Following a gruelling red Friday with all the top coins haemorrhaging value, Tezos is attempting to weather the storm.
Like all others, the blockchain firm may have seen some minor losses over the past few days, but XTZ is still up some 6% on BTC at the time of writing.
Its gains over 2019 have been fairly consistent. Excluding the typical peaks and troughs of crypto, this Liquid Proof of Stake altcoin looks set for a solid year-end close.
Just like any major blockchain project, Tezos’s growth hasn’t been in a straight, predictable line.
When I met with co-founder Arthur Breitman at Paris Blockchain Week Summit earlier this year, he spoke about the difficulties of success and being a pioneer in an emerging space.
He also firmly stated that the goal of Tezos was to be the last cryptocurrency.
While it’s clear there’s still a long way to go before reaching that goal, how has Tezos managed to hold its own and even go from strength to strength this year?
I sat down with Boston Chapter President at Tezos Commons Ken Garofalo to find out.
Garofalo is forthcoming and friendly. Having flown in just a few hours before, he wasn’t letting jet lag stop him from spreading the word about Tezos. And he had a lot to say.
He explained that it’s his job to help build out the Tezos community and onboard new validators to the network. It’s immediately apparent why he’s such a suitable candidate for the job. Unlike many other insanely intelligent people in this industry, Garofalo isn’t presumptuous or intimidating in the slightest.
He speaks candidly and articulately – without ever giving the impression that he’s spoken the same words many times before.
Sure, he interchanges jargon with everyday vocabulary and talks about protocols, baking, and staking, but he’s keenly aware that simplifying the narrative is one of Tezos’s greatest challenges.
Its latest standard for security tokens, for example, is currently called FD1.2. “Actually, I think it’s FD 1.2.1 in its current iteration,” he laughs.
“It’s a little confusing. We will be renaming it to be user friendly. Like everything with Tezos, it seems a little too complicated in the beginning.”
Garofalo comes from a background of traditional finance. He previously worked for a transfer agent, a custodian bank, and as an equity trader.
He says that what attracted him most about Tezos – beyond its unique self-amending ledger and consensus mechanism – was the fact that its co-founder, Arthur Breitman, had a similar career trajectory.
“My previous industry was dealing with a lot of settlement cycles. Look at stock settlements. I couldn’t believe that in today’s day and age, you have to wait three days and then you have to collateralise these assets. In the meantime, you have trillions of dollars in collateral being wasted sitting in some other bank account because you can’t deliver the shares in time.”
He continues: “If you had an instant settlement, you would free up trillions of dollars for banks. I can only imagine what they would be able to do with that, how many more products and liquidity could be generated.”
He explains that Tezos Commons was one of the very first organisations to be awarded a grant from the Tezos Foundation (the organisation that handled the ICO fundraiser). He says that the Foundation is “sitting on something close to one billion dollars in assets in an award chest to help foster the ecosystem”.
In the beginning, the Commons started up as a group of Tezos enthusiasts. Then they began to host meetups and flesh out the ecosystem, which is when he “stumbled into the role as President for Tezos Boston”.
He explains that Tezos as a smart contract platform is written in the OCaml programming language, which is particularly beneficial for financially weighted smart contracts.
“That’s what really attracted me, I could see the relationship with traditional finance and I could see a crossover,” he enthuses.
He also believes that being a self-amending blockchain allows Tezos to keep up with new technologies and incorporate new features and innovations with ease.
We talk a little about the amendment cycle and how any validator or baker can submit a proposal to make changes to the blockchain. The only requirement is that they bake a full roll, which is equivalent to 8,000 XTZ.
“So, it’s very democratic and inclusive. If someone submits a proposal that no one is interested in, instead of waiting for the typical three months to be voted on, the process of voting is accelerated,” he explains. This is done so that the system isn’t clogged up with unhelpful ideas.
“Using Liquid Proof of Stake (LPoS) means that unlike other blockchains where there is only a certain set of validators allowed, it’s not an oligopoly. With Tezos, it’s much more inclusive.”
He also says that there’s no lock-up period, which further adds to the liquid part.
“It’s liquid as in the ability to come in and out as a delegate and also for the ability for anyone to join as a validator, the only requirement is 8k XTZ”…
… “And a little bit of technical knowledge?” I ask…
He chuckles, “A little, it’s a bit cumbersome in the beginning, but we’re bringing out more material to show people how simple it can be.”
“For example,” he says, “I’ve done a lot of videos. One is called Proof of Jack. Jack is the son of one of the largest bakers in the community. So the idea is that if even a 12-year-old can set up a bakery, anyone can do it. He was able to buy a $500 laptop, enter a few lines of code, download a few packages, and within a day he was up and running.”
Garofolo explains that since he started, Tezos Commons has now held more than 10 meetups in the Boston area. Some of these are just with tech and blockchain enthusiasts and to spread the word about Tezos in a relaxed environment like a restaurant. In other cases, he has arranged for the co-founders to give a speech at Harvard.
He regularly speaks to both blockchain enthusiasts and the wider public about Tezos, from a very introductory level to how to go about creating a dApp on the Tezos blockchain, how to set up as a validator, and the growing use cases for Tezos.
“The Tezos Foundation is really focusing on onboarding companies and projects that are doing security tokenisation,” he explains.
I ask how successful that has been so far seeing as it’s a fairly nascent space. His answer surprises me.
“I believe that it’s been over $3 billion in real estate assets that have already been committed to tokenising on Tezos,” he says.
“We’re seeing a lot of big real estate committing to tokenising on Tezos, so that’s the first domain. What I anticipate further is stocks.”
However, he’s also keen to point out that Tezos has many more use cases than just the tokenisation of securities.
He says that when speaking to Arthur earlier in the year, he asked him if the biggest use case for Tezos being security tokenisation was OK with him. He replied that it was great, but that he didn’t want it to be the only thing.
“It’s very important to communicate that Tezos is a smart contracts platform that can be used for anything,” he confirms.
One big area in which he sees Tezos being applied is public services.
“One of the main problems is corruption,” he says, “so one idea would be to set up a DAO that houses tax money from taxpayers. There can be transparency through a non-fungible token that contains data. Taxpayers could vote on how they wanted the money spent and be able to verify that it was through the transparency of the blockchain.
“Another aspect is health records. Currently, they can be altered or lost. You also have the issue of cross-border information transfer of medical records. Using blockchain technology, we could immediately access our health records no matter where we are in the world.
“Almost any industry you can think of is going to be impacted by blockchain, and a lot of it has to do with immutable ledger technology and transparency.”
In fact, earlier this week, it was reported that the French military will be using Tezos to record judicial expenses on the blockchain.
“Tezos is one of the most advanced blockchains out there because of the governance process, the amendments process, and the base language being a derivate of OCaml,” Garofalo enthuses.
OCaml, he explains, is a solid programming language that developers don’t even need to learn to develop on the Tezos blockchain as they can begin coding in whatever language they feel comfortable.
If you want to find out more about Tezos Commons, visit Tezoscommons.org or the Tezos Foundation website if you’re looking to receive a grant to develop on the network.
If all 82 requests received during the last cycle are granted toward the end of this year, Garafalo says, “We could see the Tezos ecosystem triple in size soon.”
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