The altcoin explosion that occurred perhaps 5 to six years ago has seen many networks and tokens arrive on the scene. The ICOs gave the teams the chance to boost massive amounts of funds almost instantly and this was good and bad for investors, and good and bad for the market. In the shortest amount of your time , the teams went out of thin air to arrange global teams with their newly discovered funds, but the convenience with which they raised their funds and therefore the countless scams that occurred thanks to this attracted scrutiny of regulators round the world. world. Most investors probably also experienced both good and bad: they made tons of profits from the tokens that emerged after their ICOs and lost tons of cash from the tokens they simply never took after their ICOs, or worse, were scammed. At the height of Hurricane ICO, Tezos was born, raising a record sum of $ 232 million. He promised tons together with his blockchain solution, a network that was easily upgradable and backed by strong governance mechanisms. Modular architecture, intelligent applications in several status industries and a more open network governed the project development direction. The design principles certainly received tons of attention and were very promising for investors, but they need also been worried about some controversies surrounding their development and management. We examine the history of this project, how it intends to enhance the previous blockchain networks and therefore the difficulties it's had in its development and growth.

History of Tezos (XTZ)

![](https://cdn.steemitimages.com/DQmPeSWkwaUbAx8u8vefRdC7A9AVNHUoq98Pkr5JGar8epN/image.png) Based in Switzerland, Tezos (XTZ) was founded in 2014 by Arthur and Kathleen Breitman. Although it mostly caught the attention after its ICO. team itself explicitly states that the ideas that Tezos embodies were conceived long before the ICO in 2017. The team launched a "position paper" in 2014, at which time the Breitman hired a group of developers to work on the Tezos protocol. In about a year, the technical document of the project, with a functional prototype of the network shell launched a few months before. In 2015, Breitmans formed the company Dynamic Ledger Solutions, based in Delaware, which owns the right to code. In 2017, Tezos launched the public alphanet, which preceded the launch of the very covered ICO. The ICO raised a record sum for the moment. Without a maximum limit, Tezos raised $ 232 million, which, of course, pales in comparison to some of the ICOs that have followed, but for the moment it was amazing. This ICO and the fact that the XTZ token was considered a security would play an important role in the multiple collective demands that Tezos has faced, which we will discuss later. Tezos seemed to have a lot of credibility in his early stages, since, in addition to his attractive idea of making governance more democratic, they saw entrepreneurs like Tim Draper who supported it. The Tezos Foundation was formed in Zug, Switzerland, often called "crypto valley" for its blockchain friendly posture, after ICO, which would oversee the overall direction of the project. The specific agenda of the Tezos Foundation would be to support Tezos, related technologies and therefore the Tezos community. The funds raised also attend grants that encouraged the event of the Tezos protocol and associated technologies. In 2018,Tezos launched the betanet, after delays,which was followed by the mainnet launch in September.The XTZ and blockchain tokens were technically active in June of that year, but officially, users were given full control of the network in September. Between the launch of the alphanet and the betanet, the Tezos Foundation experienced problems with its administration, which would become the source of much discussion. This also worried investors a lot and invited some skepticism regarding the future of the project; we'll talk about this later.

The Purpose of Tezos (XTZ)

https://youtu.be/7m7EU4JWI88 "The amended crypto accounting book" is undoubtedly a catchy name and Tezos's agenda of achieving better governance, stronger security and the next generation of smart contracts has attracted the attention of investors. The project itself describes Tezos as "Tezos is a blockchain that can evolve by updating." The Tezos blockchain uses the Stake Test algorithm, which is called a "Liquid Stake Test" algorithm. The stakeout process is called baking. It differs from the EOS delegated participation test mechanism in that it can grant voting rights to other voters without transferring ownership. As described in the Tezos position paper, the design of the network places great emphasis on governance, that is, users are at the front and center when it comes to the direction the project takes. The other broad principle that guides the growth of Tezos is security. The governance model oversees almost all aspects of the network, and stakeholders vote on several aspects. For example, developers can send protocols for protocol updates, and they are rewarded if there is a consensus among the community. There is an initial trial period that sees a review of the protocol to detect possible failures. If you pass the test, the protocol is voted once more and there is a "hot swap" (essentially the update). Other notable features of the governance model include that stakeholders can delegate their voting responsibilities to others. By allowing your own "own cryptoledger to allow interested parties to coordinate on the forks," the forks cannot occur without the consensus of the network's stakeholders. This, according to the team, protects against centralization concerns that may arise from central development teams, which may be subject to an attacker. Smart contracts also form a large part of the Tezos network and are built using the Michelson language. Tezos smart contract systems "limit the maximum number of steps a program can execute in a single transaction," which the document says prevents denial of service attacks due to CPU usage. More technical details about the Tezos block chain can be read in the technical document. The project position document also suggests that privacy enhancement functions, through the ring and zk-SNARK signatures, may be implemented in the future. Controversies Tezos's first encounter with the controversy came, as mentioned earlier, with the fact that many of its investors had considered the token as a security, very similar to the drama that Ripple has experienced. Tezos had not registered with the United States Securities and Exchange Commission (SEC) as collateral, and this meant that it could not be legally sold to US investors. The lawsuits that had been filed largely had to do with the plaintiffs alleging that the project had defrauded and deceived investors. As this concern for the state of Tezos as security was developing, the Tezos Foundation was simultaneously experiencing problems with its management, and the then president of the foundation, Johann Gevers, who had been appointed to the position by the Breitman, was accused of hampering the development and progress of the project. The dispute apparently had to do with project control. Gevers resigned in February 2018, when several lawsuits were still in action, and was replaced by Ryan Jesperson. The dispute between Breitmans and Gevers delayed the project "indefinitely", although it was finally on track again. However, in conjunction with the lawsuits, the prolonged delay caused Tezos's reputation to suffer a considerable blow.

Controversies

Tezos's first encounter with the controversy came, as mentioned earlier, with the fact that many of its investors had considered the token as a security, very similar to the drama that Ripple has experienced. Tezos had not registered with the United States Securities and Exchange Commission (SEC) as collateral, and this meant that it could not be legally sold to US investors. The lawsuits that had been filed largely had to do with the plaintiffs alleging that the project had defrauded and deceived investors. As this concern for the state of Tezos as security was developing, the Tezos Foundation was simultaneously experiencing problems with its management, and the then president of the foundation, Johann Gevers, who had been appointed to the position by the Breitman, was accused of hampering the development and progress of the project. The dispute apparently had to do with project control. Gevers resigned in February 2018, when several lawsuits were still in action, and was replaced by Ryan Jesperson. The dispute between Breitmans and Gevers delayed the project "indefinitely", although it was finally on track again. However, in conjunction with the lawsuits, the prolonged delay caused Tezos's reputation to suffer a considerable blow.

Partnerships

![](https://cdn.steemitimages.com/DQmahJLzygina7gao4pkCQXfsrrdxTLjj5ymQoj1KmkYzgJ/image.png) Tezos has partnered with some important entities, especially in relation to Security Token Offers (STO), a current trend in the encryption market today. Security token offerings are similar to ICOs, but differ in that the investment money (which goes to real values) is backed by company assets or revenues. This is a more complex legal jurisdiction, so the projects that work in this space use a lot of caution. Just yesterday, the Tezos Foundation and tZERO, Overstock's security token platform, announced that it would be worth almost $ 650 million in real estate in the Tezos blockchain. The properties are funded by Alliance Investments, based in the United Kingdom. The first property to be tokenized is under construction in Manchester, England, and will be available in the first quarter of 2020. Tezos partnered with the Brazilian bank BTG Pactual, the largest investment bank in Latin America and the fifth largest bank in Brazil, in order for the bank to use the Tezos blockchain to issue STO, potentially with a value of $ 1 billion. Dubai-based asset manager Dalma Capital is also involved in the initiative. Tezos has also partnered with TokenSoft, another security token platform, to bring its institutional-grade services to the Tezos blockchain. This includes international compliance support, multiple signature contracts for digital securities and any features that may require formal Tezos mechanisms for a trouble-free update. Finally, Securitize, a compliance platform for digitizing securities, and Elevated Returns, a company that digitizes traditional assets, has also partnered with Tezos to issue real estate worth $ 1 billion in Aspen in the Tezos blockchain. .

conclusion

Tezos has promised a lot, but he also has a lot to accomplish. It is difficult to say at this time to determine the long term of the project. The project has had many doubts, which has given great success to its reputation. However, that doubt seems to have unduly diverted the fact that the development team has been working on the implementation of the features and architecture necessary for its goal of becoming a next-generation blockchain network and smart contracts strongly governed by its concerned parties. The turbulent period that Tezos has experienced has become largely calm, after changes in the level of management. Of course, cryptocurrency investors have a long memory and are unlikely to forget what happened, but if technical ambitions are achieved, the project will remain in a solid position as a network in the future. A future where a variety of smart contract solutions in various industries will find your home and be protected from any inconvenience that may occur through network updates through its modular architecture and formal update mechanisms.