It is evident there are some crucial differences between the top cryptocurrencies and their underpinning technology. Whereas Bitcoin and Ethereum share similarities, Tezos is often a very different creature. Numerous reasons exist to give this ecosystem a second glance, as things are shaping up nicely.
Tezos Foregoes Proof-of-Work
Given the recent concerns celebrities and scholars have had regarding Bitcoins energy consumption, it is only normal to see alternative consensus algorithms gain more momentum. Proof-of-Staker remains a viable option, assuming it is implemented correctly. Tezos leverages proof-of-stake to bring its estimated annual TwH consumption down to 0.00006. Whether that number is realistic remains unclear, but it is evident PoS is more viable from an “energy-efficient” viewpoint.
Smart Contracts Are The Way
In this blockchain industry, not supporting smart contracts can be a death sentence for particular ecosystems. Bitcoin does not have [much] smart contract functionality by default, although the Rootstock sidechain can provide valuable tools. Tezos has native smart contract support, making them more accessible than through a sidechain or extra network layer. This puts it in the same category as Etheruem, and soon, Cardano.
Shielded Transactions Matter
Neither Bitcoin or Ethereum provides any degree of privacy to the user. Pseudonymity is far from the same, although it is better than having personal information out in the open. Tezos leverages shielded transactions to let users achieve a degree of privacy that isnt present in other major ecosystems. It is a “bonus” for those who prefer transactional privacy in the current financial landscape.
Tezos Can Upgrade Without Forks
Introducing new features, parameters, or other changes is always tricky with blockchain technology. Performing changes will usually require a soft fork or a hard fork. The latter option is tricky, as it can lead to network splits. Tezos‘ approach is different, as its network doesn’t require forks to introduce upgrades and changes. Additionally, upgrades happen roughly every 2.5 months; thus, a smooth and frictionless upgrade path is preferable.
Supporting All Big “Trends”
It is no secret that Bitcoin is currently incapable of supporting DEXes, stablecoins, and NFT marketplaces on its native chain. While developers can introduce sidechains for these purposes, Tezos has everything built-in at the core protocol. Moreover, it beats Ethereum on NFT minting fees, as it costs just $0.5 to do so on Tezos. A competitive edge in the Non-Fungible Token space is crucial, as this market segment can empower billions of people globally.