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The world’s leading cryptocurrency, Bitcoin (BTC), remains a popular choice among crypto users, in part due to the very secure nature of fund transfers and storage on the network. In turn, Ethereum (ETH) retains its large lead in the market as the biggest smart contract blockchain. In 2017, a new blockchain project, Qtum (QTUM), launched its mainnet with the promise of combining the best features of the two leading cryptos. In this article, we provide all the details on this intriguing and novel project.
Qtum (pronounced “quantum”) is a hybrid blockchain founded in 2016 to address two key limitations of Bitcoin and Ethereum, the leading blockchains. In the case of Bitcoin, the limitation was the chain’s inability to support smart contracts and decentralized apps (DApps). In the case of Ethereum, the limitation was related to the way address balances are recorded on the chain. Ethereum uses a balance-tracking model called the account model.
The account model is different from the balance-tracking method, the UTXO (Unspent Transaction Output) model, which is used on Bitcoin and several other leading blockchains. While Ethereum’s account model is purported to be easier to conceptualize than the UTXO model, there are concerns about its security and scalability. In essence, Bitcoin’s UTXO model of recording and keeping track of address balances is widely believed to be more secure and scalable than Ethereum’s account model.
Qtum offered a solution that was based on the UTXO balance model while also having smart-contract functionality. It did so by devising a multilayer system that eloquently combined the advantages of UTXO and smart contracts.