Tezos is a new cryptocurrency and protocol. Similar to Ethereum, it is not only a currency but also a platform on which smart contracts can be created and run. A smart contract is simply a digitally coded contract that executes a transaction when certain terms and conditions are met. Tezos is a protocol which allows smart contracts to be programmed and executed; leading to the transfer of goods and services.

BettingWin has chosen to run its betting platform on Tezos. This means all transactions on BettingWin will take place using smart contracts created with the functionality Tezos has provided. There are many benefits to using Tezos above other current cryptocurrency protocols. Some of the advantages of using Tezos are discussed below in this article…

Governance

Governance? But cryptocurrencies are decentralised and anonymous right, why do they need to be governed? Well governance is a slightly misleading term. It isn’t synonymous with how a government works but rather is the way that decisions are made regarding the protocol. Up to this point, with most protocols, decisions regarding how the protocol runs are made by the team of core developers. An example of such a decision may be whether to run a Proof of Work or Proof of Stake as the fundamental mining algorithm (see below section on “Fundamental Consensus: Proof of Work vs Proof of Stake”).

This facet of those protocols means the strength of decision making and the direction the currency goes in is based in the hands of the few rather than the many. This is why hard forks (a term used whenever a section of the protocol’s community disagree with how the protocol is run and decide to use the open-source nature of it to create their own version) occur within certain protocols.

Tezos is different, however. The Tezos core development team make decisions pertaining the protocol by taking in a majority consensus among users of the protocol. Stakeholders of the coin get a chance to approve or disapprove of upgrades proposed by developers and in return the developer is rewarded with currency for voting on changes that gain majority approval. This gives a major incentive for developers to be clued in and connected with what’s going on in the cryptocurrency world and amend the network with the optimal changes ensuring that Tezos is always up to date, efficient and what the users want giving them a headway when competing against other protocols hence meaning that BettingWin and other Tezos based platforms will be rolling with the most clued in protocol based on their needs. A true digital commonwealth.

To read more about how Tezos is governed please see this link on Tezos’ official page.

Business Verifiable Smart Contracts: Michelson Programming Language

Tezos use a programming language called Michelson to code their smart contracts. I am far out of my depth to discuss the knitty gritty of the programming language Michelson and why using it in to program Tezos’ smart contracts is a benefit but what I can say from reading this article is that the use of Michelson ensures smart contracts are verifiable from a business stand point where goods and services are being transferred. This formal verification ability is not available in other protocols such as Ethereum and gives Tezos users, such as BettingWin, an advantage over Ethereum users.

Tezos also see smart contracts differently to other protocols. They believe they should be a means of implementing and verifying ‘business logic’ rather than being a ‘world computer’. This means that the smart contracts in Tezos are made to be business friendly. For companies like BettingWin this means they can check over what terms of the smart contract were carried out.

I highly suggest you read this article to understand more about this (it is a little complicated!).

Fundamental Consensus: Proof of Work vs Proof of Stake

The block-chain is like a stack of blocks. What each block actually is, is a record of a transaction that previously took place and holds all the relevant information pertaining the transaction. Once each block is stacked onto the chain it is kept there forever and can be looked up and verified whenever someone wishes (this is a feature that gives cryptocurrency more safety through transparency). Before blocks are updated onto the chain however, a consensus must be reached that the transaction is proper and correct. So how do individuals blocks get validated? Let’s say I transfer you 2 Bitcoins (or any other type of cryptocurrency) in return for some quantity of goods or services, This transaction must be validated and stored on the block-chain.

So the question is who validates the transaction and how?

The transaction is validated through a set of complex algorithms which verify its correctness and update the block-chain with its contents. This process is called Mining. In order to mine all one has to have is a computer with a strong processor and must run the mining algorithms. Miners are given units of the cryptocurrency in return for validating transactions on the cryptocurrencies’ network (adding blocks to the block-chain). There are two fundamental ways of validating transaction; Proof of Work (PoW)and Proof of Stake (PoS). I will briefly explain the two:

Proof of Work is like a race with the transaction to-be-validated being the track to run on. Miners across the network run the algorithms to validate it and whoever has the most processing power and validates the transaction first is rewarded with the cryptocurrency tokens. As you can imagine however, this approach can lead to monopolies in terms of who is in possession of the most electricity and power to run mining warehouses. Hence, another approach has been developed. Proof of Stake. This approach designates a single miner, known as the Validator, to validate the transaction. The Validator is selected based on how many coins they already own and their contribution to the currency. This algorithm is not perfect but it is a lot more economically and environmentally friendly than the PoW method which results in the waste of a lot of electrical power and leads to monopolies. You might think PoS also leads to monopolies based on who owns the most coins but a yearly inflation rate is set on Tezos meaning that every year new coin holders arise diluting the stake of the biggest stakeholders. Tezos uses the Proof of Stake approach. This approach can also lead to the formation of monopolies in terms of who owns the most coins but with a yearly inflation rate set, the total ownership of coins is dissolved each year leveling out the playing field. Proof of Stake is preferred in the crypto community.

Here are some advantages that Tezos has due to using Proof of Stake:

Saves energy and power (Proof of Work could use as much electricity as Denmark by 2020 according to this article)

It is a safer way of doing things because if a hacker wanted to sabotage the currency they would have to buy 51% of the currency

Tezos is at an advantage for implementing the PoS approach from the get go. Ethereum are at present attempting to change their entire network from Proof of Work to Proof of Stake, showing that it is the preferred approach in the industry. Tezos being ahead of the game and implementing PoS from the start gives them, BettingWin and other Tezos based platforms an advantage from the get go.

So the PoS verification approach allows anyone to verify a block with a relatively basic computer. As I said earlier, large amounts of electricity don’t need to be wasted! Even someone hosting the software with a Raspberry Pi at home can verify blocks in the chain! A further advantage to this is it increases the transaction speed on Tezos. Currently Bitcoin and Ethereum are rather slow at verifying blocks onto the chain limiting the scope of the applications built using them. This is critical to BettingWin as a global betting exchange wouldn’t be possible on Ethereum. Here’s why:

Imagine betting x amount of coins on a particular horse to win a race. This information needs to be sent out in a smart contract and the bet you placed needs to be verified. However, with current speeds by the time your bet is verified the race will be over already! This means live and real time applications are impossible (or very difficult) to realise on Ethereum and other block-chain platforms.

Summary

All in all this article has discussed why BettingWin is at an advantage for choosing the rising star cryptocurrency protocol, Tezos, to run its software on.

Tezos is a blossoming protocol since it is self amending through it’s novelty governance system meaning BettingWin will be running on the most updated and solid protocol available without any worry of a hard fork.

The language of Tezos’ smart contracts is specially used to verify details from a business standpoint. This helps BettingWin when it comes to verifying the correctness of bets placed on the platform.

Tezos uses Proof of Stake rather than Proof of Work as the block verification algorithm. Individuals are selected in a deterministic wayto verify blocks based on how many coins they already own. This makes the network more economically and environmentally friendly while also drastically improving the transaction speeds, allowing real-time platforms like BettingWin to exist in the first place.

It seems to me that BettingWin has chosen the right protocol to use for their platform by choosing Tezos. Let’s see what the future holds for Tezos and BettingWin!