Qtum: Cryptocurrency Blockchain Collaboration
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Qtum is a cryptocurrency and blockchain founded by Patrick Dai in early 2017. A record smashing ICO raised 15.6 million in only 5 days. Now the team based in Singapore are working on a bridge between Bitcoin and Ethereum. Qtum want's to combine the functionality of both cryptocurrencies and make a smart contract platform with the immutability of Bitcoin. Qtum have put their own spin on things and use a proof of stake blockchain that is faster than both Ethereum and Bitcoin. This positions Qtum nicely as a viable platform for enterprise targeted blockchain solutions, ICOs and value exchange.
Qtum ExplainedQtum (pronounced Quantum) is an open-sourced value transfer platform which focuses on mobile decentralized apps or DAPPs. What’s interesting about QTUM is it utility comes from bridging the two most popular cryptocurrencies, Bitcoin and Ethereum. Bitcoin is a cryptocurrency in the purest sense. It was designed to be a value transfer network. Ethereum is a smart contract platform. In March 2017, QTUM ran an ICO pitching something different. “QTUM sold over 10 million dollars’ worth of its tokens after only 90 minutes, eventually raising a total value of $15.7 million before stopping the campaign early after only 5 days. They raised a total amount of 11,156.766 bitcoins (BTC) and 77,081.031 ether (ETH) in exchange for the 51 million Qtum tokens being distributed to the public.” - What is QTUM QTUM runs smart contracts and transfers value on a fork of the industry’s most tested Proof of Work cryptocurrency. It has the same use case as Ethereum and Bitcoin: dapps, decentralised computing, value exchange and running smart contracts.
Qtum’s Marketing Focuses on Enterprise Client“Their goal is facilitating the transition from legacy systems in aging organizations over to blockchain-based solutions that increase automation and decrease cost.” CoinCentral There isn’t any aspect of the technology that makes Qtum especially suited for this use case, but corporate blockchain based solutions will have high transaction volumes; and while it is a competitive niche in which dozens of blockchains solutions are rapidly becoming useful, it is an industry that’s worth billions and would benefit from blockchain technology. Existing Ethereum smart contracts and dapps can quickly be implemented on Qtum. Since blockchain technology isn’t regulated, Qtum’s entire use case could be stealing from Ethereum and making transaction fees cheaper. Unethical? Maybe, but still very valuable.
How Does Qtum Work?Critics of Qtum, say it is nothing more than Ethereum + Bitcoin, but that is really powerful idea. QTUM uses a proof of stake protocol to forge blocks. Unlike Bitcoin and Ethereum, coins on the Qtum blockchain aren’t mined and hashed with proof of work. Instead blocks are called up with a function and pseudo-randomly allocated to validators to vote on their legitimacy. A validator can be anyone, but they need to stake an amount of Qtum. Because of its similarity to Ethereum, you might expect Qtum to store staked coins in a smart contract, but Qtum instead uses basic Bitcoin Script opcodes and transactions to track stakes and funds created. Qtum does not require locking your coins. It only requires that the coins mature for about 20 hours before they can be used for staking.
Staking Qtum Coins“For each block generated on the Qtum blockchain (one block every 2 to 3 minutes), a 4 QTUM staking reward will be given to a Qtum network wallet/node that is staking coins. There is no minimum amount of QTUM coins that you need to stake, but the likelihood of receiving the staking reward depends on how many QTUM coins your wallet/node is staking (relative to the other wallets/nodes on the Qtum network).” - Cryptominder Qtum Staking Tutorial Rather than using computational power, the blockchain is secured by asking network participants, who are already heavily invested in Qtum, to vote and continue the validity of the chain.
Qtum’s Nothing At Stake SolutionAn interesting difference between staking on the planned Ethereum network and Qtum, is explained in this statement made by a Qtum team member on Reddit. “ Qtum plans to provide a different solution to the nothing-at-stake problem and will never punish stakers that misbehave other than kicking them off the network. We believe no software can be made perfect, and so the risk of a bug causing the staker to misbehave and lose millions of dollars is unacceptable to us” - Qtum's nothing-at-stake solution will be implemented in 2018 and will be an optional consensus feature (ie, no fork etc required). Basically, we will put some data on the Bitcoin blockchain that can be later verified through SPV. This makes it so that it is impossible for an attacker to lie about when a particular block was created, which is the biggest vector used to construct a nothing-at-stake attack setup. “
Qtum’s Account Abstraction Layer
If you are familiar with Bitcoin and Ethereum, you might know that fundamentally the technology behind the two cryptocurrencies is different. Bitcoin uses something called UTXO. See the Bitcoin blockchain doesn’t record account balances. When you open your wallet and see that you have 0.4 of 4000 BTC you are seeing a number ascertained by the wallet from UTXOs. Unspent Transaction Outputs are exactly what they sound like. Into every block goes an input and out comes an output. When you include a transaction on the blockchain, that transaction is there forever. It will be included as a unspent transaction in different blocks until you spend it. Ethereum on the other hand, is account based and it keeps a record of an account balance. Account based blockchains are easier to write code on. Smart contracts are just accounts. What Qtum has done is made smart contracts possible with UTXOs. Qtum did this through an Account Abstraction Layer. The AAC communicates with an Ethereum Virtual Machine, through a very technical process but one which has precedence in computer and network programming.