Zilliqa (ZIL) – Beginner’s Guide, Information & Review
What is Zilliqa?
Zilliqa is an open, permissionless distributed network and ecosystem for hosting decentralized applications.
It has smart contract functionality and developed its own programming language for smart contracts that is data-flow based, called Scilla. The native asset of the Zilliqa blockchain goes by the ticker ZIL and is used as gas for contract execution, transaction fees, and mining incentive.
Currently, an ERC20 token but will be swapped to native tokens once Zilliqas mainnet is live.
It aims to provide a solution to the scalability problems of existing blockchains by implementing transaction Sharding; this allows Zilliqa to scale horizontally, this means that the more nodes join the network, the faster it can process transactions.
Sharding is a technique which divides the network into several subgroups (called Shards) and then assigns specific tasks to each subgroup, for example, each subgroup validates a particular number of transactions where another subgroup validates another set of transactions in parallel.
In contrast to traditional blockchains where every node must validate every transaction, this specific architecture allows for a much higher throughput of transactions per second.
Zilliqa uses a hybrid consensus mechanism, consisting of Proof-of-Work and Byzantine Fault Tolerance. When a miner starts mining, he has to do a certain amount of PoW to establish his mining identity. After the identity is established the miner gets assigned to a Shard. In the Shard Zilliqa uses BFT, which means most of the nodes in the Shard have to agree to attach a mini block. This added Finality to the mechanism.
It is the first permissionless blockchain that achieves great scalability without sacrificing security and decentralization. There are a few high-throughput blockchains that accomplish that scalability through the use of very few validator nodes, for example, EOS; this sacrifices security and decentralization. Zilliqa reaches the holy trinity of blockchain tech, with achieving scalability and maintaining Decentralization and Security at the same time.
The Zilliqa team has a strong academic background and consists mostly of PhDs and computer science engineers. The founder is Xinshu Dong, and chief scientist is Prateek Saxena, who co-authored the paper “A Secure Sharding Protocol For Open Blockchains” along with Loi Luu. Advisors were, among others, Loi Luu (founder of Kyber Network) and Vincent Zhou (founding partner at FBG capital).
Zilliqa raised 20 million USD with a pre-sale contributing round in November 2017. The public sale was open for two weeks and ended at 4 January 2018, collecting additional 2 million USD.
Can Zilliqa be mined?
Yes, Zilliqa uses PoW to establish mining identities (not as consensus mechanism!). Zilliqa uses a modified version of Practical Byzantine Fault Tolerance (pBFT) as consensus mechanism.
Every mining node has to establish their identity with Proof-of-Work, then pBFT is used to vote upon which blocks will be attached to the blockchain. Every valid block needs a majority vote.
What differs Zilliqa from other Cryptocurrencies?
Zilliqa is the first public blockchain to combine scalability and security while maintaining decentralization. Also, they are the first network that successfully implemented sharding.
It differs from its main competitor Ethereum that it is PoW-based while Ethereum is aiming to change to full Proof-of-Stake. Also, Ethereum plans to implement state sharding, while Zilliqa is using transaction sharding.
How much is Zilliqa worth today?
What is the total and the circulating supply?
The total supply of ZIL is 12,600,000,000 and the circulating supply at the time of writing is 7,286,396,952 ZIL.
Where can you buy ZIL?
You can buy ZIL on several cryptocurrency exchanges, most notably Binance, Bithump, Upbit, and Huobi.
Can ZIL be sold for cash?
You can sell ZIL for cash on several cryptocurrency exchanges that have fiat-pairings, most notably Bithump and Upbit.
Zilliqa is currently in testnet, constantly achieving ~200tx/s. The mainnet launch is scheduled for Q3 2018. Then Zilliqa will have its own blockchain, and ZIL tokens are swapped from ERC20 tokens to native tokens. When the mainnet is successfully launched, there will be dapps build on top of it.
Verdict and Rating
Zilliqa is a gamechanger, as it shows that scaling a blockchain can be done without compromising security and decentralization. The team is top level, and progress is going fast.
For now, it is as good as it gets, from both a technical and an investing point-of-view.
But we will see how it evolves mid- to long-term. The downsides are that when Ethereum successfully implemented sharding, it could render Zilliqa useless. And it does not qualify for a Store-of-Value, because there total supply of ZIL tokens is fairly high. Additionally, I expect an inflationary spiral once ZIL can be mined in the mainnet.
DisclaimerThe writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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