Bitcoin is the most popular blockchain network that offers the best security in the crypto industry. And Ethereum is the second most popular crypto network best known for its smart contract capability. Both networks offer a range of features that make them a reasonable choice for different groups of people.
However, QTUM is another project that offers the benefits of both blockchain networks in a unique manner.
Why QTUM is Needed?
In 2016, the Qtum team identified the key limitations of Bitcoin and Ethereum and started working on introducing a platform that can offer the best features of both networks.
Although Bitcoin is the most secure blockchain network, it doesn’t support decentralized apps and smart contracts. Thus, Bitcoin users can’t enjoy the best of the crypto industry.
Similarly, Ethereum’s users have concerns about security and scalability because Ethereum uses the account model to keep a track of the balances whereas Bitcoin and some other blockchain networks use the UTXO model. The UTXO model is considered more secure and scalable among crypto investors.
What is Qtum (QTUM)?
Qtum is a blockchain network dedicated to accommodating the needs of Decentralized application developers by combining different parts of Bitcoin and Ethereum. Qtum offers smart contract capability while ensuring high-security levels by incorporating UTXO balance-tracking model.
The platform aims to become a solution that offers the best of both worlds. The Dapps developers can now enjoy the transaction model of Bitcoin while building innovative applications on a blockchain.
The developers can easily migrate their decentralized applications from Ethereum to QTUM because it’s an EVM (Ethereum Virtual Machine) compatible platform and supports Solidity.
Qtum Brief History
Qtum was introduced by a Singapore-based, non-profit software firm in 2016. The team raised around $15 million through an initial coin offering in 2017 by selling 51% of the total supply. The remaining tokens either distributed among project founders and investors. Similarly, a significant amount of QTUM tokens are stored for the project’s development.
The platform went live in 2017. Qtum introduces new features whenever some updates are made to Bitcoin or Ethereum. The platform adopted Bitcoin’s Taproot and Segregated Witness (SegWit) updates over the years. Similarly, it quickly started providing support for non-fungible tokens when Ethereum introduced this feature.
The best thing about the Qtum network is that it can easily adopt the features of Lightning Network and other similar platforms because it’s a UTXO-based protocol.
Key Features of Qtum
Ethereum’s transaction model is pretty much similar to a traditional bank account which makes it easier for users to complete the transactions. But it can easily become a victim of security threats. Therefore, Qtum uses UTXO which separately keeps a record of different transactions.
The UTXO model is strong enough to handle the double-spending problem. Similarly, it can finalize transactions more efficiently because each transaction contains an independent output.
Account Abstraction Layer
Qtum uses Account Abstraction Layer to fix the technical problems due to which developers don’t use UTXO on a smart contract capable platform. UTXO can’t record all the transactions requested by the smart contracts because it separately maintains a record of each address’s output.
The Account Abstraction Layer plays the role of a bridge between smart contracts and the UTXO. The transaction is processed through the abstraction layer and the data is then reported to UTXO.
Custom Proof-of-Stake Consensus Mechanism
In a traditional PoS consensus protocol, the users need to stake their tokens to become a validator. Qtums’ consensus protocol is almost the same but it delays the payment to avoid spam attacks. Moreover, the platform distributes the rewards among the current validator and the previous nine successful validators when a transaction is validated.
Thus, the hackers can’t calculate the exact amount of rewards distributed during a transaction.
Qtum introduced offline staking in 2020. It allows investors to become a validator or delegators without having to transfer their funds to the blockchain network. They just need to provide their wallet address to participate in the process. The platform introduces two groups of validators.
Super Stakers – These validators are responsible for validating transactions and they share their rewards with the delegators who share their UTXOs with them. The Super Stakers charge a fee from the delegators.
Delegator – The delegators send a smart contract to the super staker that contains the required information about their wallet address. The Super Stakers have the authority to decide whether to accept someone’s delegation or not.
Qtum calculates gas fees using an Ethereum-like model. The users can pay gas fees using their QTUM tokens. Similarly, they can participate in the transaction validation process by either becoming a super staker or a delegator. Moreover, the QTUM token holders can also participate in the platform’s governance by voting on several proposals.
The proposals are mostly about increasing or decreasing the gas fees and block size based on the network’s traffic. With a circulating supply of 104.5 million tokens, QTUM has a market cap of $321 million. It has a total supply of 107.82 million tokens that will be released through staking rewards.
QTUM ranks among the 200 best cryptocurrencies in terms of market cap.
Qtum is a unique blockchain network that offers the best of Bitcoin and Ethereum. It combines different features of these blockchain networks allowing users to enjoy their desired services without any compromises. It uses UTXO and a customized PoS consensus mechanism to provide a secure and efficient blockchain network.
If you need more information about how Qtum works, feel free to get in touch with us. We also invite you to subscribe to our Bitcoin weekly newsletter if you need regular updates about the crypto market.