What Is Qtum?
Qtum is a cryptocurrency that combines Ethereum’s smart contract functionality with the security of Bitcoin’s unspent transaction output model (UTXO) to create a platform that is suitable for adoption by large organizations. Qtum was founded in 2016 by Patrick Dai, Jordan Earls, and Neil Mahl, and its initial coin offering (ICO) was held in March 2017.
- Qtum is a cryptocurrency that combines the security of Bitcoin's blockchain model and the flexibility of Ethereum's smart contracts.
- It uses a proof-of-stake consensus model for creating new blocks, which is far easier and less energy-intensive than Bitcoin's proof-of-work model.
- Qtum is designed for use by large organizations, with the goal of becoming integral to a range of industries, including finance and social media.
The founders of Qtum (pronounced "quantum") sought to combine some of the best aspects of both Bitcoin and Ethereum, with the goal of becoming a secure exchange for business-focused decentralized applications (dApps). Qtum hopes to disrupt the online transactions market and become an integral part of industries such as finance and social networking. Its currency is called a token.
One core element of Qtum borrowed from Bitcoin is the UTXO model, a sort of accounting system used by Bitcoin that provides a high level of transactional security. The UXTO system provides a type of receipt for unspent coins after a transaction. Qtum copied and reworked Bitcoin's UTXO code for its own platform.
Qtum borrowed smart contracts from Ethereum. Smart contracts are blocks of self-executing code that, once verified on the blockchain, carry out the terms of the deal, making the contract irrevocable.
Qtum, Bitcoin, and Ethereum
While Qtum borrowed from both Bitcoin and Ethereum, it differs from both of its much-bigger competitors in key ways. To begin with, Qtum deployed what it calls the Account Abstraction Layer (AAL), the technology that enables the use of smart contracts in conjunction with the UTXO model. AAL enables the UTXO and smart contract models to interact.
Qtum also uses a proof-of-stake (PoS) consensus model rather than the proof-of-work model used by Bitcoin. This makes it easier to mine new coins. Bitcoin’s PoW approach is resource-intensive, causing the computer networks mining its coins to consume more electricity annually than many entire countries. A PoS approach simplifies the process and results in much less power consumption.
With a PoS system, miners are chosen to verify blocks based on their own stakes in the system, rather than who can solve a complex math problem the fastest. The bigger the stake, the greater the user's chance of being selected to verify the transactions.
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