What is Qtum (QTUM)?

What is Qtum (QTUM)?

Qtum (pronounced “quantum”) is a software cryptocurrency that aims to combine different parts of the Bitcoin and Ethereum design models in an attempt to attract application developers.

That's because, despite some similarities, Bitcoin and Ethereum differ in the specifications of how their blockchains operate and how they record and update user-held balances.

By trying a design that combines unique aspects of the two networks, Qtum intends to offer an alternative to Ethereum that can compete in programming while maintaining Bitcoin compatibility, offering something like the best-of-both-worlds blockchain solution.

The Qtum team believes this design will appeal to users looking to build applications running on a blockchain, Ethereum's main value proposition, allowing their creations to be traded similarly to Bitcoin.

However, users will likely find that Qtum also includes many other aspects of other competing cryptocurrencies on the network.

The Qtum cryptocurrency, QTUM, for example, is used to pay fees to those who help operate the network, and the newly created QTUM distribution is based on asset ownership.

QTUM coins also provide voting rights in your on-chain governance system, meaning if you buy QTUM you can influence the direction of software development.

On the official website, project leaders release detailed quarterly updates on the status of their development direction and overall finances.

Who Created Qtum?

What is Qtum (QTUM)?

Founded in 2016, Qtum was launched by the Qtum Foundation, a Singapore-based non-profit organization that develops and maintains the software.

In 2017, the Qtum Foundation held an Initial Coin Offering (ICO) in which it raised $15 million by selling 51% of the existing 100 million units of the Qtum cryptocurrency, QTUM.

The remainder of the supply was given to investors and the founding team or otherwise allocated to business development. Qtum software was released in October 2017.

Why QTUM Has Value?

The QTUM cryptocurrency plays a fundamental role in the maintenance and operation of the Qtum network and can be used to hold, spend, send or staking.

What is staking? Staking is a way to earn passive income through cryptographic coins in a virtual wallet. This is because, if you hold virtual coins for a certain period, you can win by validating blocks. Coin users are chosen at random to create a block.

As such, QTUM's main use case is to pay fees for running contracts on the Qtum blockchain.

Furthermore, by owning and betting on QTUM, users gain the ability to vote on network updates, with each vote being proportional to the amount of QTUM cryptocurrency they wager.

While the initial supply of QTUM was 100 million tokens, the protocol allows the re-mining of tokens in the amount of 4 QTUM per block.

Similar to Bitcoin, however, QTUM is sparse as the number of QTUM released in each block is cut in half every four years to keep the total supply finite.

Qtum Price

 

How does Qtum work?

To achieve its ambitious vision, the Qtum team modified the Bitcoin code to allow its software users to write Bitcoin applications. smart contracts of the Ethereum type on top of it.

Simply put, your base layer copies the Bitcoin transaction model (UTXO), while an additional layer on top operates similarly to Ethereum's virtual machine (EVM), the element that runs your smart contracts and decentralized programs.

Like Ethereum, Qtum built its own virtual machine that allows developers to write and run programs on its distributed network of computers.

Account Abstraction

The Account Abstraction Layer (AAL), Qtum's signature technology, is the element that allows Qtum's blockchain to communicate between these two layers.

By modifying the core Bitcoin code with a set of new commands, AAL makes it possible to create, execute and handle smart contracts that operate more like Ethereum.

Finally, AAL updates the blockchain ledger after processing smart contract transactions and adds each transaction to new blocks.

To keep your network in sync, Qtum uses a variation of the consensus proof-of-stake (PoS) consensus called mutualized proof-of-stake (MPoS).

In order for nodes to validate and process transactions, they must bet QTUM on a wallet. In exchange for validating, processing and recording transactions, these nodes receive a reward in the form of newly created QTUM along with transaction fees (paid in QTUM) included in a block.

Each new reward block is split evenly between the block producer nodes and the previous nine.

This reduces the likelihood of an attack by masking the reward value of the immediate block of potential attackers, the project says.

Why Use QTUM?

Qtum can be attractive to companies looking to launch new types of aplicativos in a blockchain. In fact, so far, there are a variety of projects that have done just that.

For example, Qtum has integrated its software into open offerings for developers from the Amazon Web Services China and Google Cloud Platform division, allowing users to run and run versions of the Qtum software in these sandboxes.

As such, investors may want to seek out and add QTUM to their portfolio if they believe the market will one day favor blockchains that are attractive to enterprise use cases.

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