One of the most debated platforms in the cryptocurrency realm, Tezos has been under the crypto industry's magnifying glass since those early days. record $232 million ICO Over time, Tezos has faced a multitude of obstacles including legal battles initiated by displeased ICO investors and internal conflicts with Arthur and Kathleen Breitman, the intellectual vectors of Tezos, and Johann Gevers, their past foundation president.
Recently, the storm around the platform has quieted to more conventional chaos characteristic of the crypto world, with the Tezos Foundation also making headlines by launched their Betanet , almost a year post their groundbreaking ICO. However, amid the limelight around its turbulent saga, the core technology and vision of Tezos have often been overshadowed outside its dedicated community.
As the tumult seems to settle, a key question remains: what truly defines Tezos, and how did we arrive at this moment?
A Remarkably Bizarre History
Crafted by Arthur Breitman, a skilled computer scientist with a background in financial quantitative analysis, Tezos debuted as a white paper and a position paper in August 2014 under the alias 'L.M. Goodman'. Following that, Breitman established Dynamic Ledger Solutions, Inc. in Delaware, taking the helm as CEO and transferring the Tezos code’s intellectual property into this entity.
Arthur alongside his partner Kathleen, previously engaged with Bridgewater Associates and R3, opted for an ICO to secure funds for the Tezos development due to challenges in sourcing traditional investments. Tezos aspires to be a 'self-amending', open-access, decentralized network facilitated by smart contracts. Its primary focus is a democratic governance structure enabling comprehensive stakeholder participation through a proof-of-stake mechanism.
Their ICO successfully amassed $232 million in July 2017, prompting the Breitmans to set up the Tezos Foundation in Zug, Switzerland. They enlisted Johann Gevers to preside over the foundation, intended to encompass Arthur’s company, DLS, along with its associated code rights.
The envisioned path hit a snag as tensions arose between the Breitmans and Gevers. In his dual role as the foundation's president and board member, Gevers controlled the ICO funds, leading to disagreements over personnel appointments within the Tezos Foundation.
Arthur Breitman, Image from Oslo Freedom Forum
The distribution of ICO tokens and blockchain launch under a free software license were delayed, sparking contributor concerns. Additionally, the Breitmans made moves to oust Gevers, triggering a public fall-out with ripple effects through the Tezos community and Arthur’s entity, DLS.
DLS then faced numerous lawsuits asserting the Tezos tokens (Tezzies) should be categorized as securities mandatorily registered with the SEC. Efforts to reclaim funds by contributors met a barrier when the SEC famously denied a Freedom of Information act community appeal fearing it may hinder future regulatory actions.
Ultimately, February 2018 saw Johann Gevers and the board of the Tezos Foundation stepping aside voluntarily, replaced by Tezos community loyalists backing the Breitmans, namely Michael Mauny and Ryan Jesperson. The intricate saga with full details is accessible in Wired’s piece released last month.
Rarity in updates from the Tezos Foundation kept community jitters alive for months. Then in a recent development, Tezos Foundation announced dictated compliance with KYC/AML norms for previous-year ICO contributors. The announcement stirred significant dissent, seen as a breaking point amidst numerous ongoing issues.
Shortly thereafter, the Tezos Betanet made its debut and the initial token distribution commenced. Amid anticipation, token trading large sell-off surged on select exchanges ( Gate.io & HitBTC ). For those retaining their Tezos tokens, the platform finally seems operational, setting the stage for its promised capabilities to unfold.
What is Tezos and How Does It Work?
Tezos represents an open-access, autonomous, and evolutionary framework employing smart contracts, marked by its distinctive on-chain governance model and advancements over rivals like Ethereum. Its key goals are seamless on-chain protocol updates through a modular structure supported by refined Proof of Stake consensus, inviting all stakeholders to contribute to the governance framework.
The Network Shell
Tezos achieves its unique governance and evolutionary prowess using a network shell. To grasp the functionality of the Network Shell, let’s dissect a standard blockchain protocol into three key sub-protocols.
- The Network Protocol
- The Transaction Protocol
- The Consensus Protocol
The network protocol, colloquially the 'gossip' protocol, facilitates transaction dissemination across the nodes. It encompasses blockchain downloading, peer interaction, and block broadcasting on the network. Innovation is frequently centered at this protocol level.
Defined by a cryptocurrency’s scripting syntax, the transaction protocol in Bitcoin is the Unspent Transaction Output Model (UTXO). Using Bitcoin as context, this protocol covers everything from Bitcoin generation during mining to digital signature application for verifying transfers. Forks of this protocol, or 'soft forks,' while less contentious, still exist but lack the divisiveness of 'hard forks'.
The consensus protocol holds critical importance as it outlines the consensus methodology for blockchain state alignment across network nodes. While Bitcoin employs Proof of Work, Tezos opts for an optimized Proof of Stake model. This protocol ensures blockchain integrity by thwarting double-spending and securing immutability, where diverging as a 'hard fork' typically incites community divisiveness. Tezos' mission is to address this issue through its innovative architecture.
Tezos integrates the transaction and consensus protocols into a cohesive 'blockchain protocol'. This protocol ensures a consistent global state mutation wherein blockchain blocks act as operational components on the chain state. Notably, this protocol's introspective nature empowers the platform's self-amending capabilities, allowing stakeholders to directly influence system protocol updates.
Acting as an intermediary, the network shell bridges the network and blockchain protocols (transaction and consensus). Its primary role involves maintaining the most accurate chain version acknowledged by the client. Written in OCaml, Tezos’ network shell recognizes three distinct objects.
- Blocks
- Transactions
- Protocols
Exploiting OCaml modules, existing protocols can undergo direct amendments. Notably, the network shell serves as the network's DDoS shield, a vital component enabling self-amendment - a renowned on-chain governance hallmark.
Tezos Governance
The stakeholders exclusively oversee Tezos’ governance framework. They engage in protocol governance by voting on developer-submitted protocol enhancements. Developers can attach financial requests to their proposals, securing compensation upon approval.
While the initial voting framework is predefined, Tezos' governance process is dynamic and adaptable, potentially modifying even its own voting mechanism over time. Among the possible triggers for protocol amendments, the prominent one is a straightforward stakeholder ballot.
However, more intricate triggers like ensuring new amendments' constitutionality in alignment with foundational accepted amendments, which stakeholders vote on, can also be executed through this governance approach.
Advanced Smart Contracts & Rigorous Verification
A crucial aspect of Tezos is the formal verification process which mathematically validates program security while reducing contract code vulnerabilities, distinguishing it from past incidents like the DAO and Parity Wallet breaches.
Proof of Stake Consensus & Baking
Tezos’ unique Proof of Stake model synthesizes concepts like Slasher, Chain of Activity, and Proof of Burn. Abandoning traditional mining, Tezos introduces 'Baking' — where block generation is randomized among Tezos token holders (Tezzies), allowing selected stakeholders to produce blocks sans computational Work Proof puzzle solving.
Discover Tezos (XTZ): A Beginner's Guide to Insights and Evaluation
Tezos stands out as a decentralized, self-correcting platform enhanced by smart contracts, with a spotlight on its innovative governance system directly integrated into the blockchain itself.
A Novice's Introduction to Tezos: A Blockchain Built on Controversy and Self-Adjustments website .
Conclusion
Tezos remains one of the most divisive platforms in the crypto world,
capturing widespread attention since the beginning of its journey.
2Comments
3. When XTZ bakers can start baking?*
A. After the first 5 cycles.
B. After the first 6 cycles.
C. After the first 7 cycles.
Exploring Smart Contracts and Rigorous Verification
A. Hold XTZ on gate.io.
B. Delegate wallets.
The vision of Arthur Breitman, Tezos emerged from his background in computer science and quantitative finance. Under the alias “L.M. Goodman”,