Tezos is a public, open-source blockchain protocol relying on a low power consumption and energy-efficient consensus.
The protocol also incorporates a self-amending governance system, which allows continuous improvements while preserving the integrity of this consensus. This is a rare feature that eliminates hard forks troubles.
Tezos is also fundamentally designed to provide code safety through Formal Verification.
In this module, you will learn the basics of Tezos needed to understand the Tezos philosophy and structure. Later on, you'll be able to create your applications to contribute to the network.
In this chapter, you will learn the context of Tezos's creation and how the fundraiser took place to benefit from the best network effect of an all-new and innovative blockchain.
Arthur Breitman knew the main weaknesses of blockchains like Bitcoin and Ethereum and wanted to address them:
- their "hard forks" were highly complex and risky processes to update blockchains by splitting them into two
- the heavy uses of Proof-of-Work consensus is highly energy consuming and concentrate this activity on mining facilities
- the lack of code verifiability (see also "testability") of the main smart contract's low-level languages, reducing trust in the reliability of code
His goal was to keep the best bits from these early blockchains and overcome their existing defects.
From March 2014 to July 2017, the company OCamlPro , hired by Arthur Breitman, took on the project of developing a Tezos prototype. The platform was thus written in their preferred language OCaml, an esteemed programming language in research.
The Tezos fundraiser
On July 1st, 2017, Tezos launched its fundraiser as a call for donations. When the blockchain coins were created, donators received coins according to their contributions. This kind of open process allows for the dispatching of coins between as many users as possible. It also involves them in the launch of the blockchain.
This is especially important in the case of blockchains using Proof-of-Stake: the more different users have coins, the less centralized on early adopters the network is (more details in the Liquid Proof-of-Stake chapter). The distribution thus allows the network to be operational and robust much earlier. The money collected is also used to update the blockchain and, especially for Tezos, finance an entire ecosystem.
The coins allocated to the fundraiser's contributors were (and still are) only activated if they provided full KYC information. In mid-November 2020, Tezos identified around 94% of all funds. In a few cases, the full requested information delivery didn't happen, and thus neither did the respective coins activation. On the contrary, contributors who delivered all the required information received activation.
The Tezos fundraiser was a complete success: it stayed live for only 13 days and gathered 66,000 bitcoins and 361,000 ethers. At the time, this was valued at 232 million dollars ($230,000,000). Currently, with cryptocurrencies' success, this value is much higher.
The total supply was the number of coins issued during the fundraiser. Unlike, for example, Bitcoin, the total supply of Tezos coins has no limit. The Tezos coins are called "Tez" and their symbol "ꜩ" (\ua729, "Latin small letter tz"). The symbol "XTZ" is also used, especially on markets.
To promote Tezos, the founders created the Tezos Foundation. Based in Switzerland, its role is to help the network expand. It has no control over the blockchain and doesn't manage the Tezos network. Since the fundraiser, it used funds to support beneficial projects for the Tezos community's . The Tezos Foundation supports the community and deploys resources to support Tezos's long-term development.
The Tezos project has an established history of upholding and cooperating with educational and research institutions, developers and activists, who support it from all over the world.
Tezos key points
Compared to previous blockchains generation (mainly Bitcoin and Ethereum), Tezos stands out through 3 main characteristics:
- Self-amending governance: avoiding hard forks (e.g. Ethereum / Ethereum Classic)
- LPoS consensus mechanism: consuming far less energy
- Smart contracts codes can be written with "Michelson" language: facilitating Formal Verification
What have we learned so far?
In this first chapter, we learned about the context of Tezos's creation and its aim to enhance the capabilities of blockchains. We also learned how the fundraiser took place and how the community uses it to promote the network.
In the next chapters, we will guide you through the basics of Tezos, from its consensus algorithm to your first interactions with it.