Do you know one of the recent smart contract platforms wants to create a self-governing blockchain as a true digital commonwealth? It is the Tezos platform.
It has been in the spotlight for the good and bad reasons. Tezos recorded over $200 million in ICO. That is on the good side. But on the other side, Tezo has gone through various problems. It has faced action lawsuits and power struggles of board members.
In all the problems it has faced, the team wants to develop a smart contract platform. In the platform, people with shared goals and interests can transact – the true purpose of the commonwealth.
The Tezos team has moved on to achieve some of the milestones like the launch of Betanet. But, with this effort what is Tezos in much detail?
Want to learn blockchain in detail? Enroll Now: Certified Enterprise Blockchain Professional (CEBP) Course
What is Tezos (XTZ): New Platform for Decentralized Applications
Tezos History
There is not much information about the genesis of Tezos. However, some reports indicate that Tezos genesis may date back to 2014. During this period only Bitcoin was operational. Ethereum was still in its infant years. Thus, the argument that if Tezos was ever built to be a competitor, then the competition was with Bitcoin.
However, due to the close nature of the platform with that of Ethereum, it is seen as the major Ethereum competitor. Ethereum smart contract is developed in Solidity. But Tezos smart contract is created in OCaml functional language.
OCaml Language
OCaml is a general programming language. The language is robust. What this means is the language is easy to debug and maintain. Also, the language is strong in matters expressiveness and safety.
Arguments have it that the language is best used in a system where a single mistake leads to great loses. Additionally, the language boasts of a wide base of development tools and libraries.
Therefore, it’s not hard to tell why Tezos chose to go for the language.
The Ethereum ‘Problems’ solved by Tezos
- Security concerns in cryptography. The use of Michelson in the Smart contracts will be the solution.
- Ethereum’s proof of work system. Tezos perceives the Ethereum proof of work as to be very costly and centralized. Tezos solves this by the delegation of the proof of stake mechanism.
- Ethereum’s transaction language. The language used by Ethereum lacks a great deal in expressiveness. Tezos uses OCaml language for transactions. The language is more expressive than others like Solidity.
- Coordination issues that make Ethereum have the inability to innovate dynamically.
By addressing these concerns, Tezos development team believe they can come up with a better blockchain platform.
Want to learn about the ethereum technology? Enroll now: The Complete Ethereum Technology Course
Tezos Smart Contracts
In Tezos, smart contacts are stateful accounts that specify an executable code. Each account or rather a contract has a manager. The manager will control the account. The manager is the account owner. The contracts have two types of keys; the public key and the private key.
Public keys will be used for signing blocks and mining block.
The smart contract will be in Michelson programming language. The language will enable developers to create smart contracts and dApps that will be resistant to third-party interference or censoring.
Let’s delve a little about this smart contract language Michelson. Ethereum uses Solidity as the Smart contract language type. Unlike Solidity, the new smart contract language exploited by Tezos is not compiled with anything. What is the implication of this?
The Tezos Virtual Machine interprets the language. It is more comparable to the EVM bytecode only with high-level constructs. These high-level constructs include; maps, lambdas, sets and contract specific operation. This, therefore, means the language makes life easier for humans as reading it is easy. The language is credited with finding solutions for challenges that arise from the use of Solidity.
Discover more scopes of smart contract applications with Smart Contract Use Cases
Tezos Proof of Stake
The platform is a peer to peer platform. Each participant has a node. The Tezos proof of stake system is a mechanism in which various nodes will come to a consensus on the state of the blockchain. Many other blockchain technologies have their PoS systems. But, unlike the other PoS mechanisms, the Tezos platform allows anyone to participate in the PoS. Anyone who takes part in the process to reach a consensus on the state of Tezos is then rewarded.
In addition to the fact that anyone can participate, the PoS mechanism in Tezos is less costly. Also, the barriers to entry are less. So, it is easily accessible.
Tezos Signing Block
Tezos employ the concept of signing blocks to curb selfish mining. What signing blocks mean is that when a block is being minted, it is assigned 16 random signing rights. The 16 stakeholders who are assigned the signing rights will observe the whole minting process and submit signatures to validate the blocks.
The signing stakeholders are then incentivized. The whole process of signing blocks is known as Tezos Baking.
Is Mining possible on Tezos?
Well, yes! The platform allows for the mining of rolls. The mining is known as baking. A stakeholder can mine a block after a minute and the next block after two minutes and the trend continues.
In cases where a client sees an opportunity to mine a high priority block, Tezos allows for security deposits. Security deposit gives you an upper hand in the mining of a high priority stake. In cases where there is a security deposit, and no mining takes place the system refunds the security deposit to the client’s wallet.
Want to know the differences between proof of work(PoW) and proof of stake(PoS) algorithms? Check Now: Comparison of PoW vs PoS
What’s a Tezos Roll?
Rolls are a group of tokens whose track is kept on the Tezos ledger. The tokens are used to select which delegates are selected to bake. The power of a delegate to bake is directly proportional to the tokens allocated to them. A roll has 10000 tokens.
What does it take to bake?
Baking is pretty straightforward work. However, there are some requirements necessary for baking.
First off, to bake you will need CPU, memory, and bandwidth. The blockchain tasks a baker with the responsibility to create the blocks they are baking. After creating the blocks, they will need to validate the blocks. This will take up considerable memory space and bandwidth. Besides, a stable and secure internet connection is necessary for the baker.
Next, they need security for the blocks they are baking. The Tezos platform offers bakers incentives for secured blocks. There are three major ways through which the bakers will secure their operations.
Firstly, preventing and mitigating intrusion which is ensuring that no remote shell can gain access to the baking process. Secondly, DDOS resistance, a way in which smart bakers will inject their blocks from more than a single IP address. Finally, for security, the baker must protect the private key.
Tezos Tokens for the Baker
For a baker to serve as a delegate for baking they must at all times have at least 8.25% of the tokens delegated to them.
The State of Delegation on Tezos
Delegation is primarily the distribution of baking rewards. The system can do the delegation automatically. What is the state of the delegation on Tezos?
There are about 33.33% active Tezos tokens. Out of this number, the blockchain delegates a huge chunk of up to 90% of the 33.33% active tokens. With this figures, one can rightfully argue that the delegation system is oversaturated and oversubscribed. The oversubscription can be attributed to;
- Optimism around the profits of the delegation
- Tezos public baking mechanism is easily accessible and has a relatively low barrier to entry
- A low exchange of the tokens as the token holders have decided to store.
Potential Developments on Tezos
As the development team continually seeks to make the platform bigger and bigger. Here are some possible developments that are cooking. And, the Tezos community should expect.
- Non-Interactive Zero-knowledge Proofs of Knowledge. This will be a great feature in keeping the transactions untraceable. However, the hurdles that must be jumped for the fruition of this NIZKPoK will be the basis on CRS models. And, lack of enough research and evidence of the success of the system in the blockchain world. The CRS model will only mean that the system has to go back to the trusted party system. As a trusted party will be providing the CRS model. A chance for third party infiltration.
- Ring signature. Well, CyptoNote developed ring signatures for privacy. Therefore, a client can spend his Tezos coins without exposing the client’s address.
Want to learn how you can apply zero-knowledge proofs in different sectors? Enroll Now: Zero Knowledge Proofs (ZKP) Masterclass Course
Tezos’ Governance
As is with most functions on the platform, Tezos has a governance structure in which the involvement of each stakeholder is key. The platform has an election cycle and a say in amendments to the protocol. This is a move to have the clients feel involved in the progress of the cryptocurrency as it seeks to develop. Also, the move allows for monitoring malicious attempts to amend the protocol.
The Tezos Self-amendment concept explained
Well, when developers perform an upgrade on a blockchain platform, the platform splits. We refer to the split process a ‘forking.’ In most cases, the community associates forking with disruption of the network, community division and change in the incentive plans of the clients.
For Tezos, the developers upgrading the system without splitting. Therefore, they eliminate problems associated with forking. Besides, the execution costs for the upgrades will be way affordable as compared to other blockchain platforms.
Tezos Betanet
The Alphanet, the test network, proved successful for over a year. In that light, Tezos Foundation saw it fit to try the real-world crypto experience. They launched the Betanet with a proposed genesis block. The genesis block has details on allocations that will be made to the foundation.
The Betanet gives the real feel of the transactions within blockchain. Community members who will be willing to engage in the experience are allowed. However, it’s important to note that the challenge that comes with the Betanet is the maintenance, adjustment, and unscheduled downtime during the said period.
Coming Soon: Cryptocurrency Fundamentals Course
Tezos ICO
The Tezos ICO is probably the most interesting in the recent history of the blockchain. Not only for the price of the coin but for the events that followed the ICO.
The ICO happened in July 2017. The ICO raised $232 million which by the time of that ICO was the largest. What followed was devastating. The Tezos founders, Kathleen and Arthur Breitman, who are husband and wife, had a disagreement with Johann Gevers head of Swiss Foundation over his position in the board. The Breitmans wanted him to resign. To refute that, the Swiss Foundation head Johann Gevers said the role of the Breitmans was unclear, and they were the cause of the Tezos launch. This became a subject of an over 7 month’s court case. The tussles consequently led to a delay in the product launch.
Earlier 2018 though, the Swiss Foundation head resigned. In a tweet after his resignation, he cited that his departure was to pave the way for the launch. And, it was for the sake of the project.
Whether the resignation was voluntary on not is unclear. What is clear though is the fact that there have been reshuffles of the foundation and the board. And the course is now much underway even with the holdup.
Tezos Know Your Customer/Anti-Money Laundering (KYC/AML)
In the recent news, the Tezos foundation announced a KYC/AML implementation. In a move that sounds unpopular. People see the move as adding to the complexity. However, the step convinced the foundation that the developers did not take the step to complicate life for customers. Nor is the move a move to undermine privacy. But a move to comply with the fast-paced regulatory landscape evolution.
The disagreement between the members of the community and the foundation on this matter is a challenge. The community presents the challenge as a house divided kind of way. What this means is, there is a challenge of putting everyone on the same page. Although, with the democracy in the platform it would be exciting to see how this goes.
Tezos Grant Making Process
In a bid to incentivize developers in the platform, the Tezos Foundation announced a grant-making process. The process will sometimes launch in August this year. The grants will target three areas;
- Study and research that aims at improving the Tezos platform and associated technologies
- Support for the creation of new tools and applications for the Tezos ecosystem
- Efforts to strengthen and nurture the burgeoning Tezos community
Any developer with the skill and knowledge has the chance to showcase this to the foundation and make money while at it. This is a great way to engage the community members while improving the platform.
Here’s is a List Of Blockchain Definitions to understand Blockchain terminology!
Tezos Coins: XTZ
The Tezos coin the XTZ, also known as the tezzies is the official coin of the currency. There is a total of 763,306,930 XTZ coins as the total supply. Of the total 607,489,041 XTZ are in circulation. This translates to a $1,401,829,561 USD market caps.
At genesis block, the price is at $0.37 the price will, however, express a bullish trend and will see a 100-fold rise in a matter of time. With the size of the ICO then the growth is very much achievable.
Service on the Tezos platform
On the Tezos platform, there are four services; the node, the baker, the client and the evil client services. Let us explore each service.
The Tezos node is the main program. The node connects to the network, validates transactions and connects to the global public ledger.
The Tezos platform uses the term client for the wallet. The wallet handles contract addresses.
The baker monitors the network and creates blocks. An evil client is an integration test tool. The tool tries to trick the node for the node to identify the fake data or large amounts of data.
Tezos Node in Detail
As clearly highlighted above, the node is the main program. We dissect the node in details
The node has the peer to peer layer, the context database, and the network shell.
The Peer-peer layer
The peer-peer is the most superficial component of the node. This peer layer whispers to the node. The peer to peer layer has the following additional features.
- Each peer layer comes with a private key. The peer layer equips the key with a stamp of the proof of stake. The implication of this feature is if a peer in the community wants to open a new identity within the platform they will incur a minimal cost.
- Tezos platform regularly exchanges known good peers. This exchange is a strategy to achieve the best connectivity within the platform.
- The peer layer monitors and scores peers. The platform places the misbehaving peers on the greylist or blacklist. And well-behaved peers can earn a place at the whitelist.
- The peer-peer layer ensures that all the communication between the nodes is authentic and encrypted for safety, security, and reliability.
The Context Database
This component of the node stores the data. The data stored here is related to the state of the ledger. The Tezos platform uses Irmin as the backend. Irmin ensures a functional, view of the storage, and it encodes the state of the ledger. The hash tree form explains the state of the ledger which eases the straightforward verification for clients.
Tezos occasionally run scalability tests on Irmin to check its performance on large-scale transactions. Also, in the database is the blocks and operations.
Network Shell
Between the network and the protocol lies the interface. The interface is the network shell. It plays a vital role in the platform. The network shell takes over the blocks sent by the peers and validates it against the current protocol. The network shell is arguably the most delicate part of the node. The delicate nature is not in the security sense but rather the ability to get it right. However, the Tezos foundation is continually looking for ways to get it right.
Want to become a certified blockchain security expert? Enroll Now: Certified Blockchain Security Expert (CBSE)
What is Tezos` RoadMap
The Tezos Foundation has been at fault for not laying a clear roadmap. However, it is not hard to speculate that the roadmap will involve hugely the movement from Betanet to Mainnet.
Moving from the test Alphabet to the Betanet was a major milestone. But, the Mainnet has to be the ultimate. For now, members of the community must be on the lookout for any surprise announcement like it was with the launch.
The Challenges Faced by Tezos
The crypto world is not an easy hack. There needs to be mettle and will to keep going. Thus far some challenges have hit Tezos.
The first has to be the delay between the ICO in July and the launch date. The in fights between the members of the Tezos foundation took a toll on the milestones that would have been. However, since then there has been a solution regarding the foundation situation, and everything seems to be back on track.
Lawsuits are the second challenge. Tezos has had two high profile lawsuits against it by the US government. Taking so much time in court fighting the lawsuits. The project team would have used the valuable time to ensure the development of the project.
The third challenge for community members is the surprise timelines. The developers have no clear timelines set for the milestones. All the milestones accomplished thus far were all achieved without clear timelines.
Final Thoughts
There may be challenges faced by the blockchain. However, the team is making significant strides to achieve the title the last coin standing as the mission of the project.
The Tezos foundation acknowledges that they face competition from more established currencies like Ethereum. With this competition in mind, they are always doing the very best to ensure that the crypto stands out. The grant-making process is only but a way to highlight commitment to the course and its development.
The team has still so much to do for the crypto to take its place. But, there are deliberate efforts to make the technology grow.
Join our annual/monthly membership program and get unlimited access to 20+ professional courses and 50+ on-demand webinars.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!
