Qtum (pronounced Quantum) was founded by Patrick Dai, Neil Mahi, and Jordan Earls. Prior to founding Qtum, Patric was a member of the Alibaba team while Neil Mahi came in with 20 years of software development experience. Both founders had spent multiple years working with cryptoassets before pursuing Qtum.
Marrying aspects of Bitcoin and Ethereum
Qtum aims to harness the best attributes of the Bitcoin and Ethereum blockchains to create a smart contracting platform. The protocol uses the Bitcoin core code as its base for security and stability reasons. Since Bitcoin does not support Turing complete smart contracts, Qtum integrated Ethereum's virtual machine (dubbed the Ethereum Virtual Machine or EVM) to make the network capable of running decentralized applications (dApps). It also has plans to integrate additional virtual machines, namely the X86 VM, to support smart contract programming languages beyond Solidity.
The combination of Bitcoin and Ethereum attributes creates a compatibility issue. Bitcoin uses a UTXO model to track coin ownership, while Ethereum (like most other protocols sporting virtual machines) employs an account-based model for simplicity. The Qtum tech stack, therefore, contains a conversion layer, called the account abstraction layer (AAL), in between Bitcoin code and the EVM to ensure UTXO and virtual machine compatibility.
PoS consensus and on-chain governance
Qtum opted to use an adaptation of Blackcoin's Poof-of-Stake (PoS) model as its consensus mechanism. The team believed Proof-of-Work (PoW) blockchain protocols suffered from categorical scaling limitations that PoS could help alleviate. Qtum also has an on-chain governance system (aka Decentralized Governance Protocol or DGP) to pass on decision-making responsibilities to token holders. Network parameters up for discussion include block size and base gas fee, among others. In addition to the on-chain governance system, the Qtum Foundation plays a central role in the development and promotion of the Qtum blockchain.
Qtum plans to implement the first iteration of a new Proof-of-Stake consensus mechanism, Incentive Proof-of-Stake (IPoS), which is compatible with UTXO-based blockchains like Bitcoin. Qtum's UTXO model was chosen to support consistent, traceable on-chain transactions and IPoS iterates on traditional PoS models by introducing reward mechanisms calculated by online node numbers estimates. Initially, Qtum will launch with a standard Proof-of-Stake (PoS) model but plans to transition to the IPoS model in later development phases.
Qtum developers and consumers rely on an Ethereum Virtual Machine (EVM) just like the Ethereum blockchain does. But the Qtum EVM is distinct in that it is constantly backward compatible, unlike Ethereum's EVM. Qtum also supports an Account Abstraction Layer (AAL) that enables the EVM to run existing Ethereum smart contracts on Qtum without extensive modifications. Qtum's Contract Ledger stores smart contract language, data feeds, and oracles for contract execution.
Prioritizing transaction confirmation forces Qtum to focus on two different qualities as a sort of Bitcoin-Ethereum hybrid blockchain. The size of the fee should match the size of the transaction, similar to a standard Proof-of-Work (PoW) on-chain transaction fee. The gas fee should also match expected and available funds, like gas fees, are charged for executing smart contracts on Ethereum.
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