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What is QTUM?

2018-12-04 | QTUM

QTUM is a cryptocurrency which means it’s a decentralized network allowing for token transfers between participants. Cryptocurrency aims to allow peer to peer transfers of value among other things without relying on a trusted 3rd party like a bank or a brokerage. The oldest and most known cryptocurrency is bitcoin, who’s aim is to primarily be a medium for exchange and storage of value and also a payments platform. Although this last function has become increasingly difficult to fulfill given bitcoins technical limitations of transaction price as well as transaction speeds.

The second most known cryptocurrency is Ethereum a smart contract platform aiming to become more than just a medium of value but being programmable money. It’s aim is to allow users to run small decentralized applications called Dapps, also known as smart contracts. These Dapps allow far more advanced functions beyond just the capabilities of Bitcoin. A smart contract for example would allow one to make an exchange that runs purely on smart contracts with not server required. The smart contract would then become the trusted 3rd party (the exchange) that plays the intermediate between 2 traders looking to make a trade. Since smart contract are essentially just programs that are written on the blockchain they are verifiable for both parties.

Now the aim of QTUM is to be a sort of hybrid aiming to be both. QTUM want’s to be a payments platform that also has smart contract capabilities and is for the most part compatible with the EVM (the Virtual Machine on the Ethereum platform that runs the smart contracts). This is not easy to do seeing as Bitcoin and Ethereum have 2 different underlying technologies. Bitcoin uses what is know as UTXO model while Ethereum uses Account Model as its underlying base technology. Seeing as these 2 are not compatible the task for QTUM was to create a hybrid between these 2 base technology’s. To do so they have created a base technology known as Account Abstraction Layer which acts as a bridge between the EVM and the Unspent Transaction Output model of Bitcoin Core. Their aim is to have Oracles and Datafeeds from trusted sources to allow programmers to use information in Smart Contracts from outside of the blockchain. For example a sports betting platform running on smart contracts that uses a trusted and verified datafeed to input the actual game results.

Also QTUM hopes to be more user friendly then Ethereum and fixing some other shortcomings like accessibility to mobile users as well. Roughly a third of internet traffic is generated by smartphones and similar mobile devices. Capturing that userbases is incremental to not just blockchain in general but also to the smart contract platform that wants to take the throne. A large part of this is QTUM’s Simple Payment Verification Protocol that allows smart devices to easily sync with the network without having to download the whole blockchain and thus not requiring tons of storage of bandwidth.

On top of that QTUM has high goals of catering to businesses in the future. With specialized business integrations as one of its main targets on the roadmap. Also QTUM is the first smart contract platform that uses a Proof of Stake (PoS) protocol instead of the more common Proof of Work (PoW) protocol that for example Bitcoin uses. This gives QTUM both environmental (less energy consumption) and decentralization (Network secured by many decentralized stakers instead of a select few large mining farms) advantages over a PoW blockchain.