Overview of XTZ Coin from LetsExchange
For many years, Bitcoin (BTC) and Ethereum (ETH) have been the dominant coins in the crypto world. There are good reasons for this claim. Bitcoin was the first cryptocurrency to be publicly available for trading. Over the years, its price increased tremendously and became the most valuable cryptocurrency by market capitalization.
For its part, Ethereum is the second most valuable cryptocurrency. Also, it is the second most popular coin after Bitcoin. It is a platform for other cryptocurrencies and tokens. Lately, it has become the preferred platform for executing smart contracts. However, users have complained of the high network fees that Ethereum charges. That’s why other platforms offering similar services have increased their popularity. Tezos is one of them.
Tezos is a decentralized open-source blockchain. The services that Tezos offers are similar to Ethereum’s. It supports peer-to-peer (P2P) transactions as well as smart contracts. The native token of this blockchain is named Tez and has the symbol XTZ. This token is used for some payments in the network and governance. Tezos is attracting a lot of interest as a competitor of Ethereum. No wonder XTZ to BTC conversions and the other way around have increased lately.
The Role of the XTZ Coin in the Tezos Network
Arthur and Kathleen Breitman, a married couple, conceived the idea of Tezos in 2014. In 2017, the Tezos Foundation was created to support the project. This non-profit foundation based in Switzerland raised $232 million in a successful initial coin offering (ICO). Officially, the Tezos platform was launched on July 1, 2018.
Tezos features an on-chain governance model, which allows its community to vote on any upgrade to the network protocol. This model aims at preventing hard forks that would split the community. To upgrade the Tezos protocol, developers can submit their proposals to the community. XTZ holders have the right to vote on the proposals. If the community approves one proposal, the developer who submitted it gets XTZ tokens.
With the model described above, Tezos decentralizes network maintenance and development. Multiple factors like the increasing demand for non-fungible tokens (NFTs) have dramatically increased the number of transactions on this network. This rapid growth has benefited the XTZ price, which set its all-time high on October 4, 2021, at $9.18. Platforms like the Letsexchange – cryptocurrency exchange online have also seen greater demand for this token.
The high network fees on Ethereum have encouraged many NFT platform users to look for an alternative. Tezos has been the choice for Ubisot, a gaming-related NFTs platform. Also, FX Hash, a platform dealing with art-related NFTs, has begun using these alternative services. The number of smart contracts on the Tezos network went from 200,000 to 600,000 in 2021. This trend will only increase in the next few years.
Is the XTZ Coin a Profitable Investment?
The XTZ coin had impressive gains in 2021. It went from $2.0089 at the start of the year to a whopping $9.18 on October 4. However, the price hike of this token was not as steep as Ethereum’s. However, if Tezos continues attracting more users, its native token could appreciate more significantly in the coming years.
Any potential investor should remember that cryptocurrencies are highly volatile. Although most experts forecast bullish behavior for Tezos, one cannot consider a 100% safe investment. Not even Bitcoin is an entirely safe investment. But if one can tolerate the risk involved, XTZ can give good returns in the long term.
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