What is Tezos?

Tezos is an open-source platform for assets and applications that can evolve and upgrade itself without having to split the network. It enables stakeholders to govern protocol upgrades and to implement innovations seamlessly. Tezos provides a platform to create smart contracts and build decentralized applications that can't be censored or shut down. It also allows for formal verification, which helps to increase security by mathematically proving properties about programs. Furthermore, Tezos uses a proof-of-stake consensus mechanism that rewards participants for contributing to the network's security and stability. Participants must make a security deposit to participate in the consensus process, and dishonest behaviour is penalized. Users who do not want to participate in the consensus process can delegate their rights to other users.

What is baking?

“Baking” is the act of signing and publishing blocks to the Tezos blockchain. Bakers are a crucial component of the Proof-of-Stake consensus mechanism by ensuring that all transactions in a block are correct, that the order of transactions is agreed upon, and that no double-spending has occurred.

To bake blocks, a baker needs to participate in Proof-of-Stake, which requires a minimum of 8,000 XTZ (1 roll). The more rolls of tez that a baker owns, the higher your chances are at baking blocks and earning baking rewards.

What is delegating?

If someone does not have 8,000 XTZ or does not want to set up computing infrastructure to bake blocks, they may delegate their coins to a baker (aka "delegate"). Delegating lets coin holders (i.e. "delegators") "lend" their coins to a baker (i.e. a "delegate"), giving the baker a higher probability of being selected to bake and endorse blocks. In practice, bakers usually share the additional revenue generated from the delegated tokens with the coin holder. Importantly, this process does not actually transfer ownership of coins and hence the baker cannot spend or control the XTZ delegated to it, ensuring that bakers cannot appropriate the delegators' funds.

Who Created Tezos?

Arthur Breitman and Kathleen Breitman are the two main creators of Tezos. They were joined by a group of developers and researchers to create the platform. Arthur and Kathleen have backgrounds in mathematical finance and computer science respectively. Arthur was a quantitative analyst at Goldman Sachs and had experience working on Wall Street. Kathleen was a business analyst at Bridgewater Associates, a hedge fund company. The team worked for two years to develop the Tezos protocol and platform. Tezos was officially launched in 2018 and has since become a major player in the cryptocurrency space.