The Network Protocol uses “gossip” style communication between network nodes. This layer is what sends and receives transactions on the blockchain. It handles the peer-to-peer connections, blockchain downloading and syncing, and adding blocks. The Transaction Protocol uses a working model of Bitcoin’s Unspent Transaction Output Model (UTXO). This uses digital signatures to verify transactions. The Consensus Protocol uses an optimized Proof of Stake (PoS), designed to prevent the need for a hard fork to resolve problems. It allows all stakeholders to cast their vote on issues, which will be implemented at will.
The governance of Tezos is entirely run by the stakeholders. All stakeholders have the ability to vote on proposals for new features and protocol upgrades, to be created by the community developers, who can also include invoices with their proposed upgrades to receive compensation if their proposal is voted in.
The Proof of Stake is also a blend of proven concepts, including Slasher and Proof of Burn. Slasher is a mechanism that prevents 51% attacks with Proof-of-Stake protocols. Proof of Burn takes a piece of the user’s stake being created and sends it to an unspendable address, burning it out of existence. The willingness to take a short term loss proves trust on the network. This mechanism works as a “luck check”, so it is less likely to have one dominant block producer.
Instead of mining, Tezos coins (Tezzies) are “Baked”. In baking, tokens owned act as lottery tickets, with one being selected to create the next block at random. Not everyone is required to set up the resources to participate in baking. They can also delegate their tokens to another baker and have them do the work if, and when, required.
Interesting Facts:
• Tezos was founded in 2017, but there were internal disagreements with co-founders Arthur Breitman and Johann Gevers who had single authority to access the funds. A long series of internal disagreements and legal battles caused a major delay in its release as the money raised became tied up and went unused on development for over a year.
• The main founder, Arthur Breitman, envisioned a project where the token was only as strong as its community, and in the end, it appears a strong community is exactly what he has built.
• At the time, Tezos was the largest ICO ever, taking in over $256 million USD in 2017. When the market shot up, the holdings became worth over $1B.
• The community filed lawsuits to remove the co-founder from the board of directors, so the project could move forward. Gevers eventually did resign, and the project continued.
• In June of 2018, once the tokens were finally distributed, their value immediately placed Tezos in the top 20 projects by market cap, at over $1.3 Billion dollars.
Website: https://tezos.com/
Whitepaper: https://tezos.com/resources/
Coinmarketcap: https://coinmarketcap.com/currencies/tezos/