Updated: Dec 20, 2019
Qtum cryptocurrency (pronounced ‘quantum’) successfully combines Bitcoin’s security with Ethereum’s smart contract functionality, to create a crypto coin that can be adopted by large organizations. The cryptocurrency is the first UTXO-based smart contract system, built with a proof-of-stake (PoS) consensus model. QTUM is the official cryptocurrency of the Qtum blockchain platform and serves the purpose of fueling transactions on the platform.
This guide will explain the purpose of Qtum, the team behind it, the way it works, and various uses and applications.
What Is Qtum Designed For?
Ethereum’s blockchain has been proven to be susceptible to hacks, as shown by several incidents over the years, while Bitcoin has proved to be relatively secure. However, Bitcoin doesn’t make mining easy. Its Proof-of-Work algorithm is not at all resource-efficient. Qtum is the answer to all these limitations.
It employs the Bitcoin core code based on Unspent Transaction Output (UTXO) principles, which is then run on an Ethereum Virtual Machine that uses an account-based model. The creators wanted to design a platform, which could effectively ensure that smart contracts could be utilized with a stable and secure blockchain.
The founders were committed to bringing blockchain technology to real-world applications in sectors like finance, Internet of Things, DNS, and gaming among others. This was envisioned to be achieved by creating an open-source community on a global level, with the cooperation of other blockchain communities.
Who Is the Team Behind Qtum?
Qtum was developed by a non-profit called the Qtum Blockchain Foundation, launched in March 2017. The foundation was established a year earlier in November 2016 by Jordan Earls, Neil Mahi, and Patrick Dai. The team has considerable experience having worked at Alibaba, Nasdaq, and Baidu.
The crypto coin QTUM takes the best elements from both Bitcoin and Ethereum to create an individualistic hybrid blockchain solution. This is probably why the project is backed by many successful investors, such as Anthony Di Iorio (Founder of Ethereum), Roger Ver, Xu Star (CEO at OKCoin), and Weixing Chen (Founder of KuaiDi), among many others.
How Does Qtum Work?
Qtum is an open-source, decentralized Blockchain platform. It is also a Value Transfer Protocol, which allows it to execute smart contracts on multiple individual virtual machines and also to run on Proof-of-Stake consensus.
Qtum uses an Account Abstraction Layer (AAL) to accomplish communication between Bitcoin’s UTXO principles and the Ethereum Virtual Machine which in effect hides the identities of transacting parties. It employs smart contract processing on one layer with value transfer capabilities on the second. This allows both Dapps and other financial ecosystems to flourish on the platform.
In simple terms, the platform adds all unspent coins from various transactions into a user’s wallet and then proceeds to select the next creator node, based on the number of coins held by all individual nodes.
What are Current and Future Applications of Qtum?
Decentralization is one of Qtum’s core characteristics. It facilitates the development of Dapps by allowing a diversified module for different users and systems. Qtum is currently working on a Mobile Go strategy, which aspires to bring blockchain tech to common internet users through Dapps.
By using PoS, Qtum can be more energy-efficient while mining cryptocurrency and provide a sleeker consensus, which allows it to focus on mobile-first applications.
Qtum Foundation partnered with Amazon Web Services, following which, it got listed on the AWS Marketplace. Amazon included the blockchain platform to beef up its offerings and compete better as a service marketplace with Microsoft Azure’s Blockchain.
The fact that Qtum is listed on Amazon’s BaaS platform is the best marketing it could have ever hoped for, which has allowed the blockchain to continue forging partnerships.
Some of these partnerships are extremely notable, which has allowed QTUM to surge forward. One such partnership is the three-way partnership with BTN Foundation and China’s 360 Blockchain Research Center, aimed at developing blockchain security, decentralized ledger technologies, decentralized computing, and storage technology among others.
Other partnerships include Philippines based Energo Foundation Pte Ltd, Mithril (a social media platform based on blockchain) and Bingo (a blockchain entertainment platform for developers, gamers, and publishers), among others.
The future of Qtum looks promising since it has plans to develop an additional layer for smart-contract specifications, ensuring industry adoptions. The developing team behind this blockchain platform reiterates that the additional layer will be successful in providing better security, as compared to a similar layer being built by Ethereum.
Qtum has successfully managed to achieve its purpose of bridging the blockchain world to the real world, by effectively utilizing Oracle and Data feeds.