By and large, if significant organizations have not rejected cryptocurrency as a matter of principle thus far, they have not shown any sign of wanting to thoroughly integrate it either. A lack of interoperability between the various blockchains and smart contract applications is often cited as one of the main reasons why businesses and institutions have a hard time embracing it fully. Qtum (QTUM) means to challenge the status quo by offering a decentralized, open source, blockchain application platform with the ability to run smart contracts through an improved version of the Proof of Stake consensus on a wide array of virtual machines.
Let us discover Qtum and its hybrid blockchain through our in-depth Qtum guide.
The Qtum cryptocurrency: Introduction and definition
Qtum (QTUM), pronounced “quantum”, defines a blockchain project and its smart contract platform, used mainly for DApp development. What makes it so special is its blockchain’s unique characteristics, which draw from the most prominent crypto projects currently occupying the top spots at the market cap: Bitcoin and Ethereum. The team’s firm belief is that legacy systems still in place are not aging well and that organizations are in need of faster, cheaper and more automated solutions.
Yet, while blockchain technology does hold the answers to such requirements, we are not seeing self-executing supply chain being managed through it or smart contracts truly changing the world of business. According to the founders of Qtum (QTUM), the Ethereum network comes with a number of unsolved flaws, particularly in terms of stability or lack of interoperability with Bitcoin. The latter, on the other hand, is among the most stable options out there, but it does not support smart contract programming. In addition, its Proof of Work consensus is known as one of the least energy efficient as it relies on mining to be achieved.
Qtum (QTUM)’s goal is to offer what could be defined as the best of both worlds in the form of a “hybrid solution”. It combines the security and the stability of the Bitcoin blockchain with the ease of programming provided by Ethereum’s network. The creation of new decentralized apps is made more straightforward thanks to a suite of pre-built smart contracts, blueprints and tools aimed at developers looking to design business-oriented solutions. Finally, Qtum promises impressive scalability.
How does Qtum (QTUM) work?
Qtum (QTUM) uses the Ethereum Virtual Machine (EVM) to support smart contracts and layers it on top of Bitcoin’s blockchain, following a UTXO model.
The Qtum (QTUM) team identified as one of the main reasons for the two systems’ incompatibility the fact that Ethereum relies on account balances rather than on unspent transaction outputs. This method, akin to what banks typically practice, provides a solid and convenient base around which to write code (which explains why it is Ethereum’s solution of choice). However, it is not as well suited to transaction validation as Bitcoin’s UTXO verification system. Bitcoin’s ledger marks value using unspent transaction outputs (UTXOs), which allows it to process a large number of transactions at the same time, thus improving scalability and security.
To deploy Ethereum’s Virtual Machine and its account balance-based system on the Bitcoin blockchain, Qtum (QTUM) faced a genuine technical challenge, which it solved using an Account Abstraction Layer. This layer operates the conversion from the blockchain’s outputs into account balances to make transferring information between EVM and Bitcoin’s UTXO blockchain achievable. This results in a highly adaptable system where updates made to one of the blockchains directly translate in an updated version of Qtum. Any Ethereum DApps are compatible with Qtum too.
One of the main advantages of Qtum is that it supports data feeds and oracles, making it possible for external devices to interact with the platform’s smart contracts and to provide them with real-world information. This feature broadens the applications of Qtum (QTUM), which also handles its smart contracts in a completely unique way, using a PoS consensus and its own token: QTUM. This makes the Qtum network more compatible with institutional perspectives. Thanks to Proof of Stake, which is not as resource intensive as PoW, the system support light client nodes. Light clients are supported along with smart contract management, which can even take place from a smartphone. Qtum’s UTXO technology indeed enables simple payment verification (SPV) from light clients which can operate without running a full node. This huge achievement opens mobile applications to the promises of blockchain technology.
Why use Qtum?
Thanks to its use of the Bitcoin code base, Qtum (QTUM) has the ability to support any improvements made to its blockchain, such as Sewgit and Lightning, all while hosting any Ethereum-based smart contract or DApp. This makes Qtum relevant to a wide array of businesses that could not find a workable solution to embrace blockchain technology up until now.
It is also worth noting that Qtum (QTUM) offers a compelling wallet infrastructure. Its proprietary desktop wallets, QTUM Core (Windows, Mac and Linux) and QTUM Electrum (Windows and Mac) allow stakers to earn dividends passively. Annual returns average 8%, which is far from insignificant.
How to buy Qtum (QTUM) on Bitit?
Supported pairs for QTUM on most DEXs include QTUM/BTC and QTUM/ETH, which is entirely logical based on how Qtum is built. Some also pair it with USDT, USD and sometimes even NEO. Exchange platforms are therefore one possibility, though liquidity is not guaranteed.
Another and decidedly simpler option is to go through Bitit, which allows you to purchase Qtum (QTUM) rather than to exchange it. This means you can buy QTUM using your credit or debit card, a bank transfer or even cash to pay in a wide selection of fiat currencies.
Just open an account through a very easy process, check the exchange rate for QTUM straight from Bitit’s Dashboard and place your order as you would from any online shop. Bitit is a non-custodial platform which delivers your QTUM directly to your personal wallet, offers global coverage and practices low fees.
How to store QTUM?
As stated before, Qtum (QTUM) possesses its own set of wallets which provide compelling characteristics. Qtum Electrum, for instance, features multi-signature support to increase security. As for Qtum Core, it allows users to receive and store funds with smart contract capability. Finally, the Qtum Web wallet is praised for its simplicity and the basic nature of its fund management interface.
However, if you have a preference for third parties, multi-platform alternatives, Jaxx Liberty, Atomic Wallet and Guarda Wallet are all reputable options.
Finally, physical alternatives include the famous Ledger Nano S and Nano X. These devices are likely to start supporting QTUM staking without the need for a separate client.
Qtum news reports that, as of June 29th, the system’s offline staking testnet has also been available, which, if successful would make it the first offline staking option to be supported on a major blockchain. One of the main drawbacks of Qtum used to be that some holders did not want to take the risk of carrying out those activities or refused to run a full node. Offline staking offers a very convincing answer to these concerns and could create a bright future for Qtum (QTUM).