QTUM is a smart contract platform with a proof of stake consensus algorithm meant to deal with interoperability issues inherent to the proliferation of so many unique smart contract platforms.
As the adoption of blockchain grows and each ICO offers a new walled garden, the issue of balkanization has also become more pressing. While differences in protocol and system architecture have been driven by fruitful iteration of the underlying concepts and technology, their implementation has, thus far, largely been piecemeal and prevented system-wide interoperability of blockchain systems. Due to the potential of blockchain technologies to transform so many aspects of the digital economy, the scope of interoperability is massive and may require decades to fully implement.
QTUM was designed to address the most pressing systems architecture and interoperability issues for the highest-impact application currently available: distributed app (dapp) function. Both leading blockchain protocols, Bitcoin and Ethereum, suffer from intrinsic architectural defects that bar flexible dapp creation and operation. QTUM is solving this issue by creating a dapp abstraction layer that takes the best aspects of each approach and mitigates their biggest flaws. Specifically, QTUM leverages the dapp protocols of Ethereum’s virtual machine protocol to enable dapp transactions without the account balance-specific proof-of-stake issues inherent to ether-based dapps (Ethereum uses account balance to say whether a transaction can proceed). It then marries this improvement to a distributed ledger system based upon the solidity of Bitcoin, while also solving the transaction time problem by introducing consensus nodes that keep only a fragment of transaction histories at any given point. This greatly speeds up transactions while ensuring their security, consensus, and interoperability. QTUM has already been used to create several live dapps even as it continues to roll out improvements to its main architecture.
Like all blockchain assets, QTUM comes with unique risks. Although QTUM has minimized technical risks by taking on a highly-targeted approach to mitigate key issues in Bitcoin and Ethereum and already successfully scaled to thousands of network nodes, it is as-yet unknown how well QTUM will handle 2-3 orders of magnitude increases in network scale. There are no architecture-intrinsic issues that would prevent such scaling; this is simply a risk shared by all new distributed software companies. The biggest risk surrounding QTUM is node management. At present, the vast majority of QTUM nodes operate within the People’s Republic of China, where they are subject to abrupt regulatory change. However, their extensive network in China serves as a hedge against this risk. While the decentralization and protocols inherent to the QTUM network are resilient to such regulatory changes, they may nonetheless affect the continuous operation of dapps and value of the overall project.
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