Understanding XTZ Tokens with Tezos Fundraiser

The development of Tezos is associated with a problem that Arthur saw with other cryptocurrencies like BTC or ETH. These digital currencies lacked the ability to evolve on their own, which was a clear indication of some prominent problems if put to regular usage. 

As a result, we noticed the evolution of a futuristic blockchain protocol that was much more advanced than several popular blockchains lurking in the world of crypto. We are attempting to give our readers a glimpse of XTZ blockchain and Tezos fundraiser wallets and helping them understand the technology in a much better manner. 

XTZ – The Development Stage

As talked about above, Tezos was an outcome of the problem that Arthur saw in Bitcoin and thus, these NYU graduates soon launched an Initial Coin Offering (ICO) in 2017. The idea was successful in compelling the people to invest in this futuristic blockchain protocol, raising nearly USD 232 million 

In July 2018, the world witnessed the beta version of this robust blockchain network. The members of the team that led to the development of this blockchain have worked for Google, Waymo, R3 CEV, etc, and are comprised of numerous renowned names like Olaf CarlsonWee, Tim Draper, etc. 

Tezos (XTZ) – The Definition 

 If you were to describe Tezos, what will your answer be? A futuristic blockchain? A means of payment? An investment option? Well, nobody’s asking you anything, instead, we’ll be describing XTZ for you in this section. 

XTZ or Tezos can be defined as the native digital currency under the Tezos blockchain. Unlike Bitcoin or any other cryptocurrency, Tezos can’t be mined, rather, the miners need a different process known as Proof-of-Stake. 

Tezos fundraiser wallets allow the users to store their Tezos tokens in the safest manner and trade or use them whenever they require. Besides, it is also compatible with hardware wallets like Ledger Nano S, making it one of the most multi-faceted XTZ wallets in the industry. 

What All Can You Do If You Own Tezos?

Tezos is genuinely one of the most versatile blockchains ever existed in the crypto world. They facilitate the users to trade, invest, and transact these tokens wherever and whenever they want. 

The most appreciable part that makes XTZ a great option to invest in is its functioning. Tezos operate through smart contracts, which is similar to that used by the ETH blockchain. As a result, we can notice that this blockchain has been successful in offering superb compatibility with applications to provide users an incredible experience. 

The applications designed to operate on the Tezos network function of formal governance for making them extremely reliable. Besides, they have also been emphasizing security concerning smart contracts to provide an experience like never before. This includes the following:

  • Digital money
  • Real estate (tokenized)
  • Digital collectibles 
  • Swaps 
  • Loans 
  • Other financial contracts 

Choosing the Tezos network for the contracts is genuinely a smart move as the blockchain has the ability to use smart contract language to extend enhanced responsiveness and security. 

Working of Tezos (Stages of Working of XTZ Blockchain Protocol)

Most of our readers might have some idea of how Tezos work i.e. through Proof-of-Stake, where token holders are rewarded for their participation in the development mechanism. But this is not as simple as it meets the eyes. 

We have segregated the process of the PoS consensus algorithm into 3 stages for helping you understand the mechanism in a much clearer way. Here is all you need. 

  1. Creation of block (or baking) 

Blocks are the foundational structure of any blockchain and undoubtedly, they own the secrets for a blockchain to prosper. In the XTZ blockchain, we call the blockchain creators “bakers” as they help in developing more blocks. 

Role of bakers 

The role of bakers in the Tezos blockchain revolves around the following: 

  • Initiating computing abilities to the network of blocks
  • Bakers also help in validating the transactions on the network.    

What do bakers get in return? 

Bakers get rewarded for their participation in block creation. This reward is in the form of newly-baked Tezos tokens i.e. 16 Tezos/block.   

Are there any investments for baking Tezos? 

Bakers need to keep 512 XTZ as a security deposit, which is locked for 5 cycles i.e. 14 days. They may take their deposit back if they double bake.    

Requirements to become a baker 

A baker is required to own 1 roll of XTZ i.e. 10,000 Tezos. Besides, a baker with more rolls has higher chances of baking the upcoming block.  

  1. Delegation 

Delegation comes into the picture if a person couldn't manage to get 1 roll of XTZ and still wants to participate in baking Tezos. As the name suggests, the person can delegate (or lend) their tokens to a baker so that latter has higher chances of baking the upcoming block. The lender and receiver may agree on a revenue-sharing ratio. 

You may find numerous baker groups that offer rates on baking services and charge 10 to 20% for the delegation of the baking process. 

  1. The FCR algorithm 

The FCR algorithm or the Fork Choice Rule algorithm is among the most important concepts under the PoS consensus mechanism. The role of this algorithm revolves around figuring out the correct chain fork.

Talking about the Tezos blockchain, the correct fork is decided by the total number of bakers that delegated the block as the bakers can bake or endorse their block as per their will. On contrary, the longest chain in the canonical block is declared to be the correct fork in blockchains like BTC. 

The bakers get rewarded in Tezos if they endorse their block and thus, bakers usually prefer to endorse their blocks. Besides, endorsing demands 64 XTZ to be kept as a stake and thus, the baker won’t face a problem of nothing-at-stake.  

The Final Thoughts 

Tezos definitely be called the future of cryptocurrencies due to the immense potential they possess. Thus, you should not hesitate to invest in these futuristic tokens to safeguard your future and wealth.       

 


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