

Explain it like I am Five:

With the Tezos proof of stake system, the coin holders earn rewards just by clicking a delegate button on their wallet, or by actually baking if they wish.

Working beta-net launch went off without a hitch

Code being developed since 2014 and audited by INRIA

Tezos facilitates formal code verification preventing Ethereum bugs that have cost millions

Decentralized democracy through online voting by users allows upgrades/scaling/amending etc. quite easily

Big money ($650-950 million is in the war chest to back the project)

Big time Backers including Olaf Carlson Wee, Tim Draper, and many others

Beta net currently running about 40 transactions per second (versus 15 per second on Ethereum) and transactions complete in 20-30 seconds with no transaction fees.

Now for something more in depth

1. Background

Since its inception as a drawing board concept in 2014, Tezos has not just looked at existing concepts and asked "why", it has actively considered alternatives and asked "why not".

These alternatives include democratic governance by users (rather than dominance by miners/blockstream), formal verification, an intensely security focused and proven programming language (OCAML), robust scalability, proof of stake that stubs its finger in the eye of the mighty mining community, opportunities for developer funding through a proposal system, Z-snarks privacy and a dedicated and experienced team in finance, programming and crypto. Many in the industry including Zcash's Zooko Wilcox, Emin Gun Sirer, and Bitcoin "OG" wunderkind Olaf Carlson-Wee have been early backers and advisors (Olaf now sits on the board of the Tezos foundation).

At the time of its ICO in July 2017 it was the highest grossing ICO of all time. Rumors are that the foundation has between $600-950 million to promote the Tezos chain (They have already allocated $50 million to fund projects building on Tezos). Since that time, devs have been working on the code. The code recently completed a rigorous audit conducted by INRIA. Tezos just recently launched the beta-net and is scheduled to launch its main-net in Q3. The Tezos tokens are currently tradeable on the Gate.io exchange and are almost certain to be listed on more exchanges in the near future.

As an investor, a big bonus of Tezos is that Tezos rewards its users for holding the coins through a "proof of stake system" where you can either "bake" or validate transactions yourself and be rewarded directly, or "delegate" to a more established validator and receive a portion of the rewards (currently at 5% per year inflation but with only a few people starting to bake so far, you are looking at over 37% rewards right now). With proof of work coins, you get nothing for holding onto your coins. My bet is that self-interest is likely to move many investors to proof of stake coins, where there is a better return.

2. DAPPS

Tezos is swerving left when its older Ethereum brother is veering right. The Ethereum model is to encourage "DAPPS": developer built apps on the Ethereum platform, but using their own coins. Tezos is effectively saying, build on our chain and use our coin - and you can still get funded.

On the one hand, Tezos is not permitting the kind of "flash and grab" shady, but insanely profitable, ICO's that we have seen of late where people seem to be reverting to the old travelling snake oil salesmen who pitch a wonder drug that is really only water. The ICO's that we have seen coming from Ethereum are basically selling guest passes to use their network but maintaining the equity for the system in a different company-this is not only a harbinger of significant future potential issues, its also, in my humble opinion, deceptive and unfair and my experience is that the universe tends to eventually deal with unfairness (call me an idealistic philosopher if you want).

Tezos has quite rightly not wanted to deal with that sort of practice and is building a much more supportable, fair and understandable route. It of course does not prevent companies from tokenizing their equity if they wish as well.

But that overlooks the arguably more compelling reason for the move: the network effect. Every time someone builds a DAPP on Ethereum, they raise money on Ethereum, dump it and then use a different coin - thus detracting from Ethereum's network effect (it's widespread use - which also affects the accessibility, convertibility and importance in the system of the main coin...as well as the price of the coin).

The importance of the Tezos move should not be overlooked. It remains to be seen if the Tezos model attracts the right projects, but it certainly seems as though it could and $50 million is no small sum to start with when the coin had not even launched yet.

If it isn't clear by now, I like Tezos....I really like Tezos and I have great admiration for the project. As much as I called for Ethereum to rocket in earlier articles (and it has), and as much as I called for a bull run in NEO (and it has went up between 500-600% since then), I have to say that Tezos is another project that I am very sweet on. It's difficult not to be a bit in awe of a project that has built a new system from the ground up, with solid and unique features, common sense and respect, and avoided the flash in the pan, get rich quick tendencies that so many others have fallen for. Further, a set of founders that love their chain more than their control - so much so that they are willing to set it free to the democratic mass is a thing of beauty.

Those who know me know that I like to invest in things with value, great teams and long term prospects. As a long term hold, it's very difficult not to be very excited about Tezos. I currently have 90% of my crypto portfolio in Tezos. To the moon!