Blockchain technology underpins the essential characteristics and functions of cryptocurrencies in the decentralised finance (DeFi) ecosystem. However, in order to fully comprehend the potential of blockchain technology, one must first understand the blockchain concept. According to ibm.com, blockchain is a shared (decentralised), immutable ledger that facilitates the process of recording transactions, tracking assets, and building trust.
Zilliqa is a blockchain network, just like the widely known Bitcoin and Ethereum blockchain networks, but with special features that enable it to carry out really intensive, high throughput computational tasks. Just before we dive deeper into what Ziliqa is really all about, let’s take a look at the brief history.
Brief history of Zilliqa
Zilliqa is said to be the brainchild of a team of academics, technologists and entrepreneurs. However, it was launched in June 2017 by two researchers from the National University of Singapore who we now know as the co-founders; they are Amrit Kumar and Xinshu Don.
When Zilliqa launched in 2017, it did so with its ZIL native token, which was based on the ERC-20 token standard on the Ethereum blockchain. Upon launching its mainnet in January 2019, the pre-existing ZIL tokens were swapped for the same amount of the new ZIL available on its relatively recent blockchain network.
When the project was first launched in 2017, an Initial Coin Offering (ICO) was held and the project realised approximately 22 million US Dollars in Ethereum, which helped greatly in the network’s overall wellbeing.
What is Zilliqa?
From IBM’s definition, two keywords that capture the important features of blockchain are ‘shared’ (meaning records of transactions are distributed across a network of computers), and ‘immutable’ (meaning transactions remain unchangeable once recorded). Zilliqa as a blockchain network possess these features but unlike many other blockchains, it is characterised by increased scalability.
Specifically, Zilliqa is a blockchain network capable of handling complex computational processes making it a useful software tool for businesses to build decentralised applications (dApps) just like the Ethereum and Bitcoin blockchain network.
The decentralised protocol is popular for its security, speed and scalability and in fact, prides itself as the first public blockchain platform in the world to successful utilise sharding as a scaling solution.
Notably, Zilliqa can scale up 2,488 transactions per second (TPS) – a transaction speed touted to be approximately a thousand times more than that of the Ethereum network. With these special features, hosted dApps no longer have to worry about clogged networks, high processing fees or security issues that challenge the development of products and services in some other blockchain networks.
It is important to add that even though blockchain technologies like Zilliqa has been vastly applied in cryptocurrency, its use case goes beyond cryptocurrencies and permeates even non-financial sectors.
Beyond cryptocurrencies, Zilliqa can also be adapted to support the development of Machine Learning applications and academic research involving big data analytics- just about any complex computational activity, there is. This is made possible because of Zilliqa’s scalable blockchain network feature.
How does Zilliqa work?
The concept of sharding has been sufficiently explored by Zilliqa. In simple terms, sharding is defined as the decomposition of a database into multiple smaller units that can handle requests individually.
By this process, transactions are grouped into smaller subgroups called shards and divided among the networks to allow each node to verify a portion of the network’s overall transactions faster.
Each node on the network functions somewhat like an independent blockchain capable of processing data and incorporating new blocks called microblocks into the chain. This is what makes for increased scalability of the Zilliqa network.
The programming language Scilla (which is an abbreviation of Smart Contract Intermediate-Level Language) is useful for designing programs on the Zilliqa network.
Precisely, Scilla aids the verification of the security of dApps or smart contracts intended to run on the Zilliqa blockchain. The concept of proof-of-work (PoW) has also been adopted in the Zilliqa network as obtained in Bitcoin and Ethereum 1.0.
Zilliqa’s native token – ZIL
ZIL is Zilliqa’s native cryptocurrency, which debuted on the Zilliqa blockchain in 2019. The ERC-20 token, in addition to being a utility token, has a wide range of applications, similar to other cryptocurrencies on other blockchain platforms.
Among other things, the ZIL token can be staked by validators and is utilised in the network’s reward system, ZIL can be purchased on a variety of exchanges, including crypto.com. After that, it can be exchanged or staked on the Zilliqa platform.
At the heart of Ziliqa’s operation is a Practical Byzantine Fault Tolerance (pBFT) governance mechanism which ensures that authority within the network stays distributed.
Using the pBFT governance mechanism, validating nodes are randomly assigned to specific shards and, as such, they must agree with each other before a microblock is finalised and subsequently combined into a transaction block.
In order to be a validating node, a ZIL token holder must first stake ZIL in a liquidity pool, which then guarantees voting rights on the Zilliqa network.
Ultimately, Zilliqa possesses the capacity to undertake computationally intensive tasks like data mining and financial modelling, affording increased scalability to users of the platform.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.