One of the great advantages of Ethereum, the second most popular cryptocurrency on the network, is its Blockchain which operates with much more advanced technology than Bitcoin. Such is the case of 0x, a protocol that can be more than useful for a large number of users, developers and cryptocurrencies.
This allows Ethereum to offer the possibility of developing a large number of applications and cryptocurrencies on its same blockchain. Developed on it, 0x is one of the protocols that you should know if you are a developer, an expert in cryptocurrencies, etc.
▶ What is 0x?
0x is a protocol designed to allow decentralized exchange and Token Off Chain operations based on ERC20, this in order to reduce the required gas and also, the operating costs. For this, 0x was developed and run on the Ethereum Blockchain.
The use of open source software as well as the existing Ethereum blockchain allowed 0x to create its own Token, ZRX. This project was financed through an ICO where the 0x token was launched for sale, thus guaranteeing the funds for this project.
More than focusing on normal, ordinary users, 0x focuses on offering solutions for cryptocurrency platforms. For this, they provide the necessary protocol to improve the functioning of decentralized exchanges. This makes the operation of the platforms more efficient reducing gas and costs.
Despite the strong criticism that the project has received, especially for the way in which it has implemented its algorithm and its decentralized operation, 0x has continued to reap achievements. At least that is how its developers say it, who have faith in the project.
▶ Differences between 0x and Bitcoin
- Chain operation: This is one of the most striking and striking points of 0x. This is because here the orders move outside the chain, which is known as Offchain, this is totally different from the operation of other cryptocurrencies.
- Safety: You should know that one of the harshest criticisms about 0x is the fact that removing transactions from the blockchain violates security. That is why its creator has shown certain indications of implementing some centralized solutions to avoid security problems.
- Number of coins: Another point that you must take into account is that the amount of 0x coins is limited to 1,000,000,000. Of these, a total of 517,000,000 are currently in circulation, the rest are planned to be released over the years, thus controlling their value.
- Commissions: You should know that, being an open source platform, 0x has lower commissions which are mainly focused on small deposits. The objective of these reduced commissions is to have sufficient funds to keep the platform active, as well as to implement new updates and improvements.
▶ What is the technology behind 0x?
To work, this protocol uses the Ethereum blockchain which is a great advantage, since this gives you access to benefits such as the speed of transactions. On the other hand, its token is supported by the Ethereum token, ERC20, which solves compatibility problems.
By using unique software, and in order to offer truly decentralized operations, 0x uses a process called Off-chain. The Off chain process means that transactions are not carried out within the chain or Blockchain, that is why 0x is fully decentralized.
When using the Ethereum Blockchain we have that each of the members or users is a node in the chain, but, By using the Off-Chain process, transactions do not require signatures. That's right, when the smart contract is executed, it leaves the chain, which means that it does not need signatures to validate it.
In this way, only essential data remains within the blockchain while the rest of the information is kept in external folders. This reduces gas and commission costs by reducing the information in the blocks.
You should know that the ZRX Token mining process does not exist as such, although it is possible to receive rewards for participating in the 0x process. Each of the relayer, nodes in charge of announcing the buy and sell orders, can earn a commission.
To earn your commissions you must serve the Takers or buyers by showing them the best price for the operation. A great advantage is that each of the Relayer or users have the ability to set their own commissions for each transaction, which ensures the competitiveness of the Relayer.
▶ ZRX Storage
If you want to store your 0x coins or want to make a transfer, you will first need a virtual purse or Wallet. An advantage of operating under the Ethereum Blockchain and its ERC20 token is that it uses the same index and has the same compatibility as Ethereum.
This means that you can use any Wallet that is compatible with Ethereum to store your ZRX Coins, which is a great advantage. You can find all kinds of options, from classic Wallets to those that work on Android and IOS mobile devices.
▶ How to get it?
There are two ways to get 0x, The first is to be part of the announcement of the purchase and sale of transactions, that is, to be a Relayer. Thus, you can earn commissions for carrying out this type of operations which you can save in your Wallet to later exchange or use.
Furthermore, you can get coins by buying them in exchange or exchange houses. As the popularity of 0x increases every day, more and more exchange houses have this currency available. The pairs available are many highlighting BTC, ETH, USDt, as well as the option to use USD on Ethfinex or Livecoin.
Financial analyst and economist with a master's degree in finance.