Blockchain-based technologies, in an attempt to solve current economic, industrial as well as corporate problems are working hard to develop stable and reliable solutions integrating physical reality and traditional organizations into the blockchain era using various patents of distributed ledger technologies. One of the most promising start-ups involved in the creation of universal smart-contracts that not only combine blockchain platforms with physical organizations but also blockchain with blockchain would be Qtum. Let’s take a look at their White Paper and analyze Qtum’s mission and vision of a decentralized future.
Blockchain-enabled smart contracts that employ proof of stake (PoS) validation for transactions, promise significant performance advantages compared to proof-of-work solutions. For broad industry adoption, other important requirements must be met in addition. For example, stable backward-compatible smart-contract systems must automate cross-organizational information-logistics orchestration with lite mobile wallets that support simple payment verification (SPV) techniques. The currently leading smart-contract solution Ethereum (ETH) uses computationally expensive proof-of-work validation and is expected to hard-fork multiple times in the future requiring downloading the entire blockchain. Consequently, Ethereum smart contracts have limited utility and lack formal semantics, which is a security issue.
Qtum fills the gap in the state of the art by presenting the Qtum smart-contract framework that aims for sociotechnical application suitability, the adoption of formal semantics language expressiveness, and the provision of smart-contract template libraries for rapid best practice industry deployment. We will showcase the Qtum utility advantages compared to the Ethereum alternative and present Qtum smart-contract future development plans for industrial use-cases and applications.
One of the primary goals of Qtum is to build the first UTXO-based smart contract system with a proof-of-stake (PoS) consensus model. The latter means the creator of the next block is chosen based on the held wealth in cryptocurrency. Thus, blocks are usually forged or minted instead of being mined, there are block rewards in addition to transaction fees and forgers receive a percentage of ”interest” for the amount of funds they stake.
Qtum is compatible with the Bitcoin- and Ethereum ecosystems and aims at producing a variation of Bitcoin with Ethereum Virtual Machine (EVM) compatibility. In opposition to Ethereum tho, the Qtum EVM is constantly backward compatible. Pursuing a pragmatic design approach, Qtum employs industry use cases with a strategy comprising mobile devices. That allows Qtum promoting blockchain technology to a wide array of Internet users and thereby, decentralizing PoS transaction validation.
In the UTXO model, transactions use as input unspent Bitcoins that are destroyed and as transaction outputs, new UTXOs are created. Unspent transaction outputs are created as change and returned to the spender. In this way, a certain volume of Bitcoins are transferred among different private key owners, and new UTXOs are spent and created in the transaction chain. The UTXO of a Bitcoin transaction is unlocked by the private key that is used to sign a modified version of a transaction.
In the Bitcoin network, miners generate Bitcoins with a process called a coinbase transaction, which does not contain any inputs. Bitcoin uses a scripting language for transactions with a limited set of operations. In the Bitcoin network, the scripting system processes data by stacks (Main Stack and Alt Stack), which is an abstract data type following the LIFO principle or Last-In, First-Out.
In the UTXO model, it is possible to transparently trace back the history of each transaction through the public ledger. The UTXO model has parallel processing capability to initialize transactions among multiple addresses indicating the extensibility. Additionally, the UTXO model supports privacy in that users can use Change Address as the output of a UTXO. The target of Qtum is to implement smart contracts based on the innovative design of the UTXO model.
Again, in opposition to UTXO, Ethereum is an account based system. More precisely, each account experiences direct value and information transfers with state transitions.
An Ethereum account address of 20 bytes comprises a nounce as a counter for assuring one-time processing for a transaction, the balance of the main internal crypto fuel for paying transaction fees called Ether (ETH), an optional contract code and default-empty account storage.
Qtum seems very promising and as for “can it replace Ethereum or Bitcoin?”, Qtum is not trying to replace any existing platform but attempts to provide solutions created after studying earlier generation blockchains and their infinite issues regarding speed, fees, scalability, reliability, and other major functional aspects of a universal platform.
Qtum has already a huge list of active DAPPS using the Qtum Network, covering from artistic projects to digital wallets and dating apps.
The most exciting and promising Qtum project tho would be their partnership with Space Chain, whith whom Qtum is planning to launch the first Qtum full node literally in space as a satellite. The event is planned for tomorrow and you can learn more about it here.
What you guys think about Qtum, could it really be something special that will gather various blockchain platforms into one ecosystem? Let me know your thoughts in the comments below.