Considering Tezos (XTZ) as an investment? Looking into its potential as a millionaire maker? If you are interested in Tezos and its investment flair, then you should familiarise yourself with all the advantages and disadvantages of investing in XTZ.
Keep on reading to find out more about Tezos - one of the most innovative bellwethers in the cryptocurrency realm - and decide for yourself if potential rewards outweigh possible risks.
With a range of educational materials and interactive courses, we at Trading Education are here to support you on your cryptocurrency trading journey to success. Who knows: investing in XTZ might be your first step to becoming the next crypto king!
What is Tezos?
Tezos is an innovative blockchain-based platform that supports cross-border transactions, smart contracts, and decentralised apps, also known as dApps.
Proposed in 2014 by Arthur and Kathleen Breitman, Tezos was launched in 2018 after a mind-blowing Initial Coin Offering (ICO). The Tezos ICO took place in 2017; it lasted for 13 days during which $232 million were received.
Now, just a couple of years after its initial release, Tezos is one of the leading crypto behemoths in terms of market sentiment and market cap. Note that Tezos is currently ranking 19th, as per CoinMarketCap.
Just like other cryptocurrencies, Tezos relies on decentralised network governance - which also makes XTZ a great alternative to traditional banking and financial systems.
But it’s not only its decentralised nature and advanced technology that make Tezos stand out: Tezos has taken its infrastructure a step further allowing users to vote on proposed upgrades in the actual blockchain.
As stated on its official web page, “Tezos is an open-source blockchain protocol for assets and applications backed by a global community of validators, researchers, and builders.”
Note that Tezos’ native cryptocurrency is XTZ, often referred to as a tez or a tezzie. At the time of writing, one XTZ is trading at $2.10.
So, now when you know the ins and outs of Tezos, let’s explore the pros of trading XTZ - a state-of-the-art self-amending cryptocurrency.
Would you consider investing in Tezos XTZ?
Pros of Investing in Tezos
What are the benefits of investing in Tezos?
Tezos has numerous advantages over other digital giants, including Ethereum, EOS, and Cardano; advantages that make investors believe that this flexible altcoin can potentially become a profitable financial venture.
Below are some of the major pros of Tezos:
â Tezos is more than a cryptocurrency:
Tezos is a highly scalable platform based on smart contracts. Given the fact that Tezos is not only a cryptocurrency but an innovative blockchain platform, some investors believe that Tezos has some promising growth potential. Tezos can be used in any kind of business, including gaming, which is one of the largest and fast-growing industries worldwide.
â Tezos has impressive on-chain governance:
One of the biggest advantages of Tezos is the fact that it has impressive on-chain governance. This means that all Tezos coin holders can propose and vote for changes, creating a commonwealth where all users can be heard and eliminated top-down decisions. Unlike other cryptos, Tezos has built decision-making into the network of users so Tezos doesn’t have to rely only on developers and miners. Its democratic nature also allows for constant changes to be implemented without radical hard forks.
â Tezos is a self-amending blockchain:
Tezos is highly flexible and has automated upgrading, often referred to as self-amending. By self-amending nature, it means that upgrades happen without having to split into two different blockchains. In other words, as changes are decided by users, the occurrence of hard forks is eliminated. This advantageous feature actually eliminates stagnation and enhances the implementation of improvements as they emerge.
â Tezos relies on an innovative process known as baking:
The unique network’s governance process described above is called baking. Tezos describes baking as the “act of signing and publishing blocks to the Tezos blockchain.” Baking is a multi-stage process that requires users to make a security deposit and stake a roll of 8,000 XTZ. The baking process is not only accessible but also a great way to generate income by earning rewards in XTZ, which is a great pro of investing in XTZ.
â Tezos uses an improved liquid proof-of-stake mechanism:
Tezos combines the best of traditional proof-of-stake and delegated proof-of-stake. Bakers who take part in Tezos proof-of-stake consensus system can generate not only awards but contribute to the network. Here we should note that traditional proof-of-stake is when nodes lock their own tokens to validate blocks, while delegated proof-of-stake allows less wealthy users to have a say as well. Tezos allows bakers to accept delegated tokens, allowing users with smaller holdings to participate, too.
â Secure smart contract programming language:
Tezos uses a language called Michelson that enables formal verification of smart contracts. The most important aspect is that Michelson can mathematically prove the correctness of the code governing transactions. This formal verification - often used in mission-critical settings (e.g., aerospace) - can also prevent the occurrence of bugs in the system. As such, this programming language is also more secure and flexible than other languages.
â Safe and reliable system:
By incorporating a language that enhances formal verification, Tezos is considered a safe project. In terms of code correctness, Tezos is ideal for high-value use cases and provides resistance against attackers and crypto scams.
â Tezos is a valued asset among investors:
Because of its innovative technology and ideology, Tezos is highly valued among investors. To provide an example, when Tezos burst into existence, it gained high-profile investments from firms like PolyChain Capital. Tezos has also entered into diverse partnerships with major financial institutions, such as one of Brazil’s leading banks, Banco BTG Pactual. Interestingly enough, venture capitalist Tim Draper is one of the investors who believe in XTZ.
â Growing community of supporters:
One of the best pros of Tezos is the fact that the team offers generous grants for developers to study the platform. They are working with Kingsland University to provide training for those interested in XTZ and are also active on social media. According to stats provided by Hacker Noon, Tezos has more than 1,600 Facebook subscribers, 25,000 followers on Twitter, and 22,600 Reddit members.
Cons of Investing in Tezos
While Tezos has numerous advantages over other cryptos, knowing the disadvantages of investing in Tezos is vital to help investors decide for themselves if Tezos can lead to satisfactory returns.
So here are some of the biggest drawbacks of Tezos investing:
â Tezos ICO was followed by delays, in-fighting, and lawsuits:
The successful Tezos ICO in 2017 was followed by numerous disagreements and lawsuits, which is still seen as a big drawback. For example, the Tezos Foundation and the Breitmans underwent numerous conflicts because the Tezos Foundation became uncooperative about using the raised funds to improve the blockchain. All the internal conflict led to a delay in token issuance, which resulted in investigations on XTZ and different lawsuits.
â Decrease in its popularity:
Because of its internal issues, Tezos popularity suffered. In fact, Tezos is still considered an immature platform by some investors who prefer to stick to big players, such as Ethereum and Bitcoin. Though Tezos has managed to restore its public image, with Tezos reaching its all-time high in mid-February this year, the platform has a long way to go in terms of mass adoption.
â Tezos is a young ledger:
Despite its impressive technology, Tezos is still young and lacking commercial support. Though XTZ is an attractive investment, those who want to use their cryptos for everyday transactions should remember that Tezos is not widely supported in commercial transactions. The platform hasn’t reached its capacity and still has to deal with future transaction fees, speed, and delegation issues as the network continues to grow.
Is Tezos a Good Investment?
Now when you know the pros and cons of Tezos, you may also ask if Tezos is a good asset worth investing in. The truth is that all investments come down to a simple factor: the so-called risk-reward ratio or if potential rewards outweigh possible risks.
Tezos has some risks, true! It still has a long way to go in terms of commercial support and adoption when compared to market rivals, such as EOS, NEO, and other blockchain platforms that support smart contracts and dApps.
At the same time, Tezos has impressive technology and has managed to establish itself as one of the leading cryptos in the market. In fact, due to some scalability issues Ethereum is currently dealing with, Tezos has a great opportunity of becoming a leader in the field of cryptocurrency investing and even the next king of smart contracts.
With the ability to support on-chain governance and a stake level of over 80% spread across 450 validators and 13,000 delegators, Tezos is definitely a good investment.
So, if you are willing to invest in XTZ, do not hesitate to do your own research and invest in risk management. Simply because XTZ investing could really work for you too!
Just remember an important mantra in the financial sector: never invest more than you can afford to lose and never risk more than 1% of your account on a single trade.
Ready to start investing in Tezos XTZ?
Will Tezos Become a Millionaire Maker?
With a market cap of $1,586,468,102, in a sense, Tezos is already a millionaire maker.
As it’s always good to compare a coin against Bitcoin, the unquestionable #1 cryptocurrency, we can say that Tezos has not only performed well compared to BTC but has had a great price development. For example, on January 1st, 2019, one XTZ was $0.47, while on January 1st, 2020, it reached $1.35 (an increase of +186%).
Source: Hacker Noon
The value of Tezos is likely to increase further as the protocol becomes more widely adopted.
Given its advantages over other cryptocurrencies, experts believe that Tezos is a profitable investment. Based on profound technical analysis, Wallet Investor predicts that investing in Tezos in the long-term can lead to returns of around +318.51% in the next five years. In other words, a current investment of $100 may be up to $418.51 by 2025.
Despite its bumpy road to success and some bad PR, Tezos has the potential to jump into the spotlight and become one of the top 10 cryptocurrencies soon. According to Captain Altcoin, if Tezos delivers the planned product and creates a stable user base, it has the potential to grow up to 10-100 times more than its previous all-time-high.
While making price predictions, especially of novel and volatile assets, remain speculative and should be always taken with a grain of salt, some experts claim that Tezos may reach $1,000 in the years to come.
In fact, we should not forget that proof-of-stake projects like Tezos may cause the next crypto bull market. That’s right! It’s Tezos staking mechanism that can become a major price driver and help Tezos make it out of the coronavirus-triggered financial turmoil that economies are struggling with now.
Nevertheless, remember that cryptocurrency prices also depend on demand and supply principles, regulations, adoption, and crypto news, so Tezos and any other crypto investing remain unpredictable, hence risky!
- Tezos is one of the most innovative blockchain-based platforms used for online payments, smart contracts, and dApps.
- Though Tezos had a rough start marked by numerous internal issues and lawsuits, in technical terms, Tezos is highly appealing to investors: it offers an improved proof-of-stake mechanism, smart contract security, and self-amending procedures.
- One of the main pros of investing in Tezos is its democratic nature that allows even less wealthy users to participate in decision-making and voting in order to improve the entire ecosystem.
- Tezos also has a supportive community and a fair amount of bakers - a factor that may help Tezos become a dominant asset in the crypto space.
- With a market cap of $3,786,468,102, Tezos has the potential to become a millionaire maker in the years to come.
- Some experts claim that XTZ may hit $1,000 in the next few years.
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Is Tezos a better investment than Ethereum?
In technical terms, Tezos might be considered a better investment than Ethereum. Tezos is a blockchain that has always operated within a proof-of-stake ecosystem, which makes it more robust than the current proof-of-work consensus of Ethereum.
Nevertheless, in terms of market cap, adoption, and market cap, Ethereum - often referred to as the king of smart contracts - is still the second-largest cryptocurrency after Bitcoin.
Is it worth investing in Tezos?
Tezos is a worthy investment amid the ongoing pandemic. Though at the time of writing Tezos is trading at $4.80, which can't be compared to other leading cryptos, Tezos has opened the door to delegated participation and has a solid position in terms of liquidity. Some experts claim that XTZ may hit $1,000 in the next few years.
How much do you need to bake XTZ?
To bake XTZ, one needs a row of XTZ or a minimum of 8,000 XTZ. The more XTZ you have, the higher the chances are at validating blocks and earning rewards. Nevertheless, those who do not have enough capital can delegate their share to a baker who will be randomly selected from other bakers.