What is going on?
It is today the fifth day since the ICO sale of Tezos started . Already more than $206 million has been collected from this crowd sale . The ICO raise is uncapped. That means that Tezos can raise as much money as they want. It is only limited by time. The ICO sale will end on 8 july.
I personally, don’t like the uncapped ICO sales. I get confused. Tezos foundation reports that they need $900.000 for maintenance, integration and proposals for the first year. Why is the ICO sale uncapped? Why do they need so much money. Is $10 million not enough to start a company? Why all this people are so crazy or very smart to put that much of money in one start-up. Tezos believes an uncapped sale is necessary to widely spread the cap and to build a robust network. Well, I am not buying that explanation.
I understand that people want to invest in it. But the collected money from the ICO sale is far more money than Tezos or any start-up needs. Why not collect first the money you really need to develope a working product(s) and then let the market do it's magic on a start-ups value? Maybe I am looking to this matter from a wrong perspective. I would love to hear from you if you can enlighten me and others that think the same. I want to understand why it is good/necessary for startups to raise hundreds of millions of dollars.
What is Tezos?
Tezos is a smart contract system which has a build-in consensus mechanism. It consumes less power because it is based on the proof-of-stake consensus algorithm. This means that connected participants validate the transaction.
Tezos build its own blockchain from scratch and eliminated the risk of hard forks that can split the market. They also understand that smart contract bugs can damage the reputation of a platform. For that reason Tezos is using the code language OCaml. A coding language that has a powerfull pattern matching which makes it easier to apply formal verification on the Tezos blockchain. So developers can rule out the weaknesses before uploading the code on the blockchain.
Their smart contract language makes it easier to apply formal verification to any smart contract running on the Tezos blockchain. This allows developers to rule out weaknesses in code before uploading that code on the blockchain. Tezos relies on a less onerous, less computationally intensive, and less power-consuming proof-of-stake consensus algorithm, where bonded stakeholders validate transactions.
Unique Selling Point of Tezos
All blockchains offer financial incentives for developers by explicitly funding protocol development. Up till now the power got centralized towards the core development team or the miners when it came to formulating design choices. Tezos differiantiates itself by putting the power in the hands of developers. The core development team still will play an important role ofcourse but doesn’t want to be the only contributors. Any developer can propose an upgrade for the protocol and attach an invoice to be paid. When the upgrade gets accepted, the developers are provided with tokens that have immediate value. With this system developers do not need to search a sponsorship to get paid. It is likely that this will make developers more driven to contribute to the development of the Tezos blockchain. Another advantage is that the maintenance and development of the network gets decentralized.
What do you think? Will Tezos gets bigger then Ethereum?
If you want to read more about Tezos:
Position Paper: https://www.tezos.com/static/papers/position_paper.pdf
White Paper: https://www.tezos.com/static/papers/white_paper.pdf
If you want to invest:
https://crowdfund.tezos.com/