Tezos is a decentralized, open-source energy efficient Proof of Stake blockchain network that can execute peer-to-peer transactions and serve as a platform for deploying smart contracts. The native cryptocurrency for the Tezos blockchain is the Tez which has the symbol XTZ.
Like Bitcoin and Ethereum, Tezos is a decentralized ledger that makes use of blockchain technology. Like Ethereum, Tezos is designed to make use of smart contracts. The term “Tezos” is ancient Greek for “smart contract,” according to the developers.
However, Tezos goes beyond previous offerings. It takes the smart contract concept “one step further by letting participants directly control the rules of the network.
Tezos is intended to be an evolving network. This flexibility is seen as a crucial aspect of its system. In particular, the lack of flexibility and scalability in Bitcoin has saddled it with numerous difficulties and growing pains. Ethereum has grown in large part because of its flexibility, and Tezos continues in that direction.
How does Tezos work?
The Tezos blockchain enables many features common to cryptocurrencies.
Developers can use its software to run custom programming logic (smart contracts) and design new programs (decentralized applications) meant to replicate products and services.
Yet, its voting features required a different design.
More specifically, the Tezos blockchain would be broken into two parts:
Shell – The code that amends itself based on user voting, is also responsible for interpreting transactions and administrative operations. Protocol – The code responsible for sending proposals to the shell for review.
- Tezos utilizes the Proof-of-Stake consensus mechanism in which participants provide only the necessary computational resources to keep the network working. This is inexpensive as compared to other blockchains that use PoW and other PoS processes.
- Tezos blockchain allows any stakeholder to participate in the consensus mechanism and rewards for contributing to the security and stability of the network.
- Like other blockchain platforms, it allows blockchain developers to create smart contracts and develop dApps. Michelson, Tezos’s native smart contract language, facilitates formal verification, which is commonly used in mission-critical environments like aerospace, nuclear, etc.
- When it comes to safety and code correctness, Tezos claims to provide both for high-value use cases.
- Tezos aims to provide the safety and code correctness required for assets and other high-value use cases.
- Tezos possesses a modular architecture and formal upgrade mechanism. Or we can say that it is self-amendment that allows the network to propose and adopt new technological innovations smoothly as they emerge.
- It offers formal and systematic procedures for stakeholders to reach an agreement on proposed protocol amendments.
- The primary pitfall associated with Tezos is a delay in token issuance, causing several users to miss out on their rewards without being informed.
- Although investors and delegators can spend on XTZ tokens, they are sticking to other popular coins such as Bitcoin, Ethereum, etc. There is a lack of commercial support with Tezos.
- Presently, blockchain developers consider Tezos as an immature network as it is difficult to predict what its transaction fees and speeds will be once the platform becomes more widespread.
- Due to the delay in token issuance and other reasons, Tezos has dealt with behind-the-scenes drama and other conflicts which act as a barrier to its popularity.
Future of Tezos
The future of Tezos was once again looking bright in 2021. Though the rapid rise in the price of tez suggests caution in the short term, record highs resolve some problems. In particular, all of those who want their money back could simply sell their tez on the market for a profit. More importantly, Tezos proved its staying power by surviving the bear market and reaching new highs.