QTUM provides a platform for new kinds of decentralised applications (dapps) and smart contracts. It is a Bitcoin Ethereum hybrid in the sense that it consists of both methods of operation. QTUM is a scarce asset, with halving done every 4 years to maintain a finite supply.
Affectionately dubbed the “Bitcoin-Ethereum Frankenstein,” some see Qtum as successfully melding the best of on- and off-chain network operability.
Qtum is an innovative UTXO-based blockchain that is smart contract-capable and compatible with the Ethereum Virtual Machine (EVM). Qtum’s innovative technology is well-suited for decentralized finance (DeFi) and Internet-of-Things (IoT) applications, while its native QTUM coin enables users to take part in network governance.
- Qtum: An Amalgamation of Bitcoin and Ethereum
- Neutron: Qtum’s Virtual Machine Middleware Connectivity System
- QTUM Coin: A Hybrid On-Chain and Off-Chain Governance Model
- Qtum Proof-of-Stake
- Qtum’s Adoption Potential
- A Qtum Leap Forward?
Launched in 2017, Qtum (pronounced “quantum”), is a hybrid blockchain that combines aspects of various leading blockchain networks into a new protocol. The most notable feature of Qtum is its use of an Account Abstraction Layer (AAL) to integrate its Unspent Transaction Output (UTXO) model — as found on Bitcoin — with the Ethereum Virtual Machine (EVM) and Ethereum’s account model. This integration makes Qtum compatible with both Bitcoin and Ethereum, and allows for smart contracts to operate on a UTXO-based blockchain.
Qtum’s ecosystem is powered by its native coin, QTUM. Qtum uses a Proof-of-Stake (PoS) consensus mechanism, an innovative virtual machine (VM) middleware translator AAL, Qtum Neutron middleware architecture to facilitate connections between blockchains, and a hybrid on-chain and off-chain governance system. Promising use cases for Qtum include smart contracts, Internet-of-Things (IoT) applications, decentralized finance (DeFi), and decentralized applications (dApps). Examples of projects that Qtum hosts include QuickCash, a Chinese yuan stablecoin; Robin8, an influencer search engine; and QiSwap, a DEX.
Qtum: An Amalgamation of Bitcoin and Ethereum
Qtum offers powerful solutions that enable blockchain interoperability between the Bitcoin and Ethereum networks. Bitcoin’s UTXO model and Ethereum’s account model have different approaches to transacting on the blockchain that are naturally incompatible. In Bitcoin’s UTXO model, wallet balances are measured through individual transactions on the blockchain (“unspent” transactions), while Ethereum’s account model creates a balance held within an account, which is more akin to a traditional bank account. Qtum connects the Bitcoin and Ethereum transaction models using an account abstraction layer (AAL). The AAL serves as a translator for the UTXOs (Bitcoin’s UXTO mechanism) that normally wouldn’t be compatible with an Ethereum-style smart contract. The AAL, in essence, allows UTXOs to be processed by Qtum’s virtual machine and converted into a spendable Qtum transaction, which is itself compatible with Ethereum’s smart contracts.
This innovation enabled Qtum to create the world’s first UTXO-based smart contract platform. Proponents say that this combines the best of both blockchains: the rock-solid security of the UTXO model, and the capable smart contract framework of Ethereum. Qtum claims that its approach has resulted in faster speeds, lower costs, and a higher degree of smart contract flexibility when compared to Ethereum. Qtum also borrows Bitcoin’s Simple Payment Verification (SPV) system, which allows smart contract execution on mobile devices.
Neutron: Qtum’s Virtual Machine Middleware Connectivity System
During 2020, the Qtum team finished architecting Neutron, a newly designed universal VM translator that acts as middleware for the software development stack. Neutron was built to translate various VM coding languages into an easily readable framework that the Qtum blockchain can process. This is intended to streamline the execution of smart contracts and their ability to be upgraded, while making Neutron a connective layer between smart-contract enabled blockchains.
Neutron uses the Rust programming language for smart contracts in order to provide enhanced performance and security. The Neutron Application Programming Interface also allows the various layers of Qtum’s architecture to communicate with each other. Middleware plays a vital role in providing advanced functionality for lower-level protocols such as the network layer, blocks, and transactions.
QTUM Coin: A Hybrid On-Chain and Off-Chain Governance Model
Qtum’s hybrid blockchain also has a hybrid governance protocol that aims to employ the optimal aspects of both on-chain and off-chain structures. Qtum’s Decentralized Governance Protocol (DGP) is all on-chain, meaning it lives on the blockchain. Qtum has the ability to change the block size and smart contract fee structures without a hard fork. Other protocols have struggled with hard forks and Qtum’s DGP is positioning itself as a better way to enact these types of changes. However, hard forks would still be necessary to implement more comprehensive protocol modifications.
Qtum’s off-chain governance is run by Qtum’s own non-profit, the Qtum Chain Foundation. Qtum claims that its hybrid model of on-chain code governance and offline human governance combines the best of both worlds: allowing for both decentralized Qtum code governance and practical, human-led development decision making.
Unlike Bitcoin, which uses a Proof-of-Work (PoW) consensus model, Qtum uses a Proof-of-Stake (PoS) consensus mechanism. A 2020 hard fork activated offline staking, where a user may make a non-custodial delegation of their coin address to be staked by an on-line Super Staker, allowing secure participation without the need to run a staking node 24/7.
Qtum stakers that confirm blocks receive compensation in the form of newly minted QTUM coins, as well as that block’s transaction and smart contract fees. Qtum block times are among the most rapid — approximately every 32 seconds for 70 transactions per second — while block rewards halve every four years, much like Bitcoin.
Qtum’s Adoption Potential
In addition to its ability to migrate Ethereum smart contracts to its own protocol, Qtum supports a variety of popular programming languages and code libraries, which may encourage more development on the Qtum protocol itself. QTUM also offers proprietary wallet options and hardware wallet support. Qtum is compatible with Bitcoin gateways, Ethereum contracts, and dApps — and its growth model is contingent upon maintaining this interoperability, even as the Qtum ecosystem evolves. This may encourage some Ethereum developers to engage with the Qtum ecosystem in years to come.
A Qtum Leap Forward?
Affectionately described as a “Bitcoin-Ethereum Frankenstein,” some see Qtum as a combination of the best aspects of Bitcoin and Ethereum. As the first UTXO-based smart contract blockchain, Qtum combines some of blockchain technology’s most innovative features into one protocol. Additionally, its compatibility with the EVM gives it the potential to play a central role in DeFi, the IoT ecosystem, and more. It also offers an improved user experience, with low transaction fees, high transaction throughput, and the ability to participate in governance — a quantum leap forward for the crypto ecosystem.
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