Tag Archives: blockchain

What is tezos? – Advantages & Disadvantages

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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.

Understanding Tezos

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. 

Pros

  • 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.

Cons 

  • 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.

Bitcoin Basics For Beginners

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What are bitcoins?

Bitcoins are decentralized, purely digital virtual coins exchanged directly between two parties online with no middle man. Unlike modern fiat money, Bitcoin, is not controlled or backed by any bank or central government authority.

Are bitcoins anonymous and untraceable?

No, contrary to popular belief, they aren’t. A traceable trail of each Bitcoin transaction is left behind in a public log known as the blockchain. The public record prevents people from spending the same bitcoins more than once.

How does Bitcoin work?

Each bitcoin is a computer file stored in a digital wallet on a computer or smartphone. To understand how the cryptocurrency works, it helps to understand these terms and a little context:

  • Blockchain: Bitcoin is powered by open-source code known as the blockchain, which creates a shared public ledger. Each transaction is a “block” that is “chained” to the code, creating a permanent record of each transaction. Blockchain technology is at the heart of more than 10,000 cryptocurrencies that have followed in Bitcoin’s wake.
  • Private and public keys: A bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.
  • Bitcoin miners: Miners — or members of the peer-to-peer platform — then independently confirm the transaction using high-speed computers, typically within 10 to 20 minutes. Miners are paid in bitcoin for their efforts.

Bitcoin value follows the law of supply and demand — and because demand waxes and wanes, there’s a lot of volatility in the cryptocurrency’s price.

Besides mining bitcoin, which requires technical expertise and investment in high-performance computers, most people purchase bitcoins as a form of currency speculation — betting that the U.S. dollar value of one bitcoin will be higher in the future than it is today. But that’s difficult to predict.

How to store the Bitcoin?

Bitcoins can be stored in two kinds of digital wallets:

  • Hot wallet: Digital currency is stored in the cloud on a trusted exchange or provider, and accessed through a computer browser, desktop, or smartphone app.
  • Cold wallet: An encrypted portable device much like a thumb drive that allows you to download and carry your bitcoins.

Basically, a hot wallet is connected to the internet; a cold wallet is not. But you need a hot wallet to download bitcoins into a portable cold wallet.

How bitcoins are purchased?

There are four ways to get bitcoins:

  • Cryptocurrency exchanges – There are a number of exchanges in the U.S. and abroad. Coinbase is the largest cryptocurrency exchange trading more than 30 cryptocurrencies.
  • Investment brokerages – Robinhood was the first mainstream investment broker to offer Bitcoin and other cryptocurrencies (Robinhood Crypto is available in most, but not all, U.S. states). Tradestation, eToro, and Sofi Active Investing also offering cryptocurrency trading in most U.S. states.
  • Bitcoin ATMs – There are more than 7,000 bitcoin ATMs in the U.S. 
  • Peer-to-peer purchases – True to its original spirit, you can buy bitcoins directly from other bitcoin owners through peer-to-peer tools like Bisq, Bitquick, and LocalBitcoins.com.
  • Bitcoin mining – You can earn bitcoins through mining, but the technical expertise required and computer cost put this option out of reach for most.

Which companies accept Bitcoin payments?

Thousands of businesses throughout the world currently accept Bitcoin as a form of payment, including reputable e-commerce businesses like:


Burger King
Overstock
Microsoft
Subway
AT&T
KFC

Bitcoin is an incredibly speculative and volatile buy. It’s worth remembering that stock trading can give you a similar thrill — and picking stocks of established companies is generally less risky than investing in Bitcoin.