Tezos is on a roll right now. The crypto-currency launched in 2017, frequently referred to as the “Ethereum killer,” keeps getting recommended by financial experts around the world. Better performing and cheaper than Ethereum, Tezos is slowly climbing the cryptocurrency ladder in terms of market capitalization. We can already read in the economic and financial press that Tezos will be the next Bitcoin, which is reason to take a closer look at this much-complimented crypto-currency.
Introducing Tezos, a cryptocurrency with a very promising future
Tezos was founded by Arthur and Kathleen Breitman. The Tezos memorandum and white paper were published in 2014, but the cryptocurrency was not truly launched until 2017. Tezos is an altcoin. It primarily enables the creation and execution of smart contracts. Its software platform is open-source and its cryptocurrency is XTZ.
Its protocol is based on three successive layers:
- First, a network protocol
- Second, a transaction protocol
- And third, a consensus protocol
Tezos is very similar to Ethereum in its functionality. However, its blockchain is much less power hungry than its predecessors, Ethereum and Bitcoin. Tezos also offers a real asset that is unique to it: its “internal adaptability mechanism”. This mechanism certainly gives it the most decentralized governance of all current blockchains.
Tezos and its revolutionary system avoiding “hard forks”
What makes Tezos absolutely unique is that the platform will probably never perform a “hard fork” thanks to its “internal adaptability mechanism”. Hard forks are inevitable for traditional blockchains. They consist in a modification of the consensus rules adopted by the blockchain. This modification is not backward compatible. Hard forks are used to upgrade the system. They consist in the creation of a new, more efficient chain, while the old one dies. Some hard forks are also used in case of disputes, on consensus changes, within the team. In this case, both blockchains survive and this gives rise to a new cryptocurrency inherited from the first.
Hard forks can be repelled by making “soft forks” which are, in turn, backwards compatible. However, soft forks allow only limited modifications. Some crypto platforms also implement “side chains” to meet their needs. Despite everything, these two solutions remain provisional and most blockchains end up performing a hard fork.
To avoid hard fork, Tezos developers have built a modification process within its blockchain. Tezos has an interface on which it is possible to propose, select and test updates. The final adoption of these updates is then voted by all the actors of the platform. This process is absolutely revolutionary because it avoids the hard fork. Everything happens within the Tezos system and not outside its blockchain. These developers have named this feature an “internal adaptability mechanism”.
Tezos, the “Ethereum killer”
Tezos is regularly described as the “Ethereum killer”. Indeed, Tezos has all the features of Ethereum and has nothing to be jealous of. In addition to setting up smart contracts, Tezos also allows the creation of NFTs, for example. These NFTs are non-fungible and therefore unique cryptocurrency tokens. This ensures that they are much more valuable than traditional, fungible tokens. NFTs are extremely sought after right now, yet not all platforms allow for their creation.
Tezos has the same functionalities as Ethereum, but its network is much more durable thanks to its “internal adaptability mechanism”. Ethereum cannot escape hard forks, unlike Tezos. These hard forks, in addition to being a heavy and complex process, lead to the splitting of cryptocurrencies and thus their loss of value.
Today, the value of Tezos and Ethereum is largely based on the adoption and use of cryptocurrencies. Bitcoin often serves as a bellwether, and when its price rises, all cryptocurrency prices follow it in its trend. But, as crypto-currencies become more democratic, their functional value will become more important in the market. Moreover, unlike Bitcoin, which is limited and whose value is therefore based on scarcity, Tezos and Ethereum are renewed every year. These crypto-currencies are therefore not rare. As a result, their price already depends largely on the usefulness of their protoco
Investors will certainly prefer to bet on a Tezos, capable of renewing itself without fork, rather than on an Ethereum which does not have this feature. Moreover, its internal adaptability process, based on the vote of all the players of the platform, makes it a truly decentralized platform, one of the major goals of cryptocurrencies.
The future of the Ethereum giant is likely to be considerably clouded soon, when the public will realize that for much less money they can invest in Tezos, a much more powerful Ethereum.
Tezos price on the rise
Today, the price of Tezos’ XTZ is at $4.238. Its peak value was $5, back in May 2018. This ranks Tezos as the 36th largest cryptocurrency currently, with a total market capitalization of $3,250,510,000.
On the prediction side, specialists are betting on a meteoric rise in the price of Tezos’ XTZ. It could, according to them, reach prices similar to those of Ethereum. Its price has already risen 204.38% in one year. Its “internal adaptability mechanism,” which ensures it has a longer lifespan than the giants Bitcoin and Ethereum, for example, explains this score. Major banking institutions are already interested in Tezos. The Bank of France has committed to this platform. The same goes for BTG Pactual, a Brazilian investment bank, now the largest bank in the sector in Latin America. This mechanism seems to make Tezos the most valuable altcoin to date for some specialists.
While Ethereum’s price is at $1,804.49, meanwhile, it may be a good idea to start investing in Tezos, which promises to supplant its rival in the long run.