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Is Tezos a Good Investment in 2022?

XTZ, Tezos' native utility token and cryptocurrency, exploded into the crypto market in July 2017 with a very successful initial coin offering (ICO). In the process, Tezos raised $232 million.

Is Tezos a Good Investment in 2022? iBase Trading.
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XTZ, Tezos’ native utility token and cryptocurrency, exploded into the crypto market in July 2017 with a very successful initial coin offering (ICO). In the process, Tezos raised $232 million.

However, the token’s distribution was delayed because of conflicts between the creators. XTZ is currently the next big thing in the crypto business, and those dark days seem to be long gone. Of course, this isn’t the first time something has been said about a cryptocurrency. Is the hoopla around Tezos’ future justified, and is it a smart investment?

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The Tezos Differences

Users can make decisions and influence the ecosystem using the on-chain governance paradigm. Tezos is decentralized, and its primary goal is to allow stakeholders to express their thoughts on protocol updates in a transparent and democratic manner.

This means that without forking the network, changes can be made. Forking has the disadvantage of causing divides and arguments among crypto miners and the crypto community as a whole. Tezos intends to address this issue by allowing the bakers in the network to make their own network changes.

Unlike Bitcoin, bakers (validators) who create new blocks on the Tezos network are rewarded with XTZ. XTZ cannot be mined since bakers run on a full node to maintain the network. Staking XTZ for prizes is another way to gain XTZ. For staking incentives, a delegator (token holder) can delegate XTZ tokens to a baker.

Finally, XTZ intends to set itself apart from Bitcoin and Ethereum by avoiding hard forks, such as Bitcoin Classic or Ethereum Classic, which could jeopardize the blockchain’s future development.

Understanding How TEZOS and the BAKING Process Work

8,000 XTZ needs to work as a baker. Baking is the process of adding blocks to the Tezos blockchain when a person becomes a baker. The more XTZ a baker has, the more likely they are to succeed in obtaining rewards.

If someone doesn’t have 8,000 XTZ (or the processing capacity to bake), users can delegate the tokens to a baker if one doesn’t have it. Delegators can generate a considerable passive income through staking, even if they are not on the same level as bakers. The bakers get their tokens from the delegators, so they have a better chance of baking a block. The baker earns any extra XTZ and normally shares with the delegator.

Tezos is unique in that it may upgrade without the need for hard forks. This means that without forking the network, changes are possible. Forking has the disadvantage of causing divides and arguments among crypto miners and the crypto community as a whole. Tezos intends to address this issue by allowing network participants (bakers) to make their own network improvements.

Bakers can only vote on any changes. If a delegator disagrees with a baker’s position on a topic, they can delegate to a different baker who is more in line with their position. As a result, any bakers who do not vote in accordance with their delegators’ beliefs may lose their delegation authority. Furthermore, only bakers have the authority to submit changes to the protocol.

As a result, Tezos differs dramatically from more standard PoS systems, which allow each token holder to be a part of the decision-making process. Bakers vote on behalf of their delegated colleagues using Tezos. As a result, the Tezos blockchain’s Proof-of-Stake system is a form of Delegated Proof-of-Stake system (DPoS).

Investing in Tezos is a Good Idea

Several crypto specialists hailed Tezos’ long-term prospects as a boon. Examine what makes Tezos a good long-term investment.

Tezos does not have a maximum supply, which may surprise you. The majority of cryptocurrencies have a supply limit. Bitcoin, for example, has a 21 million dollar limit. In addition, there is a 5.5 percent yearly rate of inflation, which means that the quantity of tokens is increasing by 5.5 percent each year. You may believe that these elements have a negative impact on your chances. Because of the convenience yield, however, this is not the case. As a result, people tend to consider Tezos to be a valuable asset because of the advantages it offers. As a result, if Tezos has a legitimate purpose, its scarcity may become meaningless. In addition, the rate of inflation may motivate people to invest in Tezos, increasing the network’s security.

Tezos’ decentralized governance One of the most decentralized systems on the market is the Tezos blockchain. This means that the votes of the participants make changes. Carthage and Babylon, both with strong voter participation upgraded to the blockchain. A network’s stability comes from this level of involvement and improvement. Also, if there’s one thing that serious crypto enthusiasts actually enjoy, it’s the fact that it’s still decentralized, as Satoshi intended it to be.

“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”

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Abby Hernandez is an independent crypto writer for iBaseTrading. She is passionate about NFT, decentralization and anything related to blockchain technology. She has worked in the financial sector for 7 years and loves yoga and dancing.