Tezos Blockchain – A Simple Overview For Beginners
Tags: crypto, cryptocurrency, tezos
Published: 2020-04-29 13:23:47

---
title: Tezos Blockchain – A Simple Overview For Beginners
published: true
date: 2020-04-29 11:08:51 UTC
tags: Crypto,crypto,cryptocurrency,tezos
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Tezos is one of the emerging blockchain networks and has made quite an impact in the crypto domain. It is the first blockchain network to introduce the self-amending protocol.

Rewinding back to 2018, Tezos Blockchain is developed by ex-Morgan Stanley analyst Arthur Breitman.

It is implemented in the OCaml programming language.

The native coin of Tezos is ‘tez’ or a ‘tezzie’. The symbol of Tezo’s cryptocurrency is XTZ.

It supports smart contracts just like Ethereum and uses Proof of Stack as the consensus protocol.

Coming to the present, the market cap of Tezos is $1,796,980,119 and has one of the largest growing community.

**[What is Tezos?](https://blog.coincodecap.com/tezos-cryptocurrency-an-ultimate-guide/)**

[Tezos](https://www.tezos.com/) (ꜩ) is a smart contract platform like [Ethereum](https://blog.coincodecap.com/tag/ethereum/) or Eos with on-chain governance and DPoS (Delegated Proof of Stake) as it’s consensus protocol. The Tezos protocol design allows it to evolve its protocol overtime without having forks, this is why Tezos calls itself  **a Self-amending cryptographic ledger**.

## Tezos Blockchain **Architecture**

Tezos Blockchain has a modular architecture. The three important protocols that form the heart of Tezos architecture are –

1. **The network protocol** — It is the gossip protocol that is used to broadcast transactions across the network peers.
2. **The transaction protocol** — It defines the protocol, responsible for making valid transactions in the network.
3. **The consensus protocol** — As the words say, it is a protocol responsible for maintaining the consensus in the network.

The transaction and the consensus protocols combinedly form the blockchain protocol of the network.

The network shell is one of the key ingredients of the Tezos blockchain architecture. The network shell acts as an interface between the blockchain and network protocol. This shell is agnostic to the transaction protocol and the consensus protocol. The most arduous part of the network shell is to protect nodes against denial-of-service attacks.

## Liquid **Proof-of-Stake (LPoS)** in Tezos

The key ingredient of any blockchain network is consensus. The consensus maintains the integrity of the network.

Some of the practically implemented consensus protocols are Proof-of-Work, Proof-of-Identity, and Proof-of-Stake.

The underlying process of POS protocols is staking by stakeholders. The stakeholder stakes his crypto coins for the validity of the transactions present in the block.

If the transactions are found valid by the network, the validator will receive incentives in the native cryptocurrency.

Tezos uses [Liquid Proof of Stake](https://medium.com/tezos/liquid-proof-of-stake-aec2f7ef1da7), a form of dPoS, where delegation is optional. LPOS aims to maintain a dynamic validator set, facilitating token holder coordination and accountable governance.

Bitcoin has miners who mine new blocks. Similarly, Tezos has bakers who bake new blocks.

One has to deposit a certain amount of token called a bond to become a baker in the Tezos network.

The bond amount is set to 8.25% of the total number of Tezos coins.

Each baker is given about a week to deposit the security amount (bond).

A baker’s baking power is decided by the number of tokens deposited.

Every 10,000 XTZ forms a Roll which decides the baking power.

Larger rolls mean higher baking power and higher is the chance of baking the next block.

After a backer forms a block, 32 random bakers are selected to become delegates.

They endorse the block i.e. they witness and verify the authenticity of the transactions present in the block. This process is called endorsing.

In return, the bakers receive incentives along with the transaction fees associated with them.

So, a baker usually picks up transactions that have high transaction fees. In the case of malpractice, the security deposit is confiscated as punishment.

## Tezos Blockchain **Self Amendment**

The key feature of Tezos is the self-amendment. It allows the participants to make changes to the Tezos Blockchain. It was an initiative to overcome “fork”.

**What is Blockchain Fork?**

A Blockchain fork is a point in time when Blockchain diverges into two potential paths forward. A fork can be soft or hard.   
  
In the case of a soft fork, the changes in the network are backward compatible. This is similar to using Microsoft PowerPoint 2015 in Microsoft PowerPoint 2005. But, you won’t be able to use/view the new features of MS 2015 in MS 2005.   
  
In the case of a hard fork, the changes in the network are not backward compatible. This is similar to Xbox and Xbox One S. You cannot play Xbox games in Xbox One S and vice versa.

According to[ official docs](https://learn.tqtezos.com/files/self-amendment.html#introduction), 

> Tezos is a self-amending blockchain network which incorporates an on-chain mechanism for proposing, selecting, testing, and activating protocol upgrades without the need to hard fork. 

Tezos uses a systematic procedure to incorporate changes in the protocols. It is similar to how changes are done in an organization. The board of directors lists down the changes they want to bring to their organization. Then voting is done to choose which change should be implemented.

Time needed: 88 days.

**How does Tezos upgrade itself?**  
The self-amendment process is divided into 4 phases. Each of these four phases lasts eight baking cycles (i.e. 32,768 blocks or roughly 22 days, 18 hours), comprising almost exactly three months from proposal to activation.

 
1. **Proposal Period** 

In this period, developers send their proposals (usually the hash of their source code) to the network. Each node can send at most 20 proposals. A proposal submission also counts as a vote. Other bakers can then vote on the proposals up to 20 times. ![Tezos Self Amend](https://blog.coincodecap.com/wp-content/uploads/2020/04/self-amend.jpg)

 
2. **Exploration Vote Period** 

Proposals with the highest votes make it to the exploration period. Here bakers get to vote either “Yay”, “Nay”, or “Abstain” on the proposals. If the participation rate reaches the minimum quorum and an 80% majority of non-abstaining bakers votes “Yay,” then the proposal proceeds to the next stage.

 
3. **Testing Period** 

During this period, the test network is forked into the network which runs for 48 hours. These forks are sandboxed and have access to all the standard libraries.

 
4. **Promotion Vote Period** 

In this period, participants evaluate the performance of the proposal in the test network. Based on that, bakers submit their votes. If the participation rate reaches the minimum quorum and an 80% majority of non-abstaining bakers votes “Yay,” then the proposal is activated as the new mainnet.

 

## **Smart Contract**

Smart Contract provides additional functionality to the Tezos Blockchain.

In Tezos, one can design their smart contract either though python (through a package called smartpy) or through LIGO.

The code is compiled to [Michelson](https://tezos.gitlab.io/whitedoc/michelson.html) (a machine level language) through the Tezos Virtual Machine.

The Michelson code is stored in the blockchain.

You can convert your smart contract to a full-fledged Dapp either through Truffle or through [Conseil (by Cryptonomics)](https://cryptonomic.github.io/ConseilJS/#/).

So, Tezos is unique in its own respect. It has a huge community of developers. They support newcomers and thrive to make the network better. If you want to read more about the Tezos protocol, governance, and staking (baking), please read our [ultimate guide to Tezos](https://blog.coincodecap.com/tezos-cryptocurrency-an-ultimate-guide/).

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