Tezos or XTZ is a blockchain that uses its native token, Tez or Tezzie. Token holders in this blockchain receive a reward for taking part in its proof of stake consensus mechanism. So the tokens are not mined because the network does not use the proof of work consensus mechanism. This blockchain is an open-source platform developed to create the infrastructure for hosting applications and assets. Token holders are responsible for governing the protocol. In this blockchain, a number of programmable blockchains run self-executing codes known as smart contracts. These contracts are normally used in decentralized finance (Defi). If you are interested in investing in Tezos, read on to understand the protocol better. 

What is Tezos?

Tezos is simply a smart contract that works with an on-chain governance model. This model allows developers to implement changes automatically without a hard fork. 

On the other hand, Tezos uses the proof of stake consensus mechanism, allowing users to confirm transactions and get a reward. The participants do not need expensive hardware and technical expertise to mine the token. 

Why Was Tezos Invented?

Since the launch of Bitcoin and Ethereum, the concept of decentralization has become popular. But the problem with these networks was that they put development and design decisions centralized and in the hand of the mining community and the development teams. As we have seen, this led to a lack of flexibility and resulted in the split of the main blockchain into two different projects. 

Tezos aimed to create a network that allows stakeholders to make big decisions. In these cases, stakeholders, by using governance rules, approve or disapprove network changes and avoid a hard fork. So by decision-making and governance rules built into the blockchain network, democracy decide where the network goes.

 In most cases, a hard fork is not a pleasant phenomenon because it can be continuous and even split a blockchain into two competing cryptocurrencies. 

How Does Tezos Work?

Users call the unique architecture of Tezos a Network Shell. In this network, the development team is able to create a modular style of blockchain that can be changed and upgraded just by following a particular set of rules. 

Blockchains normally consist of three different layers. The first layer is called the network layer, used for the communication between nodes and peers. The second layer, or the transaction layer, is where transactions are verified. The third layer, or the consensus layer, is a self-explanatory network.

Tezos combined the transaction protocol and the consensus mechanism to create a single layer. In Tezos, stakeholders are able to communicate between different layers and govern the network. 

What Are the Benefits of Tezos?

Here we are going to talk about some of the advantages of using this network:

Self-Amending

This feature lets a blockchain upgrade itself. So there will never be the need to fork a network. A hard fork is the last chance of a broken blockchain which results in the scatter of the community, fragment the resources and change stakeholders’ reward. So it would be great to have another alternative than the hard fork. In this case, the network upgrade and the development team apply the necessary changes. 

On-Chain Governance

Stakeholders are responsible for the governance of the network. For every blockchain change and amendment, an election is needed for stakeholders to reach a consensus. 

Decentralized

When there is no need for miners in the network, the control of the network won’t be in the hand of a small group of people who happen to have the ability to buy expensive hardware. 

Smart Contracts 

Tezos can be used to create decentralized applications or dApps and smart contracts. So no third party can track down these applications or contracts. 

Eco-friendly

Tezos does not use the proof of work mechanisms like Bitcoin and Ethereum. This network uses proof of stake as the consensus mechanism. It requires less energy and cost to operate. So this blockchain is excellent for making decentralized blockchains that are eco-friendly too.

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FAQs

Best way to buy Tezos in Australia

The first thing to do when it comes to buying cryptocurrency is to find a reliable crypto exchange. We all know the big names out there but let’s say you are living in Australia; what are those big names to you? Can you trust them? Is there anything special they have to offer? 

The best thing to do is to find a local crypto exchange in Australia. Bitunivex, as a local crypto exchange located in Sydney, is here for you. Deposit and withdraw anytime you want with AUD. 

 The most crucial factor in choosing an exchange is the customer services they are going to provide you. Remember, there will be times that you are desperate to ask your question within Australian business hours; you can always ask us at Bitunivex. We are here to answer your question in less than three minutes.

Is Tezos real and safe?

At the moment, only traders and project backers will buy this coin. Believers acquire a stake and manage the network. It is a real network, but you should consider that this network should focus on running the blockchain operation instead of becoming a real-world cryptocurrency. 

Tezos is a decentralized blockchain; there is no central database in this network. So no one can hack or change, or destroy the information. The funny thing is that if a hacker finds a way, he needs to get stakeholders’ approval for any amendments.

Can I cash out Tezos anytime?

Whenever you need to withdraw your asset, all you need to do is send us a request. Your time and assets are important to us, and we know how seconds can be life-changing in the finance market. 

We will take care of your cash-out request in a matter of minutes. All you need to think about is to find a better asset to invest in. Here at Bitunivex, we try to introduce you to promising projects on Defi and cryptocurrency because we dream big for our clients.