In a rush? Check out the numbers and quick facts in 30 seconds.
Qtum Coin: Initially based upon the ETH platform, before a swap to the mainnet platform on Oct 4th, 2017. Largely traded on Bithumb, Coinone, Bittrex, Binance, EXX among others. Unit price US$ 31.5 on Dec. 15th, 2017 at 11:34 PM UTC
ICO facts: March 12 to March 17th, 2017. Raised US$15,664,829 Equivalent. Tokens were ERC-20, sold at US$ 0.307 a unit.
In a nutshell: An open source Blockchain project for a Smart Contracts platform, QTUM is a proof-of-stake Ethereum that runs on the bitcoin’s blockchain.
Editor’s Notes and Disclosure: The author holds no business stakes or dividends at the startup. This article is an informative one. Both the author and Decentral Magazine encourage our readers to seek advice from a financial advisor and do their due diligence before considering any investment.
The great Napoléan Bonapart said it over a century ago: “China is a sleeping giant[…]When she wakes, she will move the world“. And this giant has been shaking the cryptocurrencies world by all means. From huge trading volumes, tremendous mining capabilities, to ones of the most hyped projects and ICOs, this astonishing shift of status quo relies greatly on the Red Dragon. Today, we will go over the intriguing Qtum project with a fine-tooth comb. Praised to be “the best team out of China and Asia” by Ethereum’s co-founder Anthony Di Iorio, all eyes are fixed on the project. Let’s start with an introductory video.
Source: Qtum youtube channel
Qtum at a glance
Simply put, Qtum is an open source Blockchain project put forth by the Singapore-based Qtum Foundation. It’s widely seen as a “hybrid blockchain application platform“. The project’s underlying technology is a fork of bitcoin core, an “Account Abstraction Layer” (AAL) allowing for multiple Virtual Machines including the Ethereum Virtual Machine (EVM) and a Proof-of-Stake consensus. This is designed for a smooth execution of Smart Contracts and Decentralized Applications (DAPPs). The AAL acts here as a bridge between the EVM and the Unspent Transaction Output (UTXO) model of Bitcoin Core.
Without a computer science background, you are probably tearing your hair out by now. So, let’s explain this in English: it’s a project that improves on the Ethereum blockchain, with industry use cases, scalability, and ease-of-implementation in mind.
What are these improvements on the existing Ethereum Blockchain?
First, it doesn’t use proof-of-work for transaction validation, to avoid any jeopardy to the oevrall scalability. It’s precisely the reason why Ethereum is hardly overlapping most industrial applications.
Second, Qtum is well aware of the security flaws that might exist on the ETH blockchain. These flows certainly explain the multiple hard forks yielding several Ethereum versions. In fact, more forks will take place to implement proof-of-stake consensus.
Furthermore, Qtum needs no mining, nor will it require a fork. The project praises itself for being modular, optimized, and designed thoroughly for a readily industry adoption.
How does it work?
Qtum is not simply a Bitcoin and Ethereum fork. It takes an incredible engineering savvy to combine an unspent transaction output (UTXO) blockchain with the EVM (Ethereum Virtual Machine). I know, talk geeky to me. So the Qtum’s solution, or the Account Abstract Layer (AAL), serves as an interface layer between the blockchain and the EVM.
The breakthrough here is to use any smart contracts VM compatible with the AAL as a replacement for EVM. The Quantum team has already announced plans to develop an x86 smart contracts virtual machine for Qtum. Such architecture would make up for the drawbacks found in Solidity (the programing language for implementing smart contracts on the Ethereum Blockchain) and the EVM. For one, it allows developers to program smart contracts in popular programming languages like C, C++, C#, and Java.
Finally, Qtum’s version of Bitcoin Core is known as the Decentralized Governance Protocol (DGP). DGP allows owners to vote on and enables changes to a limited set of blockchain parameters (e.g. block size and block time) without the need of hard forks.
When going over the technical whitepaper, I couldn’t help but think of Satoshi Nakamoto’s work on bitcoin. The general look and feel, the content, everything about it tells a comforting tale: these people know what they’re talking about. And they’re on to something big.
The document is a technical read that explains the flaws in the current Ethereum Blockchain platform (namely the scalability, the expensive and power hungry PoW concept, the limited industry applicability). It also presents the proof of stake smart contracts platform proprietary to Qtum.
The second whitepaper available, titled “Qtum Blockchain Economy” is marketing oriented and provides more information about the foundation vision, and the ICO event. It’s a rather average quality read, boring at times, and looks more like a procrastinating undergrad last-minute report.
The Qtum token/coin
Here is what the numbers tell: there are 100 million ERC20 tokens . A portion of these tokens was swapped to mainnet tokens. Add to that Qtums from staking block rewards, the total is theoretically a little over 100 million. coinmarketcap surely confirms my math, putting it at 100,235,984 tokens as of press time.
Through staking, blocks will always reward miners with new Qtum. Hence, the total supply of Qtum will grow over time. An inflation is systemic in this model. Let’s say, whatever goes up, would go up some more. And no, you probably guessed it already: it’s more complicated than that. In fact, the rate of inflation diminishes as the total supply goes up and the rewards per block remain constant. The current block reward is 4 QTUM. Block time is 2 minutes. This results in approximately 2880 QTUM generated per day.
For those who are interested in staking Qtum, here’s a detailed tutorial by Cryptominder (using a Raspberry Pi 3).
On the other hand, here’s the token allocation for Y1, as presented by the Qtum Foundation Economical Model.
So, 20% goes to the “initiators, early backers and development team”, another 20% goes to business development. I personally have some concerns about the allocation module, not to mention the horrible choice of colors! On the bright side, the team is promising that the allocation will shift over time, with most tokens (up to 80%) flowing to the community pool. That’s going to happen around Y4.
Currently, the Qtum is a greatly hyped digital asset, rather than a cryptocurrency. People are largely trading it on South Korean exchanges Bitthumb and Coinone. The market is bullish, and buyers are willing to increasingly pay, driven by FOMO, or chasing a rapid ROI. The bears couldn’t be happier indeed.
The currency is also available on other major exchanges like Bittrex, Binance, Bitfinex, and EXX to name a few. Here’s the 1-month chart showing the massive 141% whooping value increase.
Qtum price chart (Nov 16 to Dec 16, 2017). Note the previous support level at US$ 11, and the previous resistance level at US$ 18. Source: coinmarketcap
The team, pictured below, is led by CEO Patrick Dai (Project Co-Founder), a Ph.D. candidate and an Alibaba former product manager.
There is also Jordan Earls, who has been developing software since he was thirteen, reviewed over 100 altcoins and identified multiple exploits in coins. Another highly regarded team member is Co-founder and senior developer Neil Mahi. He has a Master’s degree in Business Administration from ISCAE but specialized later on in computer science, has around twenty years’ experience developing software and four years’ experience in the blockchain space. There are also former employees from some China’s biggest companies including Alibaba, Baidu, and Tencent in the team.
Milestones & road ahead
The following Qtum blog post depicts a great overview of the milestones and road ahead of the project.
It’s worth mentioning that the team did a great job sticking to the milestones initially set by the whitepaper. That sends off a very positive message as for the team’s ability to fulfill its promise. Speculators, enthusiasts and investors alike are longing for Q1/2018 expected to see the project blossom and thrive into a wide industry adoption. Let’s wait and see.
Our final verdict
Most people view Qtum as a promising project, and so is a direct competitor we had the chance to assess: NEO. In fact, many high profile investors are backing Qtum and for a great reason. Forbes wrote an article naming Chen Weixing, billionaire, and founder of Kuaidi being in the fold. Anthony Di Iorio, Ethereum founder and CEO of JaxxWallet; Jeremy Gardner, co-founder of Augur and EIR at Blockchain Capital all have joined the backers pool among others. Whoever has been following the project closely understands how hard-working the team is. And this is where the promise turns bright: we have here a motivated, skilled and fully dedicated team. Not to mention an ever-growing crowd of believers. And while bulls and bears lock horns and claws, Qtum steadily establishes its position in the digital arena. And it’s nothing short of a success story.