¿What is QTUM and how does it work?

kanou (-2)(1)in #bitcoin • 7 years ago

Learn the most important thing about this new currency that has sneaked into the rankings as the second most traded currency in the last 24 hours with a growth of 128%. A rough way, QTUM = Bitcoin Model UTXO + Ethereum EVM Account Model, let's see in detail how and why this is important.

¿What is Qtum?

Qtum is a free-form Blockchain project developed by the Qtum Foundation, based in Singapore.

Qtum is a hybrid platform for creating blockchain applications, executable on mobile devices and compatible with most existing blockchain ecosystems.

Qtum's core technology combines a Bitcoin Core fork, an abstraction layer for accounts that allows multiple virtual machines, including the Ethereum virtual machine (EVM) and the consensus based on Proof of Stake, intended to address industry use cases.

The creators of this project believe that this will allow Smart Contracts and Decentralized Applications to run on a family basis, while offering a solid environment for developers. The underlying technology uses an "Account Summary Layer" (Account Abstract Layer), which acts as a bridge between the EVM and the unused transaction output model of Bitcoin Core.

There will be Oracle and Datafeeds functionality, which will allow developers to create Smart Contracts based on reliable information sources.

The Qtum Foundation plans to be the public blockchain for business. The development efforts will allow us to market this platform in various industries, such as: mobile telecommunications, protection against counterfeiting, finance, industrial logistics (shipments, guarantees, etc.) and manufacturing.

¿What makes QTUM different from other Blockchain projects?

The Qtum project offers many advantages for the Smart Contracts development community. This project is designed to implement the best parts of Bitcoin and Ethereum in a business-friendly blockchain. By implementing Bitcoin enhancement proposals, and by making use of the Ethereum virtual machine (EVM), it is expected that digital coin enthusiasts can agree to a platform that offers them stability and direction.

¿What is the benefit of the UTXO model with respect to the Accounts model (AAL)?

The account model is similar to a bank account. Each participant has a balance and a portion of their balance can be subtracted to increase the balance of another participant in order to send money. This model is conceptually easy to understand. However, to make this model work in a blockchain environment many pieces of logic must be added to avoid the problem of "double spending", where it is possible to spend the same funds twice. This logic makes the account model a bit simple internally and adds a lot of restrictions.

The UTXO model (Unspent Transaction Outputs) is similar to having an ecosystem built based on bank checks (without having a bank in the model, since the check itself is considered money). There is a field with information to "pay to" the one that provides how the money should be spent, and each check has an amount. You can not cash the check and say "pay me half the check and give me the check". Your "balance" is the sum of the checks you have available to spend. This model is more difficult to explain because each token or token has been "spent" or "not worn" and there is no intermediate state, but it is much easier to secure in a blockchain environment with less logic to maintain that security.

Each model has its pros and cons. Accounts are conceptually easier and smart contracts written with account abstraction tend to be much easier to understand. With UTXOs, however, it is easier to validate a transaction, which can be done simply by verifying that the transaction has been confirmed by the blockchain, as in the case of the SPV (Simple Proof Verification) protocol. The UTXO model has been tested for 7 years with Bitcoin without significant changes to its central model. It has also been proven to be more scalable and transactions can be processed in parallel with ease, which can be difficult with the account model.

With all this in mind, the Qtum team decided to build under the UTXO model, since this one is better aligned with their goals and that by adding an abstraction layer to represent accounts called Account Abstraction Layer (AAL) one could have the best of both worlds. All the benefits of security and interoperability of the UTXO model are gained, while smart contracts can be written as if they were based on the simple conceptual model of accounts.

¿Is it a fork of Bitcoin and Ethereum?

Qtum is not using bitcoin copied and pasted source code, the team has developed and increased its own version of Bitcoin Core which also has a Decentralized Governance Protocol (DGP). DGP allows QTUM owners to vote and activate changes in a limited number of blockchain parameters, for example, the size of the blocks, and the time between blocks without the need for hard forks.

Unlike Bitcoin, the Qtum consensus mechanism does not waste energy with Proof of Work, it is based on Proof of Stake, this means that it is not necessary to buy mining equipment to create blocks, the participants that have Qtum in their hands participate to generate the coins passively.

¿What gives value to QTUM?

Qtum derives its value in the same way that Ether derives its value. Both can be considered as fuel to execute smart contracts. This means that the more demand exists to execute contracts in the network, the more valuable the fuel will be, in this case the QTUM token.

¿How many QTUMs are there, how is the reward per block?

100 million QTUM tokens were created (under the ERC20 standard), 51% of the tokens were made available for sale on the main network (mainnet) when the public sale was made on March 16, 2017.

QTUM has an inflationary model, every time a block is created there is a reward for the miners, this means that there will always be inflation. This is necessary to encourage the owners of tokens to freeze a portion of their tokens and secure the network. It is important to remember that even though coins are generated with each block, the inflation rate decreases with respect to the total amount of coins in circulation given that the reward per block is constant, in the same way Monero works.

The reward per current block is 4 QTUM. The blocks are generated every 2 minutes. Approximately 2880 QTUM are generated daily.

¿How can I participate in the generation of QTUM?

To be a "miner" you do not need mining equipment, you do not need to put in an entire industry that only serves to waste energy, instead of buying mining equipment you simply invest as a "participant" and it's incredibly simple, everything you have to do is the next:

Send QTUMs to your portfolio.

Wait 500 blocks (approximately 16 hours) for the transaction to mature and you will be considered a participant with that amount of money.

Leave your wallet running. To participate in the process the portfolio must be running and communicating with other nodes in the network.

Each transaction sent to a QTUM portfolio takes 500 blocks to "mature" and be part of the "participation" process (think that now instead of "miners" there are "participants"). The weight of the network is the total number of mature QTUMs in participation. This weight determines the probability that 1 QTUM will mine the next block. The larger the weight, the lower the probability.

If an unspent transaction exit (UTXO) is selected as a winner to "undermine" the next block, it is considered to have been "participated" and is not considered for re-mining for the next 500 blocks. Therefore, it is advisable to punch your portfolio balance in multiple transactions, since the more mature transactions you have less QTUM are removed from the draw once you mine a block. Depending on how many QTUMs you have, it is good to have between 250 to 1000 QTUMs per transaction.