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What is Tezos?

Tezos is an open-source, public blockchain protocol that uses a low energy consumption and energy-efficient consensus. The protocol uses a self-amending governance system in which the protocol cannot be hard-forked as it continues to make changes to its existing framework.

What is the Tezos token?

The native token of the Tezos blockchain is called tez and its ticker (symbol representing a token) is XTZ. This token is used to perform transactions on the Tezos blockchain.

The creation of Tezos​

The main weaknesses of Bitcoin and Ethereum were thought to be:

  • Updates require "hard forks" which are highly complex and risky processes to update blockchains by splitting them into two. The communities break/spilt as the consensus could not agree on the upgrade taken to the protocol.
  • Proof-of-Work consensus by Bitcoin is high energy-consuming based on the concentrated activity on mining facilities.
  • Lack of code verifiability of the main smart contract's low-level languages, reducing trust in the reliability of code.

In August and September 2014, Arthur Breitman released the Tezos' Position Paper and White Paper, using the "L.M Goodman" pseudonym.

Arthur's goal was to keep the advantages of other blockchains and to overcome their existing drawbacks and defects.

What makes Tezos different from other blockchains?​

Self-Amendment & on-chain governance​

Self-amendment enables Tezos to upgrade itself without splitting (“forking”) the network into two different blockchains. This is important because the suggestion or expectation of a fork can divide the community, alter stakeholder incentives, and disrupt the network effects that are formed over time.

On-Chain governance enables all stakeholders to participate in governing the protocol. The election cycle provides a formal and systematic way for stakeholders to reach an agreement on proposed changes to the protocol/blockchain.

Smart contracts​

Tezos offers a platform to create smart contracts and build decentralized applications that cannot be censored or shut down by third parties.

Liquid Proof-of-Stake (PoS)​

Transactions are validated on Tezos using the PoS (Proof-of-stake) mechanism. Unlike in Bitcoin where computational power - which can be very expensive - is required to validate transactions, Tezos offers a very affordable alternative for anyone to participate in helping the network to achieve consensus. We'll delve deeper into LPoS in the Junior section of this course.

Running a node and baking on Tezos​

On Tezos, anyone can run a node to verify that the transactions being added to a block are valid.

Nodes responsible for creating new blocks are called baking nodes or bakers. To become a baker on Tezos, you'll need to stake 6,000 tez. All bakers earn tez as a reward for creating a new block.

Testnet vs Mainnet​

The Mainnet is where all the transactions on the blockchain are recorded. On the Mainnet, actual tokens are used. The testnet on the other hand is a development environment that helps you test your applications safely while in development. You may use dummy (not real) tokens on the testnet but you cannot do the same on the Mainnet.

Multiple languages​

Tezos developers have a choice of languages to use when developing smart contracts. They can use the Python library SmartPy, the JavaScript/TypeScript-style jsLIGO, the OCaml-style cameLIGO, or the domain-specific language Archetype.

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