Tezos (XTZ): what kind of cryptocurrency is it, the history of its foundation, the principle of operation, the prospects for the development of the project

What is Tezos (XTZ)?

Tezos is nothing but an open source platform for assets and applications that evolves through updates.

Tezos was created with the aim of attracting the community, that is, XTZ token holders can participate in voting for any changes to the rules of the network in the future.

Having reached a consensus on these rule changes, the software automatically updates the rules on all network nodes. This is actually the management of the future Tezos directly by the hands of users.

This governance system provides the network with the benefit of a significant increase in user satisfaction, virtually eliminating the possibility of a hard fork.

The development of Tezos is a radically new solution in the crypto world, as its new model has divided the crypto into two types: with «on-network control» and «off-network control».   

The history of Tezos

Tezos cryptocurrency was created by a married couple — Arthur and Kathleen Breitman. They met at a crypto-anarchist dinner.

Working at Morgan Stanley, Arthur Breitman in 2014 publishes 2 articles about the Tezos concept. He created a program that searched for unclaimed websites with names that could be pronounced in English.

In 2016, Arthur travels to Switzerland, where he meets Johann Gevers, who is working on the digital currency Monetas. Gevers founded the Tezos Foundation in Switzerland.

In 2017, Tezon held an initial coin offering as part of an ICO, which made it possible to receive $232,000,000 in BTC and ETH.

After a while, disputes began between the Brightmans and Gevers about decision-making, as well as about the company's expenses. It didn’t end there either, as a couple of lawsuits were soon filed against Tezos, the cause of which was an ICO, where, according to the plaintiffs, it was a violation of US securities law.

Ultimately, Johann Gevers leaves the Tezos Foundation in February 2018, receiving $400,000.

Tezos was released on September 17, 2018. And already in 2020, the Tezos Foundation reaches a settlement in lawsuits against the company, paying $25,000,000.

How does Tezos work?

Tezos certainly offers similar features as other crypto coins, but its system of operations is very different. Blockchain Tezos can be divided into two separate parts:

1. Network shell: The part of the code that processes transactions, admin operations and can change depending on how users vote.
2. Network protocol: A piece of code that sends suggestions to the shell for validation.

Tezos uses a variant of the classic Proof-of-Stake (PoS) consensus mechanism called Liquid Proof-of-Stake (LPoS). This mechanism works when its users stake or, in the case of Tezos, «bake» (sign and publish blocks) XTZ. To become «a baker», one node must «bake» 8,000 XTZ tokens.

«Bakers» play an important role in the governance of the blockchain by taking part in voting on changes to the code proposed by the developers. The voting process lasts 4 periods of 23 days each. Let's consider each of them in more detail:

1. Proposal period: any «baker» from the network can propose any changes to the network. Further, the proposals that received the most votes of support from other participants move to the next stage.
2. Research voting period: there is a primary vote on the proposed options for changes, those proposals that received 80% of the votes of support proceed to the next stage.
3. Test Period: The proposal is implemented at a temporary fork in the network to ensure it works and will not harm the main blockchain.
4. Promotion voting period: At this stage, the final vote takes place to determine whether the proposal will be implemented in the Tezos source code. 80% of votes or more are required to pass.

In addition, «Bakers» can also be rewarded for lucrative offers by attaching an invoice to their submission. If their offer is implemented after passing all 4 stages, the specified amount for the «Baker» will be minted in the invoice.

Tezos Token: XTZ

Unlike Bitcoin, the XTZ offer is unlimited and consists of 914,722,512 XTZ, at the time of writing this article. And although the «bakers» may vote for the introduction of such a restriction, at the moment the tokens show inflation of 5%.

During the initial placement of tokens, about 80% of XTZ went to investors, and the remaining 20% were distributed between Dynamic Ledger Solutions and the Tezos fund in equal shares.

XTZ showed the highest price in October 2021 — $8.72. To date, the XTZ exchange rate is $1.38.

How to buy Tezos? Where to store XTZ?

Tezos cryptocurrency is quite easy to buy. This coin is listed on the most popular cryptocurrency exchanges such as Coinbase, Kraken, Crypto.com, Gemini, Binance and many others. In addition to exchanges, you can also purchase a token on cryptocurrency exchange services — crypto exchangers. This operation can also be performed on our Buycoin.online website.

You can store a crypto coin on various crypto cats, for example, Kukai, Ledger, Trezor, Temple, Umami, Airgap, Trust Wallet, etc.

Tezos partnership

Tezos has already partnered with a number of institutions, including the Taurus Group, Anda Capital, the Korea University Blockchain Research Institute, and others.

Perhaps their most notable partnership is Coinbase, where Coinbase users can stake their Tezos. Although, if users go down this path, they must be prepared to trust Coinbase, a centralized exchange, with their XTZ.

Tezos Partnership Agreements for 2021-2022:

• Three Swiss financial companies (Crypto Finance, InCore Bank and Inacta) are working with Tezos to create tokenized assets — a strictly regulated financial product.
• Manchester United Football Club has signed a multi-year sponsorship agreement with Tezos worth over 20,000,000 pounds. As part of the agreement, Tezos will be presented in the club's training uniform.
• Red Bull Racing Honda has signed a multi-year partnership with Tezos to create its first experience for NFT fans.
• Ubisoft has partnered with Tezos to add NFT elements to their games.
• Misfits Gaming Group has announced a partnership with Tezos, which will become the official blockchain of the company.

Tezos Rate Forecast (XTZ)

1. Cryptopolitan says that the price of the cryptocurrency will jump slightly in the last quarter of 2022 to $1.59. The token will continue to grow further, according to experts, and by 2025 the coin may reach $5.19. In 2028, XTZ could start trading around $15.60.
2. Changelly predicts the price of Tezos in 2023 at $2.11-2.44. Until 2025, the price of the token will rise to a potential maximum of $5.19, according to analysts.
3. CryptoNews also gives Tezos an optimistic price forecast. «With the support of reliable smart contracts, the price of Tezos can easily reach $5.60 dollars by the end of 2022», the website writes. CryptoNews expects XTZ to grow significantly by the end of 2025, when prices will reach $10.
4. DigitalCoinPrice are optimistic about Tezos, predicting that by 2025 it could double in price and even reach a maximum of $3.99 dollars.

Prospects for the development of the Tezos cryptocurrency

The Tezos cryptocurrency is relatively young, compared to other cryptocurrencies such as Bitcoin, Ethereum, Litecoin, for example. But, despite this, it is developing very actively, concluding cooperation with many well-known organizations, websites, sites. In turn, this cannot but speak about the reliability of the project and its excellent reputation.

In July 2022, at the TezDev conference, optimistic rollups of WASM and EVM were announced, which in theory allow the network to reach 1,000,000 operations per second. In comparison, the post-Ethereum merger tps is averaging 14. Beyond this milestone, Tezos has 135 other projects, showing solid adoption across all DeFi categories.

Tezos has an extremely flexible foundation. Even if there is a flaw in its current configuration, it can be fixed with an optimized process. For this reason alone, Tezos investors tend to bet long-term rather than looking for short-term gains.