Buying Tezos – Tips and Tricks for XTZ Trading
Since Tezos and its native token XTZ came onto the market in 2018, the cryptocurrency has experienced enormous hype with many ups and downs. But XTZ is not only a blockchain-based cryptocurrency. It is also a platform for decentralised applications. Additionally, it allows stakeholders to have a significant influence on its technical development thanks to democratised processes.
How and where you too can buy Tezos to profit from the XTZ exchange rate, which wallet you need for it and what other advantages Tezos has to offer, you will learn in this token review. Throughout this guide, we give you the best tips and answer the most important questions.
Tezos: What is it?
Tezos is a blockchain-based network used to create and host applications and assets. As the network uses a proof-of-stake protocol, the in-house XTZ tokens cannot be mined – all tokens are already created.
The stakeholders’ tasks are to manage upgrades to the primary protocol and changes to the management process. For this, they are rewarded with tokens by the open-source platform. In its ICO in 2018, Tezos was able to raise 232 million US dollars.
Buying Tezos (XTZ) – The most important aspects at a glance
-> Tezos is, first and foremost, a blockchain network. The XTZ tokens are intended to support the projects and processes. But investors can also support the network by buying the token XTZ.
-> Since Tezos’ smart contracts are considered exceptionally secure, the still comparatively young cryptocurrency is especially popular from the point of view of its security.
-> Important: Since the price of cryptocurrencies can fluctuate enormously, they are more suitable for experienced investors or day traders familiar with the opportunities and risks of crypto trading. As always, we highly recommend doing your due diligence and only investing funds that you are comfortable with losing potentially.
How does Tezos work?
Important development or design decisions in blockchains like Ethereum are primarily in the hands of miners and core development teams. This has led to extreme centralisation and a lack of flexibility.
Tezos aims to solve this problem by making big decisions collectively. So the decision-making process is a central building block of the Tezos community. Based on strict governance rules, stakeholders can, for example, both approve and reject changes or upgrades. So if a developer wants to make a specific change, he can propose a protocol upgrade for it, which the stakeholders then enforce or reject.
Tezos thus wants to create an incentive for stakeholders to participate in the development and upgrade process directly and to actively and democratically shape it.
Tezos as a cryptocurrency asset
First and foremost, investors should keep in mind that Tezos is primarily a blockchain like Ethereum, Solana or ChainLink that aims to operate applications and smart contracts for ever-changing protocols. In this context, the XTZ tokens support the blockchain projects and are not necessarily intended as a currency.
Moreover, XTZ tokens are a comparatively young cryptocurrency that is still in an early stage of development. Therefore, primarily only project supporters buy the tokens to show their support. In this context, however, new developments and upgrades to the blockchain can drive speculation for XTZ as an exchange-traded asset.
Buying XTZ – Broker or crypto exchange?
Does Tezos convince you, or would you like to speculate on the XTZ price? Like most other cryptocurrencies, you can buy XTZ via a cryptocurrency exchange or trading platform. If you do not want to buy and hold real tokens, your best choice would be to speculate on the short-term price development via an XTZ contract-for-difference (CFD) with an online Forex broker.
If you want to buy actual Tezos tokens and, for example, to stake them and earn interest on them, you will need to utilise a crypto exchange or trading platform.
To buy the XTZ token, you first need an account with a crypto broker or cryptocurrency exchange. With some CFD brokers, you can buy the cryptocurrency as real tokens or participate in the XTZ price via a Tezos CFD.
Once you have chosen a broker or crypto exchange, you need to set up your account there. Register on the website of the respective provider with your email address as well as a strong password. You are registered after you have accepted the terms and conditions for data processing and the general terms and conditions. In the course of registration, you may also have to verify specific personal data. This varies slightly from platform to platform but typically consists of basic KYC requirements.
Depending on the exchange or platform, you can swap another cryptocurrency for XTZ or buy the token directly with fiat money (cash) via bank transfer or credit card.
Tezos mining, buying and staking
Tezos’ proof-of-stake protocol prevents XTZ tokens from being mined. So the only way to own XTZ tokens is to buy them. Investors thus prove their participation in the project.
Once you have acquired XTZ tokens, you can either hold them in your personal wallet until you sell them or earn interest by staking them.
We found that one of the best options to earn interest on your XTZ holdings is the Atomic wallet. Here, you can currently stake XTZ for a 7% APR.
Security
As a decentralised blockchain, Tezos offers most of the conventional advantages as other blockchains and harbours many a unique feature, such as its proof-of-stake protocol or strict governance rules. By far, the most popular feature, however, is the security that Tezos offers.
Since Tezos uses a decentralised blockchain network, there is also no central database that could be hacked. This means that changes cannot easily be made or information destroyed. The democratisation of the development processes also contributes to security. Thus, no changes can be made without the consensus of all participants. For example, there is also no central authority that could exercise absolute control over Tezos. Furthermore, Tezos secures and protects its users’ information by using cryptographic encryption.