What is Tezos (XTZ)?

Tezos is a blockchain network similar to Ethereum, but with a crucial difference – it offers more advanced infrastructure that can evolve and improve over time without the need for hard forks, unlike Bitcoin and Ethereum. Tezos allows holders of its native token, XTZ, to vote on proposed protocol upgrades presented by Tezos developers.

Being an open-source platform, Tezos prides itself on being secure, upgradable, and built for long-term sustainability. It uses a smart contract language that ensures accuracy for high-value applications. The platform's unique approach makes it future-proof and adaptable to embrace future advancements in blockchain technology. Tezos was initially proposed in a white paper in September 2014 but experienced delays before its mainnet launch four years later.

Who is the founder of Tezos?

Arthur Breitman, under the pen name L. M. Goodman, authored the Tezos white paper. He identified a significant flaw in Bitcoin's design, which was the absence of a governance process that allowed community contributions and the inability to issue new tokens on the blockchain.

To address these issues, Arthur and his wife Kathleen established a startup called Dynamic Ledger Solutions. The company was responsible for developing the code that would serve as the foundation for the Tezos protocol. Eventually, the Tezos Foundation acquired Dynamic Ledger Solutions to ensure complete ownership of the network's intellectual property rights.

What makes Tezos unique?

Tezos has a distinctive approach to staking and governance that sets it apart from other blockchains. In Tezos, participants can engage in the network's governance process by becoming "bakers," which involves staking 8,000 XTZ. Bakers are responsible for voting on proposed changes to the blockchain's code through a four-step procedure that spans approximately 23 days. Proposals that garner strong support from the majority of participants undergo a 48-hour testing phase on a testnet and are fully implemented if they receive super-majority backing.

What makes Tezos even more unique is its adoption by prominent businesses. For instance, the French banking giant Societe Generale announced plans to use Tezos for experimenting with a central bank digital currency. Additionally, major cryptocurrency exchanges like Binance and Coinbase offer support for Tezos staking, enabling users to earn rewards based on the amount of XTZ they hold, a feature not commonly found in many other digital assets. Tezos' combination of innovative governance, staking incentives, and adoption by notable institutions contribute to its distinctiveness in the blockchain space.

Explain the network security of Tezos.

• Proof of Stake (PoS) Consensus: Tezos uses a PoS consensus mechanism to secure its network. In PoS, validators (also known as "bakers" in Tezos) are chosen to create new blocks and validate transactions based on the number of tokens they have staked (in this case, 8,000 XTZ). This system incentivizes participants to act honestly and in the best interest of the network, as their staked tokens serve as collateral and can be forfeited if they behave maliciously.

• Baking and Endorsement: In Tezos, block creation, and transaction validation are divided into two roles: bakers and endorsers. Bakers create new blocks, while endorsers validate and endorse blocks created by other bakers. Bakers are responsible for ensuring that the blocks they produce are valid, and endorsers help to reinforce the validity of the blocks. This division of responsibilities enhances security and prevents centralization.

• Liquid Proof of Stake (LPoS): Tezos uses a variant of PoS called LPoS, which allows token holders who do not have the technical expertise or resources to run a baker node themselves to delegate their staked XTZ to a trusted baker. This delegation process ensures that the network remains.

What are the recent developments of Tezos?

On June 24, 2023, the Tezos blockchain achieved a significant milestone by successfully activating its 14th protocol upgrade, Nairobi. This upgrade brought several important enhancements and updates to the Tezos network, aimed at improving its overall performance and user experience.

One of the key improvements introduced in the Nairobi upgrade was the significant increase in transaction speed, making the Tezos blockchain up to eight times faster. This enhancement allows for quicker and more efficient processing of transactions on the network, enhancing its scalability.

Another notable change introduced by the Nairobi upgrade was the implementation of a new fee mechanism. Unlike the previous flat fee structure, this new model charges users based on their network usage, providing a more flexible and fair fee system that can adapt to varying transaction requirements.

The upgrade also included an improved gas model for signatures and certain manager operations, such as tez transfers and smart contract calls. This optimization helps to streamline gas usage and increase the efficiency of these operations on the Tezos blockchain.

Furthermore, Nairobi enabled the upgrade of Tezos' Smart Rollups, a scaling tool that facilitates even faster network usage. With this enhancement, Smart Rollups can be continuously and automatically upgraded as newer improvements are deployed on the Tezos network in the future, ensuring the platform remains at the forefront of scaling and performance.

The successful activation of the Nairobi upgrade reflects the strength and unity of the Tezos community and reinforces Tezos' position as a leading blockchain platform in terms of scaling and performance capabilities. These updates contribute to the ongoing development and improvement of the Tezos blockchain, ultimately providing users with an enhanced and more efficient experience.

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