Tezos—A Crypto Review by Tokize

€ 1.0147

0.1296
Dernière mise à jour à 06:02:04 UTC
Market Cap
€ 985,783,488.56
Fully Diluted Market Cap
€ 985,783,488.56
Volume
€ 21,173,622.7
Circulating Supply
971,491,288.47 XTZ

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Last updated at 06:15:04 UTC

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Tezos is a groundbreaking cryptocurrency distinguished by its governance and automatic updates. This guide will assess the merits and drawbacks of investing in Tezos, delving into its history, unique features and future prospects. Delve into the captivating universe of Tezos to determine if this innovative cryptocurrency is the right investment for you.

What Is Tezos (XTZ)?

Unlocking the Tezos Blockchain

Tezos (XTZ) is a trailblazing blockchain that was launched in 2018. Its primary goal is to establish an infrastructure capable of integrating new innovations without the risk of dividing its community through a hard fork.

This decentralized platform allows for development and interaction with decentralized applications, providing a high level of direct control to network participants.

The Tezos blockchain utilizes a unique consensus model called “Liquid Proof of Stake” (LPoS), which requires less energy and computing resources than current leaders such as Bitcoin and Ethereum do. Users, known as “bakers,” are rewarded for their contribution to maintaining consensus on the blockchain through staking their native token, XTZ.

Additionally, Tezos supports smart contracts and utilizes a programming language known as Michelson. This language promotes formal verification and robust infrastructure for high-value use cases. A distinctive aspect of this blockchain is its on-chain governance where all XTZ holders can participate in the decision-making process.

Tezos aims to democratize access to decentralized applications, allowing anyone to interact with a decentralized financial world. Through effective governance, energy-efficient consensus and a flexible platform for smart contracts, Tezos positions itself as a promising and innovative blockchain project, garnering global user attention throughout the industry.

The History of Tezos

Tezos is an innovative blockchain that can trace its origins back to 2014 when co-founders Arthur and Kathleen Breitman initiated the project.

In August of the same year, Arthur authored two white papers outlining his vision for a new blockchain solution. Subsequently, he established Dynamic Ledger Solutions (DLS) to manage the development of Tezos’ source code.

In July 2017, Tezos gained attention for its ambition to create a more efficient virtual machine. The Tezos Initial Coin Offering (ICO), held the same year, successfully raised $232 million, making it one of the largest ICOs ever conducted. However, internal disagreements and legal issues postponed the project’s development.

Despite these challenges, Tezos founders successfully launched the beta network in June 2018, generating significant interest from investors. The Tezos mainnet became operational in September 2018. Since then, the native-XTZ token has seen substantial growth in market capitalization and recognition.

Influential figures in the industry have supported the Tezos project. Today, Tezos is considered one of the most promising blockchain projects.

Why was Tezos Developed?

How to Create Your Tezos Wallet

Tezos was developed to address certain limitations and issues encountered by other blockchains, specifically in its governance, network updates and consensus.

The main objective of Tezos is to create a flexible and scalable blockchain capable of adapting to the evolving industry needs while avoiding divisive conflicts that have hindered other projects.

One of the primary features of Tezos is its capacity to execute decentralized and automated updates. Unlike other blockchains, where updates can lead to conflicts and complexity, Tezos streamlines the process by decentralizing it, automating it and subjecting it to community consensus.

Moreover, Tezos aims to circumvent hard forks by implementing a distinct set of governance rules. These regulations enable stakeholders to vote and conveniently reach a consensus on network enhancements, preventing political deadlocks that have led to multiple hard forks in other blockchains.

Additionally, Tezos differentiates itself with its unique consensus mechanism, referred to as Liquid Proof of Stake (LPoS). Unlike other proof of stake systems, LPoS provides users with greater flexibility to transfer their stake from one node to another, thereby promoting ethical behavior among delegated nodes known as “bakers.”

How Does Tezos Work?

A Look at How Tezos Works

Tezos has many innovative features. In this section, we’ll delve into how Tezos operates, emphasizing its functionality, governance and distinctive features.

Liquid Proof of Stake (LPoS)

Tezos uses a consensus mechanism called Liquid Proof of Stake (LPoS). Unlike traditional Delegated Proof of Stake (DPoS), where token holders must vote for block producers, LPoS allows users to either participate themselves or delegate their participation to other parties.

Decentralized Governance

Tezos has introduced a system of decentralized governance where developers can propose modifications or updates to the protocol. If the proposal is approved by the community and implemented, developers are rewarded with XTZ tokens. This system allows Tezos to evolve quickly by adopting new technologies while retaining the network’s key properties.

Additionally, Tezos stands out from other blockchains by integrating the apply and score variables into the mutable state. These variables enable the ledger rules to self-manage, facilitating the evolution of the ledger while maintaining the network’s key properties.

Unique Voting Process

The governance of Tezos is based on a unique voting process that takes place over four periods of 23 days each. Bakers are responsible for proposing and voting on network changes. Proposals that receive 80% or more positive votes and pass all four stages of the voting process are implemented into the Tezos source code.

Bakers play a crucial role in the governance of the blockchain and may be rewarded for their beneficial proposals by attaching an invoice to their submission. If their proposal is implemented after passing the four stages of the voting process, the invoice specifies a specific amount to reward the baker.

Tezos Network Structure

The Tezos network includes two distinct components: the network shell and the network protocol. The shell oversees transactions, administrative operations and adjusts based on user voting while the network protocol submits proposals to the shell for review. This distinctive structure enables Tezos to adapt and evolve according to the community’s requirements.

Where to Purchase Tezos Crypto

Interest in cryptocurrencies continues to grow, and many people want to invest in this booming sector. Several exchange platforms are available to buy XTZ. Let’s explore three main options together: eToro (read review), Binance (read review), and Coinbase (read review) to determine which best suits your needs.

eToro

eToro is a well-known online trading platform suitable for beginners looking to invest in cryptocurrencies like Tezos XTZ. Its user-friendly interface and market analysis tools make it stand out along with its copy trading system that allows users to replicate the investment strategies of others, categorized by returns to aid decision-making.

For novices interested in purchasing XTZ in the form of CFDs, eToro presents an appealing option.

eToro

  • Number 1 copy trading platform
  • Integrated social network for traders
  • Trading cryptocurrency CFDs

Binance

Binance is among the top exchanges, offering a broad range of trading pairs, competitive fees and a user-friendly interface. With substantial liquidity and strengthened security, it is a robust choice for purchasing XTZ. Users can utilize advanced trading features, including limit orders and margins.

Binance

  • Low fees
  • One of the largest crypto exchanges
  • Fee discount for using native BNB

Coinbase

Coinbase is a reputed crypto exchange for buying, selling and trading XTZ. Upon registration, users can convert their fiat currency into cryptocurrency, such as Bitcoin or Ethereum, and then exchange it for XTZ.

Coinbase is known for its user-friendly interface and enhanced security, including advanced protection measures such as two-factor authentication (2FA), offline storage of digital assets and fraud detection systems. Additionally, Coinbase offers a wide range of cryptocurrencies, enabling investors to diversify their portfolio.

When purchasing XTZ, consider eToro, Binance and Coinbase as three reliable and solid cryptocurrency exchange platforms. Depending on whether you are a novice or experienced investor, consider their specific features and advantages to determine which platform best suits your needs and preferences for investing in Tezos cryptocurrency.

Binance

  • Low fees
  • One of the largest crypto exchanges
  • Fee discount for using native BNB

Tezos Fear and Greed Index

Updated:: 22 February 2024

Now: 74 Greed

Now: 74 Greed

Yesterday: 69 Greed

Last Week: 79 Extreme Greed

Is Tezos a Good Investment?

Is Tezos a Good Investment

Tezos shows potential for the future, giving its strong community and unique consensus mechanism, which may contribute to a rise in XTZ value over time. However, like all cryptocurrency investments, there are inherent risks and uncertainties. Historical fluctuations in the price of Tezos make Tezos’ future difficult to predict. 

It is crucial to weigh the pros and cons of investing in Tezos before making a decision.

Advantages and Disadvantages of Tezos

  • Decentralized governance and scalability
  • Unique consensus mechanism, providing security and decentralization
  • Strong and dedicated community, actively supporting the project’s development and growth
  • Potential use by leading companies, such as Société Générale (SocGen)
  • Support for Tezos staking by popular platforms like Binance (see review) and Coinbase (see review)
  • Competition with other blockchains offering similar value propositions
  • Risk of being surpassed by new competing protocols
  • Volatility of cryptocurrency prices, making investments potentially risky.

Our Final Thoughts On Tezos

Tezos (XTZ) is an innovative cryptocurrency with substantial potential. Its protocol provides decentralized governance and the capacity to evolve seamlessly. Additionally, its community remains robust and committed.

Its unique consensus mechanism, known as “baking,” enhances security and decentralization, which may entice a growing number of users and investors.

However, competition from other blockchains with similar value propositions and new competing protocols remains a challenge for Tezos. Nevertheless, Tezos has already drawn the attention of major companies such as Société Générale and is supported by popular staking platforms like Binance and Coinbase.

Taking into account the advantages and disadvantages, however, as with any cryptocurrency investment, one must consider the associated risks and stay informed about project developments and market trends. Will Tezos go up?

Our final view on Tezos’ value is that it is a solid project with long-term growth potential. While we can’t predict the future of Tezos price in USD, the outlook seems positive. Staying informed on Tezos forecasts and market developments will be crucial for assessing its investment potential.

FAQ - Frequently Asked Questions about Tezos

What is Tezos (XTZ)?

Tezos is a decentralized blockchain platform that allows the creation of smart contracts and decentralized applications (dApps). What sets Tezos apart from other cryptocurrencies is its on-chain governance mechanism and its ability to perform automatic updates, thereby avoiding hard forks.

How does Tezos' on-chain governance work?

Tezos’ on-chain governance relies on a voting process by XTZ token holders to decide on updates and protocol changes. Bakers (network validators) are responsible for evaluating and approving submitted proposals.

What are the benefits of investing in Tezos?

Investing in Tezos has several advantages, including its decentralized governance, automatic updates, low transaction fees compared to other platforms and its increasing adoption in the tokenized securities industry.

What are the risks associated with investing in XTZ?

Investing in XTZ carries risks, including competition from other blockchains with similar value propositions, being surpassed by new competing protocols, and the high volatility inherent in cryptocurrencies in general. It is essential to conduct thorough research on Tezos stock price fluctuations or consult a financial advisor before making any investment decision.

About the author

Joseph Minor

In seeing a digital world explode, Joseph invested his writing in the field of technology over 8 years ago. As a leading-content creator, he believes in clarity, credibility and writing topics people want to read. From blockchain to Web3.0, Joseph sees no shortage of developments as crypto pushes forward. He’s become a voice in technology that people can trust and look forward to hearing more from.