By default, different blockchains are incompatible, but the developers from the Qtum team managed to realize the impossible by combining the best qualities of Bitcoin and Ethereum.
The main goal of Qtum is to provide convenient and simple tools for companies to create decentralized applications, while ensuring high network security and reliability. First of all, the main areas of the project will be applications for finance, the Internet of Things, and supply chains.
In this article, we will examine in detail what the innovation of this coin consists of and how the developers managed to integrate completely different blockchains with each other.
History of creation
Qtum cryptocurrency is a Chinese project that was launched in March 2017. Like most projects, the launch took place through an ICO. The token distribution procedure began on March 16. Investor interest was so high that in the first 10 minutes after the start of the crowdsale, more than 5,000 BTC were collected. A total of 100 million QTUMs were generated, 51 million of which were sold to investors at the ICO. At the end of the sale, the project managed to collect 11156.766 BTC and 77081.031 ETH (at that time about $ 15.7 million).
Despite the fact that initially the deadlines were set at 30 days, all tokens were sold within the first 5 days. The distribution of coins was as follows:
- ICO participants – 51% (51 million QTUM);
- Developers, founders, investors – 20% (20 million QTUM);
- Qtum Fund – 20% (29 million QTUM);
- Educational projects, research, market expansion – 9% (9 million).
The team announced its plans for the release of another 1% of tokens in the future. At the moment, it is not known how they will be distributed. However, there is a chart in White Paper that displays the distribution of tokens 3-4 years after the project is launched.
Initially, the project was created as an ERC20 token, but after three and a half months the team launched the first public test network Sparknet, and after another two and a half – the main one, which was called Ignition.
One of the main advantages of Qtum is its strong project team. It consists of specialists who have experience in such large and well-known companies as Alibaba, Nasdaq, Tencent and Baidu.
- Patrick Dai is a co-founder. He studied at Draper University and received a master’s degree from the Chinese Academy of Sciences. In the past, he worked at Alibaba Corporation.
- Jordan Earls is a co-founder and lead developer. A famous person in the crypto community. Has been programming since 13 years.
- Neil Mahi is a co-founder. He has 20 years of experience in programming and 4 years in the blockchain sphere.
Among investors Qtum also famous personalities:
- Antonio Di Iorio (Anthony Di Iorio) – founder of Ethereum and CEO JaxxWallet;
- Chen Weixing – billionaire and founder of Kuaidi;
- Jeremy Gardner is a co-founder of Augur.
Qtum cryptocurrency runs on a hybrid blockchain built on separate elements of Bitcoin and Ethereum. From Bitcoin, a UTXO transaction confirmation method (unspent outputs) was taken, which is the most reliable of all existing at the moment. Its advantage is that it allows you to avoid double spending with 100% probability. Why? The scheme of work is very simple: for example, there are 5 BTC on the wallet, and the user wants to send 1 BTC. In this case, it transfers 1 BTC to another user and 4 BTC to itself back, i.e. When sending coins to a wallet on the Bitcoin network, there will always be two inputs.
Why didn’t the developers choose the simple way and the simpler Ethereum transaction confirmation model, which uses tracking of account balances (like regular banks)? As the developers themselves explained, the UTXO model is not only more secure, but also more scalable, since it allows you to simultaneously check multiple transactions, regardless of the sequence of entering the state of balances in the blockchain.
However, the choice in favor of UTXO posed a very difficult task for developers – the need to integrate this model into the Ethereum virtual machine. In theory, this is impossible, but the team used a special technology called “Account Abstraction Level”, which allowed us to combine UTXO Bitcoin and Ethereum EVM. “Account Abstraction Level” is a technological blockchain innovation created specifically by Qtum. Despite the difficult technical implementation, the principle of operation is very simple: a special algorithm converts UTXO into account balances, making them compatible with Ethereum.
You can run smart contracts on the Qtum cryptocurrency blockchain, but they offer more advanced features than ordinary Ethereum smart contracts. The developers themselves called them master contracts. Several popular programming languages can be used to write them: Python, Rust, Go, C ++, Lua.
Their main difference from ordinary smart contracts is that they are able to instantly respond to external circumstances. In White Paper, the principle of the work of master contracts is explained as follows: imagine the situation that the goods need to be sent from point A to point B. In an ordinary smart contract, only two states can be recorded: “completed” and “failed. The master contract allows you to connect another user registered on the Qtum network, for example, a freight carrier. The system will track all movements of the goods, as well as all actions of the carrier (for example, when he took the goods from the warehouse, whether the goods were transferred to another carrier, etc.). All information is forever recorded in the blockchain, and the user can track all actions online.
Another feature of master contracts is that they are compatible with the Internet of Things and mobile devices. Smart contracts are not suitable for this, since they all work with the PoW consensus algorithm, which requires a lot of computing power from the devices. Master contracts are implemented on a special subset of the PoS algorithm, which the developers themselves called Proof-of-Stake version 3.0. Smart contracts for PoS is another technical breakthrough implemented by the Qtum team.
Despite the fact that the Qtum cryptocurrency is a “hybrid” blockchain resulting from the connection of Bitcoin and Ethereum, which use Proof-of-Work (PoW) as an algorithm to achieve consensus on the network, Qtum’s work is based on Proof-of-Stake version 3.0 , which was mentioned just above. This fact makes QTUM mining more accessible, since you do not need to have expensive ASICs to participate.
The Qtum mining algorithm differs from other coins that also use PoS in that the “random effect” plays a decisive role in it, rather than the number of coins held. Each QTUM in the user’s wallet is a lottery ticket, which gives a chance to create a new block. Now the block generation time is 2 minutes, and the reward is set at 4 QTUM. According to the team, neither the speed of creating blocks, nor the amount of remuneration will be changed in the future.
Advantages and disadvantages
Qtum is one of the most advanced and technologically interesting cryptocurrencies. It has a number of advantages:
- Innovative technical developments are the first coin in which different blockchains are integrated into each other. Also, on Qtum, you can deploy smart contracts using an ordinary smartphone – no other coin provides such an opportunity. In addition, master contracts have more advanced options;
- Absolute compatibility with IoT and mobile devices – thanks to the use of a special consensus algorithm, you can fully use the network even on ordinary tablets and smartphones;
- Availability of mining – since the chance of generating a block does not depend on the number of coins held, but is determined in a random way, everyone can participate in mining;
- Ease of creating “smart” contracts – the platform supports several popular programming languages, so finding a specialist to create a smart contract will be quite an easy task;
- High level of decentralization – thanks to the implementation of the DGP protocol, participants can vote for changes to the platform, as well as propose their projects. At the same time, activation of updates requires the consent of most participants;
- Responsible approach of developers – the team strictly follows the plan prescribed in Roadmap, a significant amount of fundamental work has already been completed.
Regarding the shortcomings of the Qtum cryptocurrency – there are none as such. However, Ethereum developers expressed doubts about the reliability and correctness of the UTXO + EVM bundle, and said that they themselves refused this choice, since these technologies are incompatible. But experts did not announce any details. Despite their doubts, in Qtum this hybrid technology works perfectly.
There is another case that casts a shadow on the reputation of this cryptocurrency. He is associated with the personality of one of the founders – Patrick Day, who has a ‘gray’ past. Before creating Qtum, Patrick (then he had the name Stephen) worked in the BitBay project (a trading crypto platform). However, at the end of 2016, Stephen leaves the team and changes his name to Patrick – for what purpose he did this, is still unknown. In addition, BitBay founder David Zimbek accused Day of stealing 20,000 BTC, but no evidence was provided.
Despite the fact that the Qtum cryptocurrency is still a very young project, it already has several partners:
- Amazon – cryptocurrency has been added to the blockchain platform from Amazon AWS, where users can work with different coins, including Qtum. In addition, Qtum Foundation specialists will assist those AWS customers who do not have their own blockchain programmers.
- Oath – the integration of this protocol into the Qtum blockchain will lay the foundation for resolving disputes within the network and will provide an additional level of user security.
- Celer Network – as part of the collaboration, it is planned to integrate the Celer Network, which is a second-level protocol, into the Qtum blockchain. Celer Network will act as a sidechain and provide improved network scalability.
Cryptocurrency Qtum offers one of the most interesting blockchain technologies, the analogues of which are not yet found in the entire “cryptocurrency space”. In addition, Qtum, such as Ontology, is designed for a business audience, which gives it certain advantages over other coins. Despite the relatively young age of cryptocurrencies, several projects have already announced their readiness to launch on the Qtum platform, among them: Space Chain, MediBloc, Energo, CFun, Halal Chain, BitClave, Qbao.
The developers also showed themselves on a positive side: six months after the ICO, the main version of the network was launched and official wallets were presented. The team continues in the same vein and clearly follows the plan outlined in the roadmap.
Some questions are raised by the management’s plans regarding the issue of an additional 1% of tokens – so far no clear explanations have been received on why new coins will be issued. Also very vague is the personality of Patrick Day, who changed his name before launching Qtum. He refused to comment on this, and so far this story remains a mystery.
Be that as it may, the QTUM cryptocurrency is a very interesting and promising technology, which is a real breakthrough in blockchain development. However, the coin itself is currently experiencing difficult times – since the spring of 2018, you can see a smooth drop, which continues to this day, now the project has reached its historic minimum. But time will tell whether investors will appreciate the innovations that Quantum carries.