One of the biggest problems the bitcoin network faces is on agreement of how to validate transactions on its network. This protocol can affect the resources going into validation, the amount of transactions validated per block and other issues that affect the profitability of mining as well as the viability of the network. In the bitcoin network, parties holding bitcoin can vote on the protocol for validating transactions. Disagreements on this issue has lead to numerous hard forks etc (eg. bitcoin cash). Tezos solves this problem by running a delegated proof of stake system where the the delegates actually get to vote on different aspects of how the network functions. This includes validation protocols, but can also include things like how amendments on the network may happen. Because this is like representative democracy, amendments to the system are more efficient than it would be in a regular proof of stake or a proof of work system. This allows the platform to rapidly adopt to the different innovations in the space.
Ethereum’s network faces limitations in determining the validity of a smart contract. To do this, Ethereum uses what’s called the Ethereum virtual machine (EVM). This allows their blockchain to record the smart contract code as the smart contract writers do. It is important that the EVM describes the smart contract as it is actually written. Discrepancies can create devastating bugs that can lead to the loss of ethers related to a given smart contract. EVM’s process for analyzing smart contract is unnecessarily difficult. The system allows the validation of very complicated smart contracts, but by doing so, it increases the costs of smart contract validation. This increases the possibility of discrepancies as it is not always possible to analyze every smart contract accurately. The Ethereum developer community is currently working its way around this problem, however, Tezos was developed with this problem in mind. They realized that validating most smart contracts will not require tremendous effort. Therefore, they designed a system that allows for validation of most of the simple smart contracts that businesses would want to use. The more complex smart contracts can be analyzed off chain.
Overall, Tezos improves on many of the problems of bitcoin and Ethereum. Considering the adoption of these two platforms, their value proposition is quite high. However, Tezos has also had significant disputes among the members of its board and some of its investors. It was recently found that the President of the board was taking some actions that many think are unethical. While this hasn’t affected the technological development, it has led to a significant decline in the value of its coin. If you believe in the future of this project, the decline in coin price might actually create a great opportunity to buy an undervalued asset.