What Is Tezos (XTZ)?

Introduction to Tezos (XTZ)

Tezos (XTZ), a blockchain technology designed to support decentralized applications and smart contracts, has gradually become an important competitor in the blockchain world since its initial proposal in 2014. The Tezos blockchain's mainnet officially launched in 2018, backed by several global enterprises, including the Switzerland-based nonprofit Tezos Foundation, which is committed to promoting the awareness and adoption of the Tezos blockchain.

In July 2017, Tezos raised $232 million through its fundraising campaign, becoming one of the largest blockchain projects in history. This not only showcased the power of the Tezos community but also laid a solid foundation for its subsequent development. The Tez (XTZ) token has now become the center of an expanding user ecosystem that spans decentralized finance, art, gaming, and more, indicating Tezos's important status and influence within the global organic community.

How Tezos (XTZ) Operates

The Tezos blockchain executes smart contracts using its proprietary Michelson programming language, designed to precisely implement complex contractual logic. Developers often write smart contracts in higher-level languages, such as SmartPy, Ligo, or Archetype, and then compile them into Michelson. Transactions on the network require fuel fees paid in Tez (XTZ) to ensure smooth execution.

Tezos employs a unique Proof of Stake (PoS) mechanism, called Liquid Proof of Stake (LPoS). In this system, users holding over 6,000 XTZ can become "bakers," responsible for creating, signing, and publishing new blocks, and endorsing blocks published by other bakers. Users with fewer tokens or those unwilling to set up the necessary hardware can delegate their XTZ to a baker, participating in the network's maintenance and governance process. This mechanism ensures the network's decentralization while improving its security and efficiency.

Tezos (XTZ)'s Path of Innovation

The uniqueness of the Tezos blockchain platform in the smart contract domain primarily lies in its on-chain governance and self-amendment mechanisms. These allow Tezos to upgrade based on community consensus without experiencing community-splitting hard forks, such as the division between Bitcoin and Bitcoin Cash. This design not only fosters community harmony but also enhances the network's stability and adaptability.

Tezos's self-amendment capability enables it to easily adapt to regulatory and technological changes, maintaining its cutting-edge technology and compliance. For example, in the Ithaca 2 protocol upgrade, Tezos successfully replaced its consensus mechanism, demonstrating its high flexibility and adaptability. In contrast, significant changes made by Ethereum to achieve upgrades, such as Ethereum 2.0, essentially involve building a new blockchain, starkly contrasting with Tezos's gradual and seamless upgrade strategy. Through this unique governance approach, Tezos ensures its important position and ongoing development capability in the evolution of blockchain technology.

Advanced Governance Mechanism of Tezos

The Tezos blockchain achieves self-upgrades and corrections through a unique on-chain governance model, which allows for the submission of code upgrade proposals and decides on their adoption through token holder votes. This governance approach is notably inclusive and democratic, requiring delegate approval for any significant system upgrades, whether adjustments to fees, changes in the baking process, or fundamental shifts in the consensus algorithm.

The active participation of the Tezos community is key to the success of its on-chain governance. Members actively discuss and vote on the future direction of the blockchain, allowing the system to evolve and improve through the power of the community. For example, the Ithaca 2 upgrade in April 2022 successfully switched the consensus algorithm to "Tenderbake," demonstrating Tezos's adaptability to new technologies. The Delphi upgrade in November 2020 significantly reduced gas fees, greatly promoting the development of decentralized finance (DeFi) and proving the effectiveness and flexibility of Tezos's on-chain governance model as an example for the entire blockchain industry's advancement.

Diversified Application Scenarios of Tezos

As an efficient platform for verifying financial transactions, the Tezos blockchain has been widely applied across multiple domains. In September 2019, the French Gendarmerie's cybercrime division utilized Tezos for judicial expense verification, marking government agencies' recognition and adoption of Tezos technology. Beyond financial transactions, Tezos has expanded to the transfer of ownership of illiquid assets, such as real estate and artworks. MountX company leveraged Tezos technology to tokenize real estate in Mexico, showcasing Tezos's potential application in the digitalization of tangible assets.

Additionally, Tezos has shown its strong appeal in the Non-Fungible Token (NFT) ecosystem, attracting global brands like Manchester United, Ubisoft, Redbull Racing, and McLaren. These application cases not only prove the reliability and diversity of Tezos technology but also signal its important role in the future digital economy.

Trading and Storing Guide for Tezos (XTZ)

Trading Tezos (XTZ) tokens is a straightforward and convenient process, available through various cryptocurrency trading platforms. Using LBank as an example, first, log into your account and select a trading pair, such as XTZ/USDT. On the trading page, you can simply execute a purchase by entering the desired amount of XTZ and choosing a market order. After the purchase, XTZ tokens will be directly deposited into your spot wallet, marking the successful completion of the transaction.

Storing Tezos (XTZ) is equally flexible, with several wallet options available. Software wallets like Trust Wallet offer a convenient and quick way to store XTZ while ensuring a degree of security and accessibility. For those seeking higher security, hardware wallets like Ledger or Trezor are preferable, protecting your private keys through a physical device and significantly reducing the risk of cyber-attacks. Regardless of the storage method chosen, it's important to secure your private key and wallet information to protect your assets from unauthorized access.

Conclusion

Tezos (XTZ), with its unique technical architecture and advanced governance mechanism, has established its position in the evolution of blockchain technology. From the precise implementation of smart contracts to the broad deployment of decentralized applications, Tezos has demonstrated strong adaptability and potential for future development. Through active community participation and continuous technological upgrades, Tezos not only promotes the stability and sustainable development of blockchain technology but also contributes to the advancement of the entire digital economy. Looking ahead, Tezos will continue to explore new application scenarios in decentralized finance, digital art, and more innovative fields, driving blockchain technology to higher levels of development.