With hundreds of cryptos available and new ones popping up every day, there is no shortage of options for those looking to delve into trading cryptocurrencies. As in any industry, changes can occur that are truly revolutionary, and not simply marketing hype to entice the gullible, misinformed and visceral. Tezos has the potential to be such a revolution.
Tezos is touted as the world’s first self-amending crypto ledger. Tezos doesn’t split (also called fork in cryptocurrency lingo) into different blockchains. Why is this important? A fork is a split in the blockchain of a specific crypto community. This can occur due to differing ideologies in the community that cause a rift in the opinion among its members. The problem with forks is that often they do not allow for transactions to take place between the old and new blockchain, due to programming related issues.
And this is where Tezos comes into play. A self-amending ledger that will supposedly never require blockchain separation to occur. The Tezos ledger is compatible with major cryptocurrencies, including Bitcoin and Ethereum. The ledger is a pure democracy, with Tezos implementing a seed protocol that allows users to vote on changes, including the protocol itself.
Cryptoassets are highly volatile unregulated investment products
Tezos vs. Bitcoin
- Tezos was created by a former Morgan Stanley analyst. It has the trappings of a proper financial service, including a name behind the company, a website, an address and a plausible paper trail. Bitcoin has none of these.
- Tezos is more insular than Bitcoin and is governed by centralised regulations. Bitcoin is still widely considered the Wild West of financial assets, susceptible to volatility according to its trading history.
- For better or worse, Bitcoin has a long and expansive history, while Tezos is in its infancy. Financial assets without a proven track record are prone to speculation of fraud and increased mistrust. This is not to say Tezos is illegitimate, but rather an unknown ‘commodity’.
What drives Tezos’ prices?
There are several factors that can affect the value of a cryptocurrency. Much like other cryptos, Tezos’ price can rise or fall due to changes and events on its blockchain. If Tezos is hacked, the value could fall. On the other hand, if Tezos implements a widely heralded new platform upgrade, the value could rise.
Tezos is not immune from the highs and lows of daily trading, often benefiting or suffering from the same external influences as any other financial asset. Bitcoin volatility has traders worried? They may choose to hedge their bets on Gold. The European Central Bank imposing unfriendly trading regulations? Traders may choose to abandon the Euro for cryptocurrency.
Cryptocurrency competition can also have ramifications on value. It must be assumed that all traders have a maximum they are able to spend on cryptocurrencies. But with more crypto options available, traders may not be able to allocate the required funds and must be more selective with which virtual coin they trade.
Tezos is ideal for traders looking for their first foray into the cryptocurrency market. It provides increased stability due to company regulations and guidelines, limiting the possibility of fraud and provides protection from malicious traders.
Tezos still provides enough price fluctuations to offer day traders short-term profit opportunity. Long-term trading is also possible with Tezos and traders are highly encouraged to track the exchange’s performance over the next several months, as it can take a new cryptocurrency time to “get its feet off the ground.”
Cryptoassets are volatile instruments which can fluctuate widely in a very short time frame and, therefore, is not appropriate for all investors
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments. This material has been prepared without regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not, be taken as a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilising publicly-available information.