✔️ Information reviewed and updated in February 2024 by Pedro Martínez González
The world of cryptocurrencies has seen rapid growth in both users and virtual currencies such as Tezos. This is because digital money is becoming more and more attractive as a form of payment and also as an investment method.
With so many cryptocurrency options on the market, differentiating yourself becomes essential for companies and users to take you into account. Here we will talk about Tezos, a cryptocurrency that has come with an offer that could seem interesting. We will tell you everything you need to know about this option.
The best way to describe Tezos is as an open source Blockchain platform which operates a token or digital currency. Also known as Tez or Tezzie, Tezos is another of the cryptocurrencies that we can currently find available in the market.
Similar in system to Ethereum, Tezos supports both dApps and Smart Contracts or digital contracts. The main difference compared to Ethereum is that Tezos has a different governance system which is based on a protocol which allows user participation in decision making.
The birth of Tezos is made as a cryptocurrency designed to prevent some of the errors that have arisen throughout the operation of Bitcoin. One of them is the so-called bifurcation of the Blockchain, an event which is known as the Hard Fork and which was a strong crisis for Bitcoin.
Its open source system allows flexible operation of the platform adapting to different environments and needs. What's more, allows the rapid execution of smart contracts to make their operation more efficient. It also allows the development of App from the blockchain.
✨Tezos vs other cryptocurrencies
- Consensus and governance: One of the main differences that we find regarding the operation of Tezos is in its governance system and the consensus it generates with its users. And, unlike Bitcoin or Ethereum, Tezos allows direct and consensual control over the operating rules.
- Fork problems: In the world of cryptocurrencies, the Bitcoin Hard Fork event is well known, which resulted in a parallel currency with the bifurcation of the Blockchain. In Tezos there is no risk of such a bifurcation when updating the system, thanks to the use of the platform's consensus system.
- Updated: To keep its system up-to-date, but at the same time preserve the original code of the blockchain, Tezos relies on users. These are in charge of approving the updates using their consensus system and thus easily integrate them to the Blockchain.
- Algorithm: Regarding the algorithms used by Tezos, We found that this uses the liquid Proof-of-Stake and not PoW, the Liquid PoS is very similar to the PoS of other platforms. This allows the consumption of resources to be very low when operating.
- Mechanisms: Thanks to the way it integrates community, system and functions, we found some interesting mechanisms. On-chain governance, self-modification, proof-of-stake liquid consensus, and smart contracts are perfect examples of these Tezos mechanisms or actions.
- Language: To make communication between the platform nodes much easier, as well as make its operation more efficient, Tezos works under a different language than the conventional one.. The Michelson language is used here which is optimized to work efficiently with intelligent scripting.
✨Data about its technology that you should know
The first thing you should know is that Tezos Coin uses the PoS protocol, in an improved version, to work. This allows users to have greater control and use, being able to process payments, create blocks in the chain and have the right to vote on decisions.
At Tezos, the process of creating a new block and integrating it into the chain is known as Baking, or baked in Spanish, and the participants are known as Bakers, or bakers. This is a very original way of calling the mining, in this case baked, of Tezos.
Another point that you must take into account is that the Blockchain is very similar to Ethereum and Bitcoin, only with improved functions. An example is found in the consensus system which avoids the bifurcation of its chain so that it does not base what happened with Bitcoin and Bitcoin Cash.
As we already told you, here, more than mining, a "baking" process is followed. Participants are rewarded for participating in the open evidence consensus mechanism. This is what makes Tezos have the concept of governing under self-governance.
Unlike Bitcoin that is mined under the PoW algorithm, in the case of Tezos mining is done under the PoS algorithm in its liquid version. This, in the first place, makes the hardware and software requirement much lower than that of other platforms.
Another point is that this liquid proof-of-stake algorithm determines earnings based on the amount of accumulated assets and the blocks that have been baked. It might seem a bit complicated, but once you learn how mining works, everything is easier.
✨ How to get them?
In addition to mining Tezos, you should know that it is also possible to get this currency by buying it. To do this, you must go with an Exchange, although this is not difficult, since Tezos is very popular, which is why the main exchange houses offer this cryptocurrency in their list of coins.
Another great advantage is that the pairs of Tezos are varied. You can buy Tezos by using other cryptocurrencies, for example, or you can buy Tezos with fiat money. Although this virtual currency could seem similar to others, the governance system and the power of the users can be good differentiators against the competition.