. DPoS is a coherent, high energy efficiency protocol. All owners of Tezos tokens can participate in the mining process either as a delegate or as a voter for representatives, and each user can decide whether they want to vote or prefer to vote for the delegate. In the second situation, the selected person will control our vote to vote on proposals. This algorithm aims to become a more effective form of control and put pressure on the delegates from the community. If one of the delegates abused his power, he would lose his vote. Tezos has no delegate limit, unlike other projects using DPoS.
Tezos aims to create a unique blockchain with a focus on innovation in which progress is not lost due to a gap in the future network. When buying XTZ, you have the opportunity to receive passive income thanks to the baking process, similar to the rates used by other cryptocurrencies. From an investment point of view, Tezos is great, especially after it became one of the cryptocurrencies with the largest market capitalization. In 2019, Tezos had a steady growth path, even at a time when many other cryptocurrencies were losing value.
- Tezos Node (node) – a node in the network that provides decentralization and accelerated transaction flow.
- Baker – delegates who participates in DPoS (new coin mining)
- Staking Power – the power of your vote depends on the total amount of coins in a common wallet (they are frozen to maintain the security of the blockchain). This determines how often the pool can bake new blocks.
- Baking Rights – in order to find new blocks (and receive a reward for this), you need to register a node and take a place in the queue (among other participants).
- Endorsing – block confirmation. This mechanism allows you to earn an extra profit (~ max up to 2 XTZ per block). For work, another 64 XTZ insurance deposit is required.
How to «bake» Tezos to get passive income
If you have high financial capabilities (from 10,000 XTZ) and trust the project, you can become one of the nodes that «bakes» Tezos. In essence, this is a form of proof of participation in which you receive rewards for protecting a significant number of Tezos. You will also receive online voting rights and you can also delegate the activity to other nodes and recieve a small commission.
In addition to the self-correction process, which aims to develop the Tezos protocol, there is another method by which owners of “complexion” can participate in the network.
Baking Tezos is similar to mining Bitcoin. Through baking, a necessary check must be done to create new blocks in the network. It is through this consensus mechanism that network participants provide the necessary computing power for its operation.
The advantage over bitcoins is that:
- Eliminates the need to constantly buy new equipment
- Reduces excessive energy consumption to maintain the blockchain
- Baking is the way in which Tezos holders can earn passive income with this cryptocurrency
To bake Tezos, a user must have at least 10,000 XTZ.
However, anyone with less can still delegate their share and earn income simply by owning Tezos.
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