Tezos (XTZ +1.76%) is the vision of a husband-and-wife team who wanted to build a self-amending blockchain. It's governed by holders of its native cryptocurrency, the XTZ token. Since it's capable of running smart contracts, Tezos is a versatile platform that can be used for many purposes, including developing decentralized apps (dApps) and minting non-fungible tokens (NFTs).
The project quickly gained support and raised hundreds of millions in funding. However, Tezos has also had some bumps in the road, including legal issues and infighting between the creators and the Tezos Foundation. Keep reading for the full story on this blockchain protocol.
Unique risks
Tezos has been an up-and-down blockchain project, going through big wins and some challenging low points. In a crowded market of smart contract blockchains, Tezos has fallen behind the competition.
The fact that the founders of Tezos and the founder of the Tezos Foundation started feuding after their ICO wasn't good for the project's reputation. The lawsuits regarding the Tezos fundraiser were an even bigger scandal. Tezos has resolved those issues, but they're still a black mark that likely took some attention away from development.
Although Tezos is a useful blockchain platform, it's far from the only one with smart contract functionality. It faces stiff competition from Ethereum, which is the largest blockchain for DeFi by a wide margin. There's also Solana (SOL +2.32%), Cardano (ADA +1.52%), and Avalanche (AVAX +2.18%), all of which have carved out greater market share than Tezos.
Is Tezos a good investment?
As previously noted, Tezos is in a very competitive space. There are several noteworthy programmable blockchains out there. The question for investors is which will have long-term success.
Tezos has key advantages that could help it do well. Its self-amending governance system is a great innovation that gives stakeholders control and helps it avoid issues other blockchains have had during upgrades. Investors can also earn more XTZ tokens by staking Tezos.
Tezos promotes its security as a strong suit, claiming it’s a popular choice for security tokens, a type of cryptocurrency that is a digital asset representing an asset with real-world value. Multiple companies operating in this space, including tZero and Elevated Returns, are using the Tezos blockchain. Tezos also touts its formal mathematical verification of smart contracts, multi-signature contracts, ease of network upgrades, and specialized tools and support for security token compliance.
It's impossible to say whether Tezos will make it, but it certainly has potential. If you decide to invest in cryptocurrency, remember that it's a volatile market, so you should only invest what you can afford to lose.
How to buy Tezos
One of the nice things about Tezos is that it's easy to buy. Many crypto apps and exchanges list it. Coinbase, Kraken, Crypto.com, and Gemini are all good choices because they sell Tezos and support Tezos staking, allowing you to earn rewards on what you buy.
If you already have an account with a crypto exchange, check if Tezos is available to purchase. If not, you can get it by registering for an account with any of the aforementioned exchanges.
Tezos focuses on what's important for a blockchain project since it's highly secure and can upgrade itself as necessary. If it's able to increase commercial adoption, it could pay off for investors.
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