Qtum coin is a cryptocurrency that aims to create decentralization through its technology. Today at BlockchainBiome, we look at Qtum coin, how Qtum coin works, Qtum coin prices and much more. This Qtum review provides you with thorough information about Qtum.
What is Qtum coin?
It aims to be the bridge that connects businesses and users in such a way that users begin to better accept decentralized services.
Qtum blockchain is to a large extent a decentralized platform and claims to be the most influential public blockchain in the world. Qtum is based on the UXTO model that is used by Bitcoin. It cleverly adopts a PoS (Proof of stake) mechanism and has actually adopted an improved version of PoS called the MPoS. This allows the network environment to avoid damages by malicious nodes.
Qtum has also developed the Account Abstraction Layer, or, AAL for short. The account abstraction layer is used to support smart contracts. They also have implemented a DGP chain management protocol that enables better maintenance of the decentralization concept. DGP stands for Decentralized Governance Protocol. This protocol also serves the network by reducing the ill effects caused by the fork.
Qtum Review: The Aim
Qtum’s mission is to create a variant of the Blockchain network with Ethereum Virtual Machine (EVM) compatibility.
Qtum aims to use a pragmatic approach and create Qtum EVM that is constantly backward compatible. The Proof of stake approach provides for greater efficiency. Qtum also aims to enable true decentralization. It also hopes to enable the creation of decentralized applications rather easily.
UTXO- Unspent transaction output
Qtum is based on the UTXO model. But, what is it exactly? Simply put, an unspent transaction output is the output of a transaction that is not spent and is generally used as the input to another transaction. Bitcoin is one of the currencies that uses this model.
UTXO works in a similar way to currency bills and coins. If you were to send a smaller quantity of Bitcoin to someone, you cannot send half a UTXO to complete the transaction. You would have to send the entire UTXO. This is analogous to a currency bill, where you cannot send half of a $1 bill to pay for a $0.50 transaction. The rest of the currency is unspent and in the case of cryptocurrencies, that use this model, it is used up for the subsequent transactions.
Proof of stake
Proof of stake is quite different from Proof of Work. Proof of work requires monumental amounts of computational power. Blockchains that use proof of work, like most traditional blockchains, consist of nodes in the network that work to solve a cryptographic puzzle to validate transactions in the network.
This proof of work mechanism has cryptographic properties that ensure that the puzzle can be solved only through brute force. The process of solving the cryptographic puzzle is called mining. The node that solves the puzzle the quickest is granted a reward, which, generally is the cryptocurrency of the network. Nodes that involve in this process of determining the solutions to the puzzle are called miners. Proof of work is built in such a way that it is easy to validate, but, computationally expensive and difficult to solve.
In contrast, proof of stake blockchain has validators instead of miners. Nodes in proof of stake blockchain deposit a certain amount of cryptocurrency. This deposit is the stake of the node. The validators in the network are responsible for validating or forging a new node into the network. These validators are chosen based on the validator’s stake. The higher the stake, the higher the chances of selection. The node that carries out the validation of the transaction or the block gets the reward.
This Proof of stake system is largely considered to be better than proof of work. Proof of stake network would penalize a validator if the validator is found to have added fraudulent transactions. The entire stake of the node that validated the fraudulent transaction would be lost. Therefore, this system is considered to be secure. An additional favorable feature of a Proof of stake system is the fact that it consumes lesser power. There are no brute force computations involved making it more computationally efficient.
Qtum’s Proof of stake is an enhanced version and uses Proof of Stake version 3 (PoSv3). The implementation of Proof of stake that Qtum uses requires no minimum stake.
Qtum Account Abstraction Layer (AAL)
This feature allows the execution of smart contracts and is derived from the Accounts feature of Ethereum. This feature allows the Ethereum Virtual Machine (EVM) to run on top of the UTXO feature. Account Abstraction Layer works by abstracting the concept of Accounts away from the implementation.
All transactions in Qtum use Bitcoin’s scripting language. The AAL is responsible for adding a few opcodes to the Bitcoin script. It enables the creation, monitoring and handling of contracts. The process involves converting the UTXO transaction to EVM transaction. The EVM transaction is then processed. Like I have mentioned, UTXO can be generated from this transaction again. The UTXO then would get converted to another EVM transaction and after its processing, more UTXO can be generated. Account Abstraction Layer (AAL) then processes all these EVM transactions and adds these to the new block on the Qtum blockchain.
Decentralized Governance Protocol (DGP)
Decentralized governance allows for a successful political process to be applied to the blockchain network that enables consensus. It also allows for easier creation and handling of Decentralized Organizations (DAO).
The purpose of Bitcoin and other blockchain networks was to establish the distribution of power. There should be no entity or institution at the center that calls all the shots. The middlemen, such, as banks and financial institutions that control the transaction process had to be removed. The Decentralized Governance Protocol is a protocol that facilitates this intention.
There was a requirement for some form of governance to ensure consensus between the many stakeholders in a blockchain network. This is where the Decentralized Governance Protocol came into the picture. DGP provides a decentralized framework that allows users or nodes in a network to arrive at a consensus in a timely and efficacious manner.
The parameters in a blockchain network need to be agreed upon by everyone in the system. DGP uses a smart contracts system that allows consensus in these parameters. Some of these parameters include, but are not limited to, block size and gas fee.
Qtum and QRC20
In order to have a blockchain system with compatibility and high scalability, there is a requirement for a special kind of tokens called the non-fungible tokens (NFT). QRC20 is a fungible token standard. Many projects on the Qtum platform have used the QRC20 standard to build their own applications. Qtum plans on creating an NFT standard to encourage users to develop decentralized applications, or, DApps, using this standard.
Non-Fungible Tokens (NFT)
A token that can be uniquely identified is a non-fungible token. Tokens are digital assets that run on a pre-existing blockchain. Digital assets are generally of two types, coins, and tokens. Coins use their own blockchain network to operate. Examples of these include Bitcoin and Ethereum. These coins use the ledger to record the transactions. Tokens, on the other hand, are prone to use smart contracts to store their data.
These tokens can either be fungible or non-fungible. Fungible tokens are those that can be split and replaced. Fungible tokens, therefore, can be used to represent real-world entities that can be replaced, such as currency. QRC20 handles tokens that can be replaced and is, hence, a fungible token standard.
Non-fungible tokens aimed to solve a problem that was associated with fungible tokens. Fungible tokens are replaceable, but, many existing things in the world are so valuable that they cannot be replaced.
These non-fungible tokens went sensationally viral due to CryptoKitties, which, allows users to collect digital cats. CryptoKitties is a blockchain based videogame. It enables users to buy, sell, and take care of virtual cats. Each virtual cat was unique and its value on the market could either increase or decrease. The cats were uniquely identified using these non-fungible tokens.
Here, each cat is unique and is a valuable commodity. Hence, they cannot be replaced and can only be represented through non-fungible tokens. Non-fungible tokens cannot be split or replaced, and ensure the uniqueness of the commodity.
ERC721 and QRC721
Non-fungible assets also allow for maintaining the ownership of the commodity. All this data can be safely stored. The most popular standard for non-fungible tokens is, perhaps, ERC721. ERC721 specifies the interfaces for the non-fungible tokens.
ERC721 defines a few operations on non-fungible tokens. A couple of them are given below:
Mint: Mint operation is used to create a non-fungible token.
Burn: Burn is the opposite of mint, where, a non-fungible token is destroyed.
QRC721 is the non-fungible standard that Qtum hopes to create. This standard refers to the Ethereum’s ERC721 standard. Qtum intends on creating a toolchain and code template to establish the standard.
Gas model in Qtum
Miners in a blockchain network carry out mining in the hope of getting the reward. However, when a transaction loops, the miner would also be stuck in an infinite loop. The blockchain process is halted as a result. This is where the concept of gas in the network comes in.
Each EVM opcode executed on the network comes at a price. Each transaction has an amount of gas to spend. The gas that remains at the end of the transaction is refunded to the sender. Since each transaction needs gas, there is a need to specify a GasLimit. This gives the amount of consumable gas by a contract. Another parameter called the GasPrice determines the price of each gas unit.
Here is how it works. The smart contract is executed, and the EVM operations are carried out. At each step, it is checked whether the gas has run out or not. If the gas still exists, the contract carries out the execution. For each transaction, a specified amount of gas is exhausted. Once the contract is executed, the output is sent to the user and the miner gets the fee that he deserves. At the end of this entire process, if gas still remains, the remaining gas is sent back to the user.
If the gas needed for carrying out a transaction exceeds the gas available, all processes are reverted, and the gas is refunded to the user. This model was adopted from Ethereum’s gas model. There is, however, one difference. The gas price for each EVM opcode is significantly different than that of the Ethereum model.
Qtum in a nutshell
- Qtum aims to merge the best of both Bitcoin and Ethereum.
- Qtum uses a UTXO model that carries over the unspent output from one transaction to another.
- Qtum uses a more efficient Proof of Stake model.
- Qtum uses both Bitcoin and Ethereum which makes it easier for developers to move away from the platforms.
- Qtum enables the creation of decentralized applications (DApps).
- Qtum is considered to be nimbler than Ethereum.
- Qtum has an effective gas model.
- Qtum also has an account abstraction layer (AAL) that enables contracts.
- Qtum has an agile development model that helps its growth tremendously.
- Qtum’s Decentralized Governance Protocol ensures true decentralization.
- Qtum has a QRC20 standard for fungible tokens and aims to implement the QRC721 standard for non-fungible tokens.
- Qtum coin Reddit page also offers valuable information
How to buy Qtum coin?
Let’s move forward in this Qtum coin review and see how you can buy Qtum coin.
Qtum coin has its own QRC20 standard and can be stored in most cryptocurrency wallets. You can buy QTUM through the following exchanges:
Qtum can be bought with fiat currencies such as USD through the exchanges or can be traded with other cryptocurrencies such as BTC and ETH.
Should you buy Qtum coin?
Let’s see should you invest in Qtum coin or not!
Qtum aspires to build a future for blockchain and has so far been impressive. So, Qtum is definitely worth a punt. Here are some statistics with regards to Qtum:
|Market value||$2.09 USD|
|Circulating Supply||89,209,728 QTUM|
|Total Supply||101,209,728 QTUM|
*All values are consistent at the time of writing this article.
Wrapping up Qtum Review
Qtum is looking at the future of blockchain. It hopes to create a prosperous future for the technology. Also, Qtum’s investment in creating a standard for non-fungible tokens and its plans for DApps tend to suggest that Qtum is on the right path to success. So, this suggests that Qtum is keeping pace with the current technology and wants to stay ahead in the race. Qtum certainly has a lot of potentials.
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