What is Qtum (QTUM)? A Bitcoin-Ethereum Hybrid Serving as a Decentralized Apps Platform

Creation of Qtum

Qtum, founded by Patrick Dai in March 2016, is a blockchain project based in Singapore. It successfully conducted an Initial Coin Offering (ICO) in March 2017, raising $15.6 million in just 117 hours. The mainnet for Qtum was launched on September 13, 2017, requiring users to swap their ERC20 tokens for the new Qtum Ignition Tokens on the dedicated Qtum blockchain.

Value Proposition of Qtum

Qtum’s vision stems from the idea of merging existing technologies to create innovative solutions. The initiative aims to enhance current blockchain technology, enabling the Virtual Machine to operate across the entire ecosystem.

By combining the strengths of Bitcoin and Ethereum, Qtum is designed as a hybrid platform for decentralized applications tailored to industry needs. Its primary objective is to connect the blockchain environment with real-world applications. By August 2018, over 50 decentralized applications were developed using the Qtum platform.

One of Qtum’s competitive advantages lies in its team, which comprises more than 150 developers and over 2.5 million coin holders contributing to its growth.

Understanding Unspent Transaction Output (UTXO)

Qtum serves as a bridge between Bitcoin and Ethereum, utilizing the Bitcoin Unspent Transaction Output (UTXO) model as its foundational infrastructure. This design ensures compatibility with Bitcoin’s processes, allowing Qtum to capitalize on updates to the Bitcoin network, such as the Lightning Network.

To illustrate the workings of the UTXO model, let’s consider a simple example. Imagine John possesses 5 BTC and wishes to send 2 BTC to Anna. In this transaction, his wallet generates four outputs. The first output of 2 BTC is directed to Anna, while the remaining three outputs consist of 1.5 BTC, 0.5 BTC, and 1 BTC, which are unspent transaction outputs.

These unspent outputs return to John’s wallet and are classified as unspent inputs, resulting in a change of 3 BTC across three different inputs. Similar to having $3 in various denominations, these amounts cannot be consolidated into a single unit.

Now, if John decides to send 2 BTC to Maria three days later, his wallet will again create outputs based on the three unspent inputs.

In this case, the unspent inputs of 1.5 BTC and 0.5 BTC will be converted into spent outputs for Maria’s wallet, while the remaining unspent input of 1 BTC will return to John’s wallet as an unspent output, ready for future transactions.

This exemplifies how the UTXO model functions, showcasing its key advantages…