TEZOS “The self-amending cryptographic ledger”

I learnt to program using FORTRAN, later I taught myself C. I was mesmerised by the ability in C to write code that six months later even the writer could not understand. Object Orientated Programing seemed very clever, but to be honest, classes as used in C++ have for ever eluded me. Most of my programming involves solving numerical problems. As such I was an early adopter of a new package/language called Mathematica®.

Initially I used it in the manner I was used to from C and FORTRAN; as a procedural language. But, as time passed I started delving into its ability to do functional programming. When the light bulb lit, I was hooked, why hadn’t I always thought like this. Basically a functional language uses functions to transform the input into the output.

Bear with me for a moment: Consider in mathematics that the equality sign is superfluous since every equation can be assumed to equal zero. Writing a correct mathematical statement and applying transformations to it, we can arrive at another mathematical statement line by line. Assuming that the initial statement is true and we have applied the transformations correctly, we are logically certain of the truth of the final statement. This is the beauty of functional programming it can be proven to be correct, in a similar manner to a mathematical proof. Contrast this with procedural languages where a typo can be catastrophic.

It’s clear I like functional programming languages, so what? The point is that Tezos is being programmed in one called OCaml. I am unfamilar with this particular language but lwn.net quotes Xavier Leroy as saying “OCaml delivers at least 50% of the performance of a decent C compiler.” I have looked at the user documentation: It does not look difficult to learn. Tezos hopes to create a system similar to Ethereum; they will provide smart contracts with a Turning complete language. To prevent infinite loops Ethereum has the concept of gas; Tezos also limits the number of steps a computation can use. Of course the computation can call another contract that can continue the calculation, so a limit on the number of steps is actually not a hard limit. To pay for the computation Tezos is proposing a new “Token”. So far, so what? Sounds like a copy of Ethereum written in a functional language.

What’s new and exciting is that because they are using a functional language the protocol can be changed by the stakeholders. This is because any changes can be verified by the protocol itself. This represents a decentralisation of governance, no more Bitcoin core or Ethereum foundation. Sensibly the developers are proposing a Swiss foundation that will have veto power over the system for the first year. From then on the stakeholders can evolve the system as they see fit.

Also there is no mining, it will be a POS system. There’s a lot of hype around this launch. The terms are a two week issue and early adopters get bonuses starting at 20%. No cap on amount raised. So only advantage of subscribing early is the 20% bonus.

My Scorecard

Originality: Definitely this is an absolutely awesome idea. Decentralised governance is an obvious idea, but how to achieve it?

Team: Team looks more than competetent to deliver on the project.

Platform: The language they are using looks up to the task; they are issuing an entirely independent Token/Coin/Currency.

Valuation: This is a difficult one, Bitcoin is a currency, a means of payment. Granted it’s a high tech one with abilities that supercede anything that has come before, but to my mind it’s still a currency. Ethereum is an economic system as such its value is the value of the network. How much can an economy be worth? Definitely worth more than the value of every individual or company operating within it. In the same way Tezos has the ability to become enormously valuable. If you ask me, investing in it at the start is like buying a lottery ticket but with much better odds.

Legal: The Tezos token gives you the right to participate in the network/economy. Given that Ethereum has not been attacked I think Tezos should be fine.

Fraud: Doesn't look like a scam.

Liquidity: Once you have subscribed you cannot trade out of the tokens until the system is up and running. Bitmex will offer futures contracts on the token so hedging should be possible.

The launch will take place in June 2017. I will be participating. I will also investigate running a node and contributing to the Proof of Stake verification. Not that it needs saying, but just in case, do your own due diligence. This not investment advice and don't invest more than you could comfortably afford too lose.