QTUM’s mainnet launched on September 13th. Exchanges began to swap ERC20 QTUM to mainnet QTUM near the end of September. These are exciting times for QTUM and its community. Along with the mainnet launch came many new updates from the team as well as a series of publicity events that included meetups, hackathons, and a Reddit AMA. In addition, investors are finally able to participate in proof of stake, allowing them to passively earn QTUM while securing the network.
With so much going on for QTUM, it’s not surprising to see a myriad of questions about QTUM from prospective and existing investors alike. Questions range from “what exactly is QTUM?” to “how do I start staking?” I’ve decided to write this blog post to answer some of the more common questions and hopefully have it serve as a beginner’s FAQ for QTUM investors.
Q1. What is QTUM?
At a high level, QTUM is a custom Bitcoin blockchain using proof of stake 3.0 with the Ethereum Virtual Machine (EVM) running on top. In other words, QTUM is a proof-of-stake Ethereum that runs on Bitcoin’s blockchain. This hybrid architecture provides a myriad of benefits:
- QTUM can take advantage of and absorb improvements from both Bitcoin and Ethereum, two blockchains with the largest developer communities in the world. For example, QTUM is compatible with and is already using SegWit. QTUM is also compatiable with both the Lightning Network and Raiden.
- Since QTUM uses the EVM, any Ethereum smart contract can run on QTUM and vice versa. This makes it incredibly easy for Ethereum developers to develop on QTUM. Existing Ethereum dApps can also be easily ported to QTUM.
- Although there are pros and cons to both the Bitcoin blockchain’s UTXO model and Ethereum’s account model, it’s arguable that the UTXO model is better because it’s more scalable and secure. The UTXO model also supports the Simple Payment Verification (SPV) protocol. SPV allows light clients to interact with smart contracts, something that Ethereum cannot do.
Ethereum is planning to switch to proof of stake sometime in 2018. Even then, Ethereum’s proof of stake model will impose a minimum balance on wallets before allowing the wallets to stake. 32 Ether has been a suggested minimum balance. The problem is, not many people can afford 32 Ether and many Ethereum investors will undoubtedly be excluded from staking. QTUM’s proof of stake model, on the other hand, allows wallets with any amount of QTUM to stake.
Finally, QTUM is not just a Bitcoin and Ethereum fork, as many uninformed naysayers like to claim. First of all, it takes an incredible feat of engineering to combine a UTXO blockchain with the EVM. QTUM’s solution to this is the Account Abstract Layer (AAL) that serves as an interface layer between the blockchain and the EVM. The AAL not only allows the EVM to live on top of a UTXO blockchain, it also means that QTUM is not confined to using the EVM as a smart contracts platform. Any other smart contracts virtual machine compatible with the AAL can be used to replace the EVM and the QTUM team has already announced plans to develop an x86 smart contracts virtual machine for QTUM. The x86 architecture is popular, time-tested, and well designed, and a smart contracts virtual machine based off of this architecture will make up for much of the shortcomings found in Solidity and the EVM. For one, it allows developers to program smart contracts in popular programming languages like C, C++, C#, and Java.
Finally, I have to mention that QTUM is not just using Bitcoin Core code right out of the box. The QTUM team has developed and augmented QTUM’s version of Bitcoin Core with what’s known as the Decentralized Governance Protocol (DGP). DGP allows owners of QTUM to vote on and enact changes to a limited set of blockchain parameters (e.g. block size and block time) without needing hard forks. This not only allows QTUM to efficiently adapt to changing network conditions, it also allows quick recovery from certain kinds of attacks on the network, issues both Bitcoin and Ethereum have struggled with in the past.
Q2. What is QTUM’s roadmap?
Brett from the QTUM team wrote an excellent forum post detailing QTUM’s roadmap.
Q3. What gives QTUM value?
QTUM derives its value the same way Ether derives its value. Both can be considered fuels for their respective smart contract platforms. This means that the more demand there is to use either platforms, the more valuable each platform’s fuel is.
Because QTUM uses proof of stake while Ethereum is still stuck with proof of work, if all else is equal, QTUM are actually more valuable than Ether since they can participating in staking to generate a passive income.
Q4. What is the total supply of QTUM? What is the blockchain’s inflation model?
100 million ERC20 QTUM were issued. Since the launch of the mainnet, only a portion of these tokens were swapped to mainnet tokens. With the mainnet also came new QTUM from block rewards. As such, the total theoretical supply of QTUM right now is a little bit over 100 million.
QTUM blocks will always reward miners with new QTUM. This means that in theory, the total supply of QTUM is always growing, i.e. there is always going to be inflation. This is necessary to incentivize token owners to stake their tokens, thus securing the blockchain. It is important to keep in mind that although the total supply grows in constant increments, the rate of inflation diminishes as the total supply goes up while the rewards per block remain constant.
The current block reward is 4 QTUM. Block time is 2 minutes. This results in approximately 2880 QTUM generated per day.
Q5. How do I stake QTUM?
Staking QTUM is incredibly simple. This is all you need to do:
- Send QTUM to wallet
- Wait 500 blocks for transaction to mature and start staking
- Keep wallet running
Q6. How does QTUM staking work? Why should I split my balance into multiple transactions?
Each transaction sent to a QTUM wallet takes 500 blocks (or confirmations) to “mature” and start staking. The network weight is the total number of staking QTUM. This weight determines the probability 1 QTUM will mine the next block; the larger the weight, the lower the probability.
Currently, a QTUM block is set to be mined every 2 minutes. Each block rewards its miner with 4 QTUMs plus the fees in the transactions within the block. If an unspent transaction in a wallet (refer to the UTXO model to understand what this means) mines a block, it is considered to have been “staked” and has no chance to mine a block for the next 500 blocks. As such, it is expected that the number of staking QTUM in a wallet is lower after the wallet has mined a block. This is also why it’s recommended that you split your wallet’s balance into multiple transactions. The more transactions you have, the less QTUM is removed from staking once you mine a block. Depending on the total number of QTUMs you have, you might want to consider 250-1000 QTUMs per transaction.
There is no concept of “progress” in staking QTUM. Mining a block is completely based on probability. You can think of it as a raffle being held every time a new block is generated. 1 QTUM in a wallet is one entry into the raffle for that wallet.
If you’re looking for an in depth description of proof of stake 3.0, the proof of stake system QTUM is using, check out the blog post, “The missing explanation of Proof of Stake Version 3”, by QTUM cofounder Jordan Earls.
Q7. I mined a block but my reward is only 0.4 QTUM?
The immediate reward for mining a block is 0.4 QTUM. After 500 blocks, the rest of the 3.6 QTUM will be paid to the wallet in 9 consecutive blocks.
Q8. How do I know when staking is working?
If you’re using the GUI version of QTUM Core (v0.14.3) wallet, look for a lightning symbol at the bottom right. If the symbol is hollow, the wallet is not staking. If the symbol is filled, the wallet is staking.
If you’re using the QTUM Core (v0.14.3) wallet command line tool, run the command
getstakinginfo. If the return value contains
"staking": false, the node is not staking. If the return value contains
"staking": true, the node is staking.
Q9. Will I continue to stake if my computer’s turned off?
To participate in proof of stake, QTUM’s wallet software needs to be running and communicating with the other nodes in the network. This means that your computer needs to be turned on to stake.
Q10. What is the most efficient way to stake QTUM?
Even though proof of stake 3.0 requires an insignificant amount of energy to run, it’s still desirable to use as little energy as possible. The most efficient and accessible way to do so right now is through a Raspberry Pi computer.
Cryptominder has written a fantastic tutorial on staking QTUM using a Raspberry Pi 3.
Q11. Etherscan.io for QTUM?
Q12. What dApps are building on QTUM?
Prior to the mainnet launch, QTUM announced that there were 17 dApps building on it. A few of them have been announced:
With the mainnet released, there will be significantly more projects choosing to build on QTUM.
Q13. What’s the difference between QTUM and NEO?
Check out my article “NEO vs QTUM: An Objective Comparison”.
If you’ve enjoyed this blog post…
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Much thanks if you do, a lot of time and effort has been put into researching QTUM.