What is Tezos? Is it threat to Ethereum?

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Tezos ICO
Tezos ICO

Tezos is a new block network, a decentralized system of “smart contracts,” which will be launched a few months after the ICO. The Tezos fund, registered in Switzerland, started crowdsale for the development of the same-named block-platform from July 1. Only in five days 53,108 bitcoins, or $ 137.4 million, were collected. Add 270,958 ethers, or $ 71.2 million to that. The sum is $ 208.6 million. ICO Tezos already surpassed the amount of funds raised by the largest crowdsale – Bancor ($ 153 million). It competes with EOS (exceeded $ 185 million).

Largest ICO ever

Tezos ICO
Tezos ICO

“Initial coin offering” (ICO) that raised above mentioned enormous sum of money is somewhat similar to Kickstarter. However, it’s only for people who have interest in crypto currency. Investors fund the idea of software and then they have access to that software. Afterwards, in case this new tech architecture succeeds, its token will rise in value. Hence, the profit for investors. Also, other people will try to climb the same pathway via buying new tokens. Do you know first ICO? It was in 2013 with Mastercoin. Ethereum raised money in 2014. However, nowadays ICOs are much more popular. Unsurprisingly, Tezos wants to achieve the same

Throughout the Tezos crowdsale, buyers could get 5000 “tezzies” (5000 XTZ) for one bitcoin plus a bonus, which depends on the time of deposit. The maximum bonus was 20%, it was reduced to 0% by the end of the placement. That is, those who bought “tezzies” at the very beginning could get 6,000 tokens per bitcoin.

Crowdsale ended on July 12 with historical record. Tezos acquired 65, 627 BTC (worth approximately 156 million at current prices) and 361, 122 ETH (about $76m). 2,000 transaction blocks of bitcoin network made it during the process.

New digital commonwealth of Tezos

Tezos Coin
Tezos Coin

Tezos calls itself “a new digital commonwealth” – somewhat like a digital community. The platform aspires to be an alternative to Ethereum network protocol of secure smart contracts. This new platform can avoid technological and political problems that its predecessors Bitcoin and Ethereum had. The fact is that Tezos can update the whole protocol of decentralized circuits without hard fork. The code will be updated automatically. This way of protocol change is totally new.

According to Co-founder of Tezos project Kathleen Brightman, it has its own language of smart contracts – Michelson. It is designed to facilitate formal verification. A formal check is a process that mathematically guarantees the correctness of certain aspects of computer code. In particular, we see it in the aerospace industry, where the cost of error is particularly high.

Differences of Tezos

Tezos Network
Tezos Network

If Tezos developers want to make changes to the code, they will have to pay. Usually, hard forks are undesirable, as they lead to conflict within the network community. They increase the volatility of the crypto currency. For example, Ethereum produced hard fork two times. The first, the most serious, after the DAO Ethereum lost about $ 60 million. In the end, two Ethereum blockchains appeared with two coins – Ethereum and Ethereum Classic (a community that did not agree with the cancellation of ICO DAO Ethereum – announced by the team of Ethereum developers led by Vitalik Buterin). Today within this community hard factors lead to sharp jumps in the currency, which is bad for the calculations. That’s why the creators of the Tezos code would like to avoid the hard fork.

The second significant difference between Tezos and Bitcoin is the consensus algorithm. In the case of Tezos, it uses DPoS (delegated proof of stake consensus). In DPoS not all the block manufacturers are responsible for verifying transactions. Token holders have the right to participate in verification. This will give a higher transaction speed. EOS blockchain uses the same system of consensus. However, he difference is the security of transactions, which Ethereum cannot provide yet. Hence Its name – “blockchain 3.0” because of all these improvements.

Tezos dramatically differs from other projects that began with crowdsale of an idea or unfinished product. The developing of this project began in 2014. All-in-all, Tezos will probably begin its functional cycle in Autumn, according to its developers.

Creators of the crypto-wonder

Finally, let’s say two more words about creators. The founders of the project Tezos – the couple Arthur and Kathleen Breitman. Arthur worked as a vice president at Goldman Sachs and an assistant in Morgan Stanley, Kathleen in The Wall Street Journal, Accenture and R3. R3 is an association of the world’s largest banks and fine-tech companies working to create their own detachment. Unsurprisingly, future spouses met at the crypto-anarchist meet-up in New York in 2010. Among the consultants of the Tezos project is the founder and CEO of Zcash – Zooko Wilcox. The development team’s main quarters are in Paris. The team is working on Tezos in partnership with OCamlPro. From September 2016 to March 2017, the company raised $ 612,000. It still continues strong.

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