What is Tezos (XTZ)?

Tezos (XTZ) is a self-upgradeable blockchain that offers smart contract capabilities (just like Ethereum). While it’s also a decentralized network, like Bitcoin and Ethereum, this blockchain functions with a different network governance system.

The governance system allows users to vote on changes and protocol upgrades they want to implement on the network. After which, the blockchain would automatically update itself to implement those changes. This governance system dramatically reduces the chance of a hard fork (a blockchain split) occurring among users further down the line.

The native token for the blockchain network is the Tez or XTZ. This virtual coin allows its owners to trade on this blockchain and vote on blockchain changes.

Who Created Tezos (XTZ)?

The founders of Tezos are Arthur Breitman and his wife, Kathleen Breitman. Arthur is a former Google X engineer and an analyst at Morgan Stanley and Goldman Sachs. And Kathleen is a former R3, Wall Street Journal, and Bridgewater Associates employee.

The project began when Arthur published a whitepaper on this blockchain in 2014. An initial coin offering later got organized for the blockchain in 2017 with the help of Johann Gevers. This allowed Tezos to end up with 66,000 Bitcoins or, as it was valued at the time, $232 million.

How Does Tezos (XTZ) Work?

Tezos (XTZ) uses a liquid proof-of-stake algorithm, which is slightly different from the classic proof-of-stake algorithm that’s on Ethereum. Just like regular proof-of-stake, individuals that want to participate in the blockchain voting process can stake their funds. This process is called baking, and becoming a baker requires a stake of at least 8000 XTZ.

A roll costs 8000 XTZ and entitles investors to run a network node. From this point, they can receive compensation for approving blockchain transactions.

The platform also allows its users to allocate their funds to others, making them bake on their behalf. The owners of the tokens and the bakers each earn a cut from the corresponding commission.

Is Tezos (XTZ) a Good Investment?

This network had a rocky start in the beginning as there was a power struggle between Johann Gevers and the Breitman couple. This delayed the Tezos (XTZ) tokens that should have been issued after the Initial Coin Offerings (ICO). It reached the point that investors had to agree to an Anti-Money-Laundering verification and a Know-Your-Customer verification in 2018.

Many ICO investors then decided to withdraw their funds because of this. This forced the platform to settle with them in court and agree to a $25 million class action lawsuit.

Tezos (XTZ) is a cryptocurrency that uses an informal governance model. They created this governance model to prevent the hard forks many blockchains face down the line. Its method of digital coin creation is also purported to use less energy than regular Bitcoin mining.

All these characteristics make for a rather exciting blockchain that people are starting to appreciate. Although it has yet to display all its potential, Tezos is already off to a good start. Its environmentally friendly mining model and smart contract capability make it a worthwhile investment. Tezos is available on many cryptocurrency exchanges, such as Coinbase, Binance, and Gemini. Crypto investors can store Tezos on the Coinbase online wallet or in a hardware option like the Ledger Nano X.