Tezos (XTZ) price is up more than 100% since the beginning of 2020. It’s one of the best performing cryptocurrencies and has managed to enter the top 10 projects by market-cap as its market capitalization reached upwards of $1.9 billion.
However, given the notorious history of most existing cryptocurrencies, people remain somewhat hesitant of what Tezos brings and whether or not it’s just another coin with little to no value. Well-known cryptocurrency commentator Alex Saunders commented on the matter.
Tezos Top 10? Let’s be real, how many apps, devs, community & network effects does #Tezos have? I’ve already heard of forks happening because people aren’t happy. 80% coins are staking reducing available supply. This is going to fall hard once the euphoria ends. Am I wrong? $XTZ pic.twitter.com/90opLiYKf9
— Alex Saunders (@AlexSaundersAU) February 9, 2020
Breaking Things Down For Tezos
Describing itself as a “self-amending blockchain,” Tezos is a blockchain protocol based on the liquid proof-of-stake consensus algorithm. It allows the creation of smart contracts where parties can interact based on predetermined conditions.
The way the algorithm works is coin stakes (or “bakers” as they are called, in the case of Tezos), get the right to vote and govern the network. Hence, Tezos can’t go through a fork the way Proof-of-Work (PoW) blockchains can. For the blockchain to undergo an update, the majority of bakers need to agree on that.
So far, Tezos has undergone two system-wide network updates called “Athens” and “Babylon.”
So you’re asking why the bakers won’t take advantage of network updates to run harmful ones? The idea behind is that bakers won’t vote on a malicious process because they have a financial interest vested in the project; thus, they will harm themselves.
Speaking on the matter was Arthur Breitman, co-Founder, and CTO of Dynamic Ledger Solutions, who told CryptoPotato:
… you’re going to have a hard time convincing bakers to vote for a harmful proposal. First, bakers are personally bonded. Second, the voting threshold is 80% (of bakers, which currently comprise 10-12% of the stake in the network), so this is not a simple 51% majority.
In other words, it’s rather hard for Tezos to go through a system-wide update that isn’t in favor of the governing community, simply because it’s the community that decides it.
Tezos Might Already Be Where Ethereum Wants To Be
If Bitcoin was the protocol that brought to the word the storage of money through digital currency, then Ethereum demonstrated that it could be much more programmable via its smart contracts.
According to Breitman, “you could make Tezos much more programmable. Instead of just deciding, I pay you, and you pay me, you could make conditional payments: I pay you if this condition happens, and so on.”
In regards to Ethereum, it has been struggling with releasing its long-awaited Ethereum 2.0 update, which will see the network migrate to Proof-of-Stake. In fact, in the second half of 2019, the network was working at 94% of its capacity. This showcased the need for a more scalable solution, hence why the push to switch to PoS is so critical.
Tezos, on the other hand, is already there. This is something that should be considered. Furthermore, a lot of exchanges are adding support for Tezos staking, which incentivizes people to invest and receive passive rewards.
Tezos Price Increase
The performance of XTZ has been nothing but impressive throughout the past 12 months, and it has managed to claim the number ten spot on the market cap list. At the time of this writing, Tezos holds a market cap of over $1.9 billion and trades at around $2.8.
This marks an increase of more than 150% over the recent three months, making it one of the strongest performers cryptocurrencies.