What is Tezos?
Tezos is a permission-less, distributed, and also the self-amending platform which is utilizing smart contracts that focuses on providing a unique on-chain governance mechanism and a few noticeable improvements over similar platforms such as Ethereum. The main focus of the platform is on a modular design with trivial on-chain protocol upgrading through an optimized Proof of Stake consensus model whereas all stakeholders may participate in the governance structure.
The Network Shell
Tezos validate its unique governance and self-amending capabilities by leveraging a network shell. To make an understanding that how this Network Shell works we need to break down a typical blockchain protocol into 3 primary and distinct sub-protocols.
- Network Protocol
This protocol is specially referred to as the “gossip” protocol and how transactions are broadcast across the network between nodes. This protocol also involves downloading the blockchain, discovering peers, and broadcasting blocks to the network. On the normal protocol level, the network protocol usually comprises of the most innovation and development activity.
- Transaction Protocol
This protocol is designed by a cryptocurrency’s scripting language and in the case of, if any Bitcoin is better known as the Unspent Transaction Output Model (UTXO). Using Bitcoin as an example, this protocol comprises everything from the creation of Bitcoin during mining to the utilization of digital signatures for transaction verification. A transaction protocol is commonly referred to as a “soft fork”, and is usually not very contentious (at least compared to a hard fork).
- Consensus Protocol
It is probably the most significant as it articulates the model for reaching a consensus of the state of the blockchain across all the nodes in the network. Bitcoin applies as Proof of Work as its consensus model; although, Tezos uses an optimized form of Proof of Stake. This protocol is the sustainability and authenticity of the blockchain as it supports double-spending and makes the blockchain immutable. A fork of the consensus protocol is a “hard fork” and they are easily the most contentious. A hard fork tends to divide cryptocurrency communities with more high-profile cases (Bitcoin/Bitcoin Cash) and is a problem that Tezos fundamentally aims to solve with its design.
The governance of the Tezos is a platform which rests it entirely with the stakeholders. All stakeholders have the ability to participate in the governance of any protocol and they keep a vote on proposed protocol with upgraded issues by developers who can attach invoices with their proposed upgrades for them to be compensated if their proposal is accepted.
Smart Contracts & Formal Verification
It is another important feature of Tezos and its use of formal mathematical verification of programs in order to prove their security while mitigating against the prevalence of bugs in contract code. The main use of formal verification in conjunction with OCaml as the programming language is for refreshing improvement in the smart contract logic, which has led to a number of hacks including the DAO exploit and Parity wallet hack.
Proof of Stake Consensus & Baking
Tezos has this Proof of Stake implementation which is an optimized combination of various concepts including Slasher, Chain of Activity, and Proof of Burn. Preferably mining, Tezos uses what they refer as “Baking”. In baking, block created and is performed by the stakeholders who, Slightly performing PoW to solve a computationally difficult puzzle, obtain the right when a Tezos token (Tezzie) that means they have it as randomly selected to create a block.
Final take on Tezos
Notwithstanding a certifiably uncertain beginning, Tezos has now launched their Beta version and with this, it offers some promising innovations, especially in governance platform. Governance of blockchain networks is amidst one of the most arduous tasks to take on as it is a completely novel field which consists of creating sustainable and fair governance mechanisms for vast networks of decentralized users.