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What is Tezos? The truth behind the infamous ICO

What is tezos

Tezos is known as a self-amending blockchain decentralized platform for building Dapps. Tezos came into the crypto industry with a boom by breaking its then-record of ICO by collecting $232 million, according to our Market Intelligence Platform

Since their ICO, Tezos lost its support from the community as it was hit by two continuous lawsuits. This controversy led to the delay of their launch date, however with the drama and fighting back over the past two years they came out of the darkness and was officially launched in September 2018.

More than a year later, ICOs have lost significant rally amongst members of the crypto community with their numbers depreciating by over 93% YOY, according to Blockchain and Crypto report: July 2019. The major reason being increased regulatory pressure and dwindling investor interest.

What is tezos

Blockchain and Crypto report: July 2019
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But despite their dwindling numbers, ICO projects is still a viable fundraising mechanism for many entrepreneurs. For example, as much as $280 million was raised by startups through tokenized fundraising or crowdsourcing during July 2019. A staggering figure! As much as 37% of these funds or approximately a $100 million was raised through the Initial COin Offering (ICO) model.

what is tezos

Blockchain and Crypto report: July 2019

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A slightly modified form of ICOs, dubbed IEOs, is the most successful fundraising model during July 2019, having raised a whopping $148 million and accounting for as much as 53% of the total funds raised.

What is Tezos: Background of the project

Tezos a decentralized blockchain that governs and is self-amending itself by establishing a true digital commonwealth. What is the commonwealth in this context? It is a group that wants to be linked together because of their common goals and objectives. The main goal of Tezos is to make sure that their Token holders work together and make decisions so that their protocol improves over time. XTZ is the native token of Tezos.

The prime founders, Arthur Breitman, and Kathleen Breitman, a husband-wife team have been creating Tezos since 2014 with a core group of developers. The organization is headquartered in Switzerland. As we have just stated, they brought a $232 million up in an uncapped ICO in only 2 weeks, accepting contributions of both bitcoin and ether. Not long after their noteworthy ICO, Tezos ran directly into a ton of the executive’s issues.

To comprehend these administration issues, you should realize that the Tezos-founding is named DLS (Dynamic Ledger Solutions) and the organization that holds every one of the funds collected during the ICO is named “Tezos Foundation.”

Arthur and Kathleen Breitman who are a husband-wife team got into a public squabble with the President of Tezos Foundation, Johann Gevers. Evidently, Gevers, who was responsible for the funds, would not dispense the funds to the Breitmans. This question led to mayhem inside the network and the exchange rate plummeted. The Breitmans released a blistering articulation on Gevers which included words like “self-giving, self-advancement, and conflicts of interest”. In the end, after a great deal of dramatization and unfortunate media attention, Gevers left the organization subsequent to accepting more than $400,000 in severance. Presently things are at long last cruising easily.

What is Tezos: Its Architecture

The Tezos blockchain utilizes an agonistic native-middleware called ‘Network Shell.” This enables them to build up a modular style with a self-amending record. A conventional blockchain protocol is divided into three layers:

· Network Protocol: This is the gossip convention which is in charge of peer listening and broadcasting between hubs.

· Transaction Protocol: This is the value-based layer which characterized the accounting model that is implemented by the blockchain.

· Consensus Protocol: Pretty plain as day. This characterizes the consensus protocol that will help our blockchain achieve concessions on the state of our exchanges.

In Tezos, the last two conventions, Transaction and Consensus, are joined together to be alluded to as Blockchain Protocol. The Network Shell helps in the correspondence between the network protocol and the blockchain protocol. The system shell is agnostic to the transaction protocol and the consensus protocol.

What is Tezos: Accounts of Tezos

There are two types of accounts that you can use in Tezos and they are as follows:

· Implicit Accounts: These are pretty simple accounts and the most common accounts in Tezos. They simply generate public/private keys. The public address is the public key that is shared to everyone so that you can receive tokens and each and every account has its own private key that should not be shared with anyone. These accounts have an owner and have account balances based on their transactions.

· Originated Accounts: With implicit accounts, there are originated accounts for your smart contracts. These originated accounts have the following fields:

· Delegatable: If the account’s funds can be delegated funds for banking

· Delegated fields: Information on who the account has. Delegated for. Banking

· Amount: Amount in the. account

· Manager: The private key of the account

Tezos has some unique capabilities such as:

· The liquid proof-of state mechanism

· Governance and self-amending

· Smart contract with formal verification

What is Tezos: Liquid Proof of Stake

Not at all like DPoS (Delegated proof of stake), there is no firm principle that delegates totally should be chosen. It is totally up to the member regarding what they need to do. Okay, so let’s begin with the LPoS.

Tezos is a liquid proof of stake framework that expects one to stake a specific number of Tezos token to partake in the consensus over the blockchain. The way toward staking Tezos tokens (XTZ) is called baking. Token holders are otherwise known as “bakers” who can delegate their validation rights to other token holders without transferring ownership.

The consensus mechanism is the essence of a decentralized system. There is no point in connecting numerous nodes over a wide zone to organize if there were no concrete methods for them to communicate with each other and come to a choice. At the point when Satoshi Nakamoto made Bitcoin, he coordinated the proof-of-work mechanism in it. The possibility of the POW instrument is truly basic:

· Have the miners utilize their computational capacity to tackle cryptographically hard puzzles.

· Reward the miners who solve those riddles.

It is as straightforward as that. These riddles are difficult to such an extent that it more often takes up a lot of your computational power. While POW was certainly powerful when it began, it has a ton of issues:

· Above everything, proof-of-work is an amazingly inefficient procedure on account of the sheer amount of intensity and energy that it eats up.

· Individuals and associations that can bear the cost of quicker and all the more powerful ASICs ordinarily have a superior shot in mining than the others.

· POW prompts centralization.

To counter the issues of POW, another consensus protocol called “Proof of Stake” or POS was made.

Proof-of-Stake

Proof-of-Stake is a mechanism that will make the whole mining procedure virtual and replace miners with validators. This procedure is done by making the validators lock-up some of their coins, then they are made to validate the blocks where they have to check for block, see if they can be added to the chain and then place a bet on it. If the block. By any chance gets affixed then validators will get rewarded.

This whole procedure sometimes can be an issue because it included the entire community and may not necessarily be a versatile method. Due to this, blockchains like EOS, Neo, etc. are created using a delegated protocol. Delegated proof-of-stake is a protocol in which some fixed amount of delegates get elected before. These delegates are the ones in charge of the consensus and general network well-being.

Tezos’ mechanism system is like this yet with a little distinction. Rather than the hardcore delegation, Tezos uses a liquid democracy model to its consensus.

Liquid Democracy Work

It is a framework that fluidly changes between direct democracy and representative democracy.

The procedure has the accompanying highlights:

· Individuals can decide on their policies directly.

· Individuals can delegate their casting a ballot duty to a delegate who can vote on their policies for them.

· The delegates themselves can delegate their casting a ballot duty to another delegate who can decide for their benefit. This property wherein a responsibility can select their own delegate is called transitivity.

· On the off chance that an individual, who has delegated their voting doesn’t like the vote that their representatives have picked, at that point they can just reclaim their vote and decide on the policy themselves.

Baking Blocks

Baking is a procedure where you find and add blocks to Tenos blockchain and this is the way it works;

· Bakers get block publishing rights dependent on their stake.

· Each block is baked by random baker and after that legally approved by 32 other random bakers.

· On the off chance that the success is good to go, at that point, the block gets added to the blockchain.

· The successful baker gets a square reward and can charge transaction fees for every one of the transactions inside the block.

Token holders have the choice of delegating their baking rights to different holders without giving up the ownership of their tokens. Upon the finish of the baking procedure, the baker will share their rewards to the other of the delegates.

What is Tezos: Governance and Self-Amending

There is a need for understanding the word fork in the crypto community before getting into on-chain governance and self-amending. A fork is nothing but a condition in which the state of the blockchain divides into chains in which a part of the network has an alternative point of view on the history of transactions than a different part of the network. A. fork can be accomplished by hard fork and soft fork.

· Soft Fork: At whatever point a chain should be updated and there are two different ways of doing that a soft fork or a hard fork. A soft fork is like an update on the product which is backward compatible. In any case, having said that there is a distinction. Every one of the updates that you can enjoy the update to the latest version won’t be obvious to you in the older version.

· Hard Fork: The essential contrast between a soft fork and a hard fork is that it is not backward compatible. When it is used there is definitely no returning at all. On the off chance that you don’t join the upgraded version of the blockchain, at that point, you don’t gain admittance to any of the new updates or connect with clients of the new framework at all. Think iOS 7 and iOS 8. updates. You can’t use iOS 7 applications on iOS 8 and you can’t use iOS 8 apps on iOS 7 updates.

How Does Tezos Mitigate This?

How Tezos mitigates contentious hard forks is by self-amendments and on-chain governance. How self-amendments helps via upgrading the blockchain without going through a hard fork. Whereas, voting on the platform over a proposed. The amendment is simply on-chain governance. By combining the on-chain governance and self-amendment, the voting process can be altered. The voting is taken care of by the stakeholders of the system. The structure of this framework considers the smooth development of the blockchain instead of having to hard fork. Let’s look at it’s working:

· Developers submit recommendations for protocol upgrades and request payment for their work.

· The request for remuneration ensures that the developers have a solid economic incentive to contribute to the environment.

· The proposition goes through a testing period wherein the network tests the protocol and criticizes it for possible improvements.

· After continuous testing, the Tezos token holders would then be able to decide on whether the proposal ought to be approved or not.

· When a genuine update is settled on, a “hot swap” happens on the protocol, which initiates the new form of the protocol.

This ensures whatever improvement happens has the stamp of approval from most of the network. This prevents any opportunity of a community diversion hard fork.

What is Tezos: Smart contract and Formal Verification

Tezos smart contract will be created using Michelson and coded using OCaml. These two are functional languages and belong to two families:

· Imperative programming Language: The traditional programming languages such as Java programing, C++ are all imperative language where the coder needs to put down all the steps that are required by the computer to reach the goal.

· Functional Programming Language: The second group of programming languages is Functional languages. This style of writing computer programs was made to construct a functional approach to problem-solving. This sort of methodology is called declarative programming.

So, this is what is Tezos which is an intriguing project which unfortunately got darkened by the controversy and drama. This project brings some interesting projects to the blockchain space and requires some closer analysis.

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