What is cryptocurrency Zilliqa (ZIL) and how does it work?

What is Zilliqa

Zilliqa is a public blockchain designed to tackle the issues of scalability and throughput facing many cryptocurrencies, including Bitcoin and Ethereum. To achieve this, Zilliqa deploys sharding to improve the speed of transactions and create a scalable and secure platform by dividing the network into nodes that run processes in parallel.

The token’s developers claim that Zilliqa is the first blockchain to rely entirely on sharding to solve the issue of scalability, which they say it accomplishes successfully. According to the token’s white paper, sharding helps the Zilliqa blockchain achieve a transaction speed around a thousand times quicker than that of the Ethereum network.

The fact that Zilliqa is a permissionless blockchain network with high throughput means that developers can use it to host decentralized apps and execute smart contracts without the main issues facing many older blockchain platforms, such as congestion or high gas fees.

How Does Zilliqa Work?

Central to the concept behind Zilliqa is its reliance on sharding technology to overcome congestion. But what is sharding and how does it work? Simply put, sharding is the division of a network into multiple clusters of nodes, called shards. This means that when miners are called upon to verify a transaction they can do so in parallel. In other words, shards can process transactions separately from each other, rather than all together in one big group that gets slower and slower the larger it is, as is the case with most other cryptocurrencies. In a network that relies on sharding, the larger the network, the faster it can process transactions because the more shards there are, the more transactions they can process at the same time.

A potential problem with sharding can be the difficulty of reaching consensus for transaction verification. The consensus protocol of some tokens, like Bitcoin, requires half of the nodes to agree for a transaction to be verified. This can be quite a cumbersome process that Zilliqa avoids with its hybrid consensus mechanism, which is faster and uses less computing power to process transactions than approaches used by legacy blockchains like Ethereum and Bitcoin. It does this by delegating verification to the shard level, where nodes do not have to process whole blocks of information. To ensure that this verification process is valid, Zilliqa has a second layer in which a group of nodes forms a delivery service committee that combines the smaller blocks into one whole. The DS committee is therefore able to access the whole blockchain to ensure that the verification is valid. 

Who Are the Founders of Zilliqa?

Zilliqa was created in 2017 and was first made available for sale as an ERC-20 token in January 2018. The tokens were later transferred to the Zilliqa mainnet, which was launched in 2019. The token swap concluded in February 2020.

Zilliqa was the brainchild of Prateek Saxena, an award-winning research professor at the National University of Singapore, whose work has spawned browsers, web standards, and app stores. Along with a number of his students, Saxena published a paper in 2015 that explored how a sharding blockchain could improve network speed and efficiency. These ideas laid the foundation for what would become Zilliqa.

Around this time, Saxena partnered with Max Kantelia, a tech and finance entrepreneur with an engineering background, and Juzar Motiwalla, a venture capitalist with experience in tech startups, to found Anquan Capital. In 2017, Anquan incorporated Zilliqa Research, which created the Zilliqa network. Building on established links with the National University of Singapore, Zilliqa Research initially brought in Dong Xinshu as CEO, Amrit Kumar as chief scientific officer, and Yaoqi Jia as chief technology officer – all of whom were affiliated with the university’s School of Computing.

Anquan Capital and Zilliqa Research both hold significant ZIL reserves.

What Makes Zilliqa Unique?

The developers who made Zilliqa state that it’s the first public blockchain that relies entirely on a sharded network. Moreover, they assert that the high throughput and transaction rates Zilliqa can achieve put it in a position to rival traditional centralized payment methods such as VISA and Mastercard.

Due to its sharded structure and hybrid consensus mechanism, Zilliqa promises to become the blockchain of choice for developers in search of a solution for large-scale enterprises in financial services, gaming, advertising, and other sectors.

In addition to these features, Zilliqa is also written in a bespoke language, Scilla, that is designed to automatically improve the security of the whole network.

What Gives Zilliqa Value?

Zilliqa tokens (ZIL) can be used as a store of value, a means of exchange, and users can also reap rewards if they stake a portion of their holdings. Holders of Zilliqa who stake some of their holdings will also be able to participate in the governance of the Zilliqa ecosystem, with their voting power being in proportion to the amount of ZIL they stake.

The limited supply of the token also ensures that ZIL price won’t be depreciated by uncapped inflation, potentially making it a good store of value in the long term.

How Many Zilliqa Coins Are There in Circulation?

Of the total supply of ZIL, there are currently in circulation.

Before it was launched, Zilliqa generated 60% of the total supply and distributed some of these as follows: 10% were reserved for Anquan Capital, 12% for Zilliqa Research, and 5% for current and future members of the Zilliqa team. The remaining 40% of ZIL will be generated through mining.

According to projections by the Zilliqa blockchain development team, all of the tokens will have been mined within ten years of launch, with the mining rewards decreasing gradually over time.

Other Technical Data

In an effort to provide the Zilliqa network with greater access to real-world data, the development team has partnered with Chainlink, which will allow the integration of oracles. These oracles will enable smart contracts to import data from beyond the network, be they on other blockchains or phenomena in the real world.

The oracles provide a decentralized solution that has the added advantage of additional security. Since the data are provided by multiple nodes within the network, there is no central point that can be vulnerable to failure or attack.

The Zilliqa development team hopes that the integration of Chainlink will provide users with a new range of applications on the blockchain platform, such as decentralized exchanges, trading platforms, and other crypto-integrated financial services. While the primary purpose of Zilliqa’s dedicated Chainlink adapter is to access up-to-date market prices, it could also allow users to access a host of other datasets, such as exchange rates, election results, and weather forecasts.

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How is the Zilliqa Network Secured?

Zilliqa has a number of unique security features that combine to ensure the network is resistant to most kinds of threats. The first prong of Zilliqa’s approach to building a secure platform is its reliance on a practical Byzantine Fault Tolerant consensus mechanism, which has two layers of verification. The first of these combats Sybil attacks by ensuring that shards are only processing macro-blocks, rather than the whole blockchain. A second layer of the consensus mechanism then provides final verification and ensures that there cannot be hard forks in the network.

Additionally, the Zilliqa blockchain relies on elliptic-curve cryptography to secure its transaction records and also employs a Proof of Work algorithm to generate shards and designate node identities.

Finally, Zilliqa uses its own coding language, called Scilla, which ensures that any applications written using it are safe to run on the Zilliqa network by automatically detecting and eradicating security threats. This is done at the level of the language, making it easier to verify the security of smart contracts written in Scilla and ensuring that developers can trust them.

How to Use Zilliqa

Zilliqa is a public blockchain that anyone can use but the network is likely to appeal most to those who are developing high-volume smart contracts and dApps designed to take advantage of its high transaction speeds. Some of the applications of the blockchain include high-volume automated auctions, decentralized exchanges, high-performance scientific computing, and applications requiring highly accurate results.

ZIL is the token that is behind the Zilliqa blockchain and it can be used to execute smart contracts, as a reward for mining or staking, and as a means of exchange to cover transaction costs and so forth.

Some users might prefer simply to own, hold, or trade ZIL if they see it as a good investment opportunity for the short or long term.

Keen to take Zilliqa’s decentralization to the next level, the developers have made staking available with their Zilliqa coin, ZIL. In addition to direct rewards users who stake part of their ZIL holdings will also gain access to elements of network governance.

To this end, the development team has forged strategic partnerships with a number of exchanges and wallets to enable staking, known as Staked Seed Node Operators.

There is no maximum amount of ZIL a user can stake but the minimum amount of ZIL that can be staked is 10 ZIL.

How to Choose a Zilliqa Wallet

Although you can store Zilliqa in any cryptocurrency wallet you are familiar or comfortable with, a number of digital and online wallets are recommended by the Zilliqa team, including several dedicated ZIL wallets such as Zillet or ZillPay Wallet.

In terms of hardware wallets or cold wallets, Zilliqa is compatible with Ledger. These kinds of wallets provide the most secure option for storing cryptocurrencies with offline storage and backup. However, they can require more technical knowledge and are a more expensive option. As such, they may be better suited to more experienced users who need to store larger amounts of ZIL.

Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of ZIL or more novice users.

Online wallets or web wallets are also free and easy to use and accessible from multiple devices using a web browser. They are, however, considered hot wallets and can be less secure than hardware or software alternatives. As you are likely trusting the platform to manage your ZIL, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts of cryptocurrencies or for those making more frequent trades.

Kriptomat offers a secure storage solution, allowing you to both store and trade your ZIL tokens without hassle. Storing your ZIL with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling ZIL, or trading it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Zilliqa Proof of Work

Although Zilliqa does employ Proof of Work to establish node identities and carry out sharding, it does not use it to achieve consensus. This provides some advantages, key among which is that the high energy costs of Proof of Work do not apply to Zilliqa. Indeed, the developers claim that a Zilliqa node can run at one-tenth the cost of an Ethereum node.

Another advantage is that ZIL miners can reach consensus on multiple blocks with a single Proof of Work, which means Zilliqa provides a more stable payout with less variance.

The team developing Zilliqa further is looking into introducing a Proof of Stake scheme for their platform’s consensus protocol as an environmentally friendly alternative to Proof of Work.

Leading the Charge of Third-generation Crypto

Zilliqa is proving to be an exciting entrant to the crypto community, offering enviable transaction speeds on a scalable and secure platform that promises to be a boon for dApp and smart contract developers.

Advantages like these, combined with the Zilliqa team’s dedication to the continued development of strategic partnerships and network upgrades, result in Zilliqa having what appears to be a very bright future. If Zilliqa can reliably show that its scaling solution is workable, it has the potential to be head and shoulders above other cryptocurrencies. What is certain is that it is well worth keeping an eye on how this project progresses.

Zilliqa FAQ

How to Buy Zilliqa

Buying ZIL is as easy as visiting the Kriptomat how to buy Zilliqa page and choosing a method of payment. Kriptomat enables its users to buy ZIL with Mastercard or Visa, SEPA transfer, Skrill, Neteller, or Sofort.

How to Sell Zilliqa

If you already own ZIL and hold it in the Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Zilliqa Price

ZIL price is influenced by a lot of the traditional factors such as project news and development details, market sentiment, the flow of cryptocurrency on exchanges, and the economy in general. 

ZIL also has a capped max supply of tokens, which makes it a scarce asset that is potentially a good store of value in the long term. Additional demand for ZIL can be driven by staking, which yields annual returns of 6% or more, as well as giving stakers a say in Zilliqa ecosystem governance. These rewards could incentivize people to purchase more ZIL for staking and drive up the token’s price on crypto markets.

The current ZIL price is EUR.

The 24-hour trading volume of ZIL is EUR. ZIL is currently ranked of all cryptocurrencies by total market cap, with a market cap of EUR. It has a circulating supply of .

Register now to begin your journey into the world of Zilliqa and cryptocurrencies with with Kriptomat!

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