CoinMarketCap takes a look at a new smart contract platform.
The race to produce the fastest, most capable smart contract platform has led to the advent of dozens of strong contenders.
Among these, Qtum looks to beat a different path, by taking proven technologies and folding them into a powerful solution that can compete with some of the most popular platforms of today.
What Is Qtum?
Qtum is an open-source blockchain platform that takes some of the best parts of Bitcoin and Ethereum and wraps them into a developer-friendly platform capable of supporting highly secure decentralized applications (DApps).
Specifically, Qtum takes Bitcoin's UTXO transaction model and combines it with an adaption layer interface to the Ethereum Virtual Machine to produce the first UTXO-based smart contract platform. Unlike Bitcoin and Ethereum (for now), Qtum is secured by proof-of-stake (PoS) — more on this later.
The platform features a theoretical throughput of up to 70 transactions per second (TPS) — making it around 16 times faster than Bitcoin and seven times faster than Ethereum. It also features low inflation and fairly distributed block rewards, ensuring stakeholders are properly compensated for securing the network.
Qtum was founded in 2016 and launched its mainnet in September 2017. Like many 2016-2017 era platforms, Qtum was originally funded through an initial coin offering (ICO), raising a total of $15.6 million in Bitcoin (BTC) and Ether (ETH). At the time, this was the fourth highest-grossing ICO ever.
How Does Qtum Work?
Qtum builds on Bitcoin's UTXO transaction model by layering on additional scripting capabilities, allowing developers to build powerful decentralized applications on top of the platform. Developers have leveraged these capabilities to build out Qtum’s rapidly growing DApp ecosystem — which includes decentralized games, search engines, payment toolkits, social networks and more.
One of Qtum’s defining features is its account abstraction layer (AAL). This essentially bridges the code gap between Qtum’s UTXO base blockchain with the account model used by its virtual machine, enabling more powerful smart contract capabilities.
It's secured by a custom variant of proof-of-stake (PoS) and recently added an “offline staking” capability allowing non-custodial address delegation to an online “super staker.” Qtum PoS uses the Qtum Core full node wallet to earn network rewards for staking QTUM and publishing blocks.
The QTUM token is the native gas token for transactions and smart contract transactions on Qtum, and is also the reward token for node operators.
In April 2021, Qtum underwent a hard fork (known as FastLane) which saw the average block time reduced from 128 to 32 seconds, increasing block production four-fold. This upgrade is expected to better prepare Qtum for growing DeFi activity while improving confirmation times for standard transactions.
What Makes Qtum Unique?
Qtum is designed to provide a secure, reliable and highly efficient platform for private, public and enterprise use cases.
Some of its main distinguishing features include:
On-Chain Decentralized Governance
Qtum uses a custom-built decentralized governance protocol (DGP) to allow different stakeholders to have their say over how the Qtum platform functions, and allows certain blockchain parameters to be changed via smart contracts.
Large Node Network
Qtum has one of the largest node networks of any blockchain platform operating today. As of May 2021, there are a total of ~1200 Qtum nodes distributed throughout 60 countries — making it one of the most open and decentralized blockchains. Bitcoin and Ethereum count as the only blockchains with a higher active node count.
Growing DeFi Ecosystem
Qtum’s efficiency and rich smart contract capabilities have made it a hotbed for DApp development. Many recent DApps on the platform fall into the decentralized finance (DeFi) niche — including QiSwap (an AMM) and Qcore (yield farm).
The Qtum Chain Foundation also runs a DeFi and ecosystem incentive program, which will see up to $5 million allocated to developers building DeFi products and other ecosystem enhancements on the platform over a period of two years.
QRC20 Tokens
Like most popular smart contract-capable blockchains, Qtum also features smart-contract-issued assets — in this case, known as QRC20 tokens. These can be coded with novel functionality to power a range of applications.
Proof-of-Stake Consensus
Qtum’s proof-of-stake is both efficient and highly inclusive. Practically anybody can help to secure the Qtum blockchain by running a full node — since there are no expensive hardware requirements.
Who Are Qtum’s Main Competitors?
As a smart contract capable platform, Qtum is built to power a future where practically any application can run in a decentralized fashion across a blockchain. But it’s not the only platform with the same goal in mind, some of its biggest competitors currently include:
- Ethereum: The brainchild of Vitalik Buterin and seven other co-founders, Ethereum is currently the most popular platform for DeFi applications. It is beginning to undergo a major upgrade to transition to proof-of-stake (PoS) in the near future.
- TRON: Self-proclaimed as the "world's fastest-growing public chain," TRON is a high-performance blockchain that aims to serve as the infrastructure for an open internet.
- Binance Smart Chain: An Ethereum fork that has exploded in popularity in recent months thanks to its rapidly expanding DeFi ecosystem, low fees, and rapid confirmation times. It uses Binance Coin (BNB) as the native gas token.
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