Qtum (QTUM) is a public blockchain platform that reportedly “leverages the security and simplicity” of Bitcoin’s UTXO (unspent transaction output) protocol. Similar to other cryptocurrency platforms such as Ethereum and NEO, the Qtum network also allows users to issue smart contracts.
“Decoupling Applications” Through Account Abstraction Layer
According to the explainer video on Qtum’s official website, Qtum uses an “account abstraction layer” to “decouple applications” from a blockchain’s base protocol. Separating application processing from the “underlying protocol” helps to “maintain the performance” of the blockchain network, Qtum’s developers claim.
Decoupling software programs from the underlying protocol on which apps are built allow developers to “add more smart contract capabilities in the future”, Qtum’s development team notes.
Proof-of-Stake (PoS)-based Consensus Mechanism
The Qtum blockchain uses the proof-of-stake (PoS) consensus mechanism to implement a “decentralized governance protocol.” Qtum’s community members are able to collectively decide whether to modify block sizes, how much to charge in gas fees and make other decisions related to network management.
Although most proof-of-work (PoW)-based blockchains also allow users to make decisions regarding ongoing development, Qtum’s developers note that governance-related matters on Qtum are settled “without ecosystem disruption.” Contentious hard forks such as the most recent PoW-related Bitcoin Cash (BCH) upgrade on November 15th, 2018 resulted in two separate blockchains and coins.
Following the controversial fork, there was a great deal of confusion regarding which chain should be assigned the BCH ticker. There had also been reports of serious security-related issues involving the Bitcoin (“Satoshi Vision”) SV chain which reportedly allowed users to engage in double spending. Because of these critical problems with PoW-based consensus protocols, many second and third-generation crypto platforms including Qtum are based on PoS consensus protocols.
Is PoS More Secure Than PoW?
Developers who prefer PoS over PoW, including Qtum’s creators, claim that PoS is a more secure and better approach to achieving distributed consensus on a blockchain. At present, there are reportedly over “5,000 active nodes online” that are running the Qtum protocol. The Qtum network has also been operating without any downtime for more than a year, according to the platform’s development team.
Facilitating “Mainstream Adoption” Of Smart Contracts
As developers worldwide work to create improved implementations of the Lightning Network (LN) protocol (a second-layer solution that reduces transaction processing times), Qtum’s design team is set to introduce the “QuantumX86 virtual machine (VM)” and “Unita.” Both of these technologies are described as “significant innovations” as the quantum VM aims to “better facilitate mainstream adoption of smart contracts.”
The Quantum VM will support widely-used programming languages including C, C++, Rust, and Python. There’s also a complete standard set of software libraries, “native tool chains”, and parallel contract execution” features that reportedly “improve gas efficiency.” Meanwhile, Unita (also known as Quantum Enterprise Edition) is designed to enable organizations and individuals to “rapidly deploy” blockchain-based solutions for real-world applications.
As mentioned in Qtum’s whitepaper, PoS-based blockchain networks “promise significant performance advantages” compared to PoW solutions. Moreover, Qtum’s development team states in the platform’s whitepaper that the industry needs “stable backward-compatible smart-contract systems” that can “automate cross-organizational information-logistics orchestration with lite mobile wallets that support simple payment verification (SPV) techniques.”
Better Data Processing, TX Validation With SPV Techniques
Due to frequent hard forks (backwards incompatible upgrades) that are activated by many different cryptocurrency platforms, it can become challenging to update smart contract-enabled applications. In order to solve this issue and to also make it easier to manage data on blockchains, Qtum’s developers will use SPV techniques for transaction processing – as these don’t require downloading the entire blockchain to verify transactions.
On January 9th, 2019, Qtum’s development team announced they had completed the Qtum platform’s first atomic swap with bitcoin (BTC). As crypto enthusiasts know, atomic swaps enable on-chain exchanges between digital currencies that reside on two separate and independent blockchain networks. Intermediaries, or third-parties, are not required to complete atomic swaps.
Implementing Atomic Swaps With HTLCs
This development indicates that trustless interoperability between two separate blockchains is not only possible but that it has also been carried out successfully. As explained in Qtum’s official blog post, the atomic swaps were implemented using Hash Time-Locked Contracts (HTLC). These types of contracts lock funds until both blockchains involved in a transfer confirm the transaction. After both chains have confirmed the transfer, they are able to claim their funds.
Some advantages of atomic swaps include: not requiring third-parties for transaction settlement and being able to conduct transfers between two separate networks without having to trust the other party (trustless). A few drawbacks of atomic swaps are: a “price-matching tool” is needed so that both parties can negotiate and decide how many tokens will be swapped; confirmation times are dependent on the “transaction confirmation time of both blockchains”, which makes the process a lot slower slower than using a centralized exchange, Qtum’s blog notes.
Learning More About PoS After 51% Attacks On PoW Networks
In response to the recent 51% attacks on top 20 cryptocurrency platforms, including the Ethereum Classic (ETC) and Dash (DASH) networks, Dev Bharel, a blockchain solutions architect, published a post on “Qtum’s 101” Medium account that explains how PoS works. The blog mentions that there are many different implementations of PoS, with “some like Qtum [that] require no minimum stake, others like DASH [that] have PoS and PoW working in tandem, while others still, like Cosmos, work through a Delegated Proof-of-Stake system, where only a subset of nodes are validators.”
The post further explains that Qtum’s consensus protocol is “PoS version 3”, meaning that it is supposed to be an improvement over version 2. First introduced in a paper (published in 2012) authored by Scott Nadal and Sunny King, PoS’s second and third versions have been developed by Pavel Vasin while working on the Blackcoin project.
PoS version 3 (PoSv3) is “built for UTXO based blockchains”, according to Qtum’s blog. The version of PoS on which Qtum is based on reportedly “mitigates” the Nothing At Stake problem
through its “decentralized governance protocol which manages how forks work on chain. Launching an attack on this type of PoS network is “significantly expensive with a low enough reward based on the UTXO PoSv3 consensus”, the blog states.
More Later On Qtum’s Business Partnerships, Ongoing Development
Despite the prolonged cryptocurrency bear market, the blockchain industry continues to grow as there are a lot of improvements being made to the ecosystem’s infrastructure. New products and platforms are also being developed to better serve retail and institutional investors. In future posts, we shall take a look at Qtum’s business partnerships and other updates related to its ongoing development.
By Omar Faridi
The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.
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