What is Qtum?
Bitcoin’s ledger uses a model called UTXO, which stands for Unspent Transaction Output. What that means is that every transaction on the Bitcoin blockchain is a reference to one that came before, and anything unspent from the previous transaction (not sent to a new recipient) is sent back to the sender as change. The Bitcoin blockchain doesn’t track the balance of an account, it just tracks transactions, and builds new transactions from old ones. The UTXO model allows for a small degree of privacy (assuming a user uses a new address for each transaction) and is more compatible with certain types of scaling paradigms.
Ethereum works more like a traditional bank ledger, where each account has an associated balance. Everytime you send or receive ether, your balance on the global ledger is updated with your new balance. The account-based approach is easier to get a mental grip on, which is a big help for new developers, and also can lead to large space savings since a record of every transaction isn’t needed. The accounting model also works better for Smart Contracts, because a Smart Contract may have many outputs, along with complex logic that can’t be captured in Bitcoin’s simple scripting system.
QTUM – Combining Bitcoin and Ethereum
Qtum is cryptocurrency and Smart Contract platform that aims to combine the best of both worlds. It features a layered approach, where transactions are handled by a modified Bitcoin layer and Smart Contracts execute in an Ethereum Virtual Machine. In the middle, holding the two technologies together is an Account Abstraction Layer, which maps the Bitcoin UTXO approach to the Ethereum account-based system.
One of the primary drivers of this Frankenstein-esque approach was the desire to have a blockchain that would allow for light and mobile clients to execute Smart Contracts. This isn’t possible with Ethereum’s account-balance approach, but Bitcoin’s “Simple Payment Verification” (SPV) is perfect for light and mobile clients. In Qtum, light clients can connect to the blockchain using SPV and execute Smart Contracts running in the Qtum virtual machine.
Another benefit of combining Bitcoin and Ethereum technologies is increased scalability. While Ethereum right now can handle around 15 transactions per second, Qtum has been tested at over 60. Jordan Earls, the lead developer on Qtum, has stated that increased scalability will likely lead Qtum down the path of a layered network (similar to Ethereum’s proposed Sharding solution) or to off-chain channels (similar to Enigma).
Unlike either Bitcoin or Ethereum, Qtum works on a Proof of Stake consensus algorithm.
Qtum has already started gaining a share of the Smart Contract market, with many ICO’s and distributed Apps already deployed. Since Qtum uses the Ethereum Virtual Machine, developers who are already familiar with Solidity, the main Ethereum programming language, will find switching to Qtum to be relatively painless. Robin8, a Qtum blockchain-based advertising solution, concluded their ICO in less than one minute.
Qtum recently announced a partnership with Baofeng, a Chinese video portal giant. Baofeng is going to help launch 50,000 full Qtum nodes, which would make Qtum the largest decentralized cryptocurrency network in the world, with more full nodes than Bitcoin and Ethereum combined.
X86 Virtual machine
Qtum is currently working to develop a new virtual machine based on the x86 architecture, which would open the door to Smart Contracts written in programming languages other than Solidity. The first languages targeted will be C++ and Rust, with Go likely following shortly thereafter. Developing a new virtual machine is a large and difficult task because of the more opcodes available to the programmer, the more potential for mischief. If Qtum can offer a secure virtual machine that is used by developers with non-blockchain backgrounds, Qtum may become a top-tier choice for Smart Contract development.
Standard library for programmers
In addition to the x86 VM, Qtum also is working on a Standard Library for Qtum developers to use. A Standard Library is like a set of ready-made tools that have been thoroughly tested and vetted, both for correctness and efficiency. Ethereum lacks a Standard Library, meaning that many developers end up recreating common functions, such as string comparison. Qtum hopes that a Standard Library will speed development, increase security, and even reduce gas costs.
Qtum is one of the most interesting cryptocurrencies on the market, with a working product that’s being used already to develop distributed applications and host ICOs. By combining the best aspects of Bitcoin and Ethereum, it may have found a winning combination.