A beginner’s guide to buying, selling and trading Tezos (XTZ) in the United States.
Known as Tezzies, XTZ tokens are the native currency of the Tezos blockchain. However, as they can currently only be traded on a small number of exchanges, it’s important to know where to look if you want to get your hands on any XTZ.
If you’re looking to add some Tezos to your portfolio, keep reading for step-by-step instructions on how to buy XTZ.
Skip ahead: What do you want to know?
Quick guide: How to buy Tezos
- Buy BTC.
- Register for an account with an exchange like Gate.io.
- Enable two-factor authentication.
- Click “Wallets.”
- Find Bitcoin in the list of currencies and click “Deposit.”
- Copy the deposit address or scan the QR code.
- Deposit BTC into your Gate.io account.
- Select “BTC Markets” from the “Markets” drop-down menu.
- Click “XTZ.”
- Enter the amount of XTZ you want to buy.
- Click “Buy (BTC→XTZ).”
This is our quick guide to just one way of buying XTZ. Compare some other options in the table below.
Where to buy Tezos
A step-by-step guide to buying Tezos
Buying Tezos with fiat currency
For the purposes of this example, we’ll look at how to buy Tezos with US dollars on Kraken.
Buying Tezos with cryptocurrency
For the purposes of this example, we’ll look at how you can buy Tezos with Bitcoin.
How to sell Tezos
If you want to sell your Tezos tokens, you can do so by following a fairly similar process to that described above. The obvious difference is that you need to make sure to type in your transaction details under the “Sell XTZ” heading.
In addition, because Tezos is only listed in a limited range of trading pairs, you may not be able to make a direct exchange for the currency you want.
Which wallets can I use to hold Tezos?
Rather than storing your tokens on exchanges, which are regularly the target of hacking attempts, it’s widely recommended that you transfer any tokens you buy into a private wallet.
There is currently no official Tezos wallet. Unfortunately, there isn’t a great deal of choice when choosing a Tezos wallet either, though an increasing number of products are becoming available. Options you might like to consider include:
- Galleon Tezos Wallet (desktop wallet)
- TezBox Wallet (web and mobile wallet)
- Kukai Wallet (web wallet)
- tezos.blue (mobile wallet)
How Tezos works
Tezos is not only a platform for smart contracts and decentralized applications (dapps), it’s also the world’s first self-evolving blockchain.
In the short history of cryptocurrencies, there have been numerous examples of currencies being forced to fork their network into two different blockchains in order to upgrade. Perhaps the most notable example of this was the DAO hack that saw Ethereum and Ethereum Classic go their separate ways. Forks often divide the community behind a cryptocurrency and can cause significant network disruptions.
Tezos’ unique solution is a process that enables its protocol to be continuously upgraded through on-chain governance. The aim behind this is for the network to constantly evolve and upgrade over time, rather than undergoing radical changes that require a hard fork. All stakeholders can participate in governing the Tezos protocol by voting on proposed changes and upgrades.
Tezos also has its own smart contract programming language, Michelson, and uses a delegated proof-of-stake algorithm to achieve network consensus. Rather than staking, Tezos uses a process known as baking. Bakers are required to provide a security deposit to participate in the consensus process, and they validate all transactions and add them to the blockchain.
In July 2017, the Tezos team wrapped up a successful Initial Coin Offering (ICO) that raised US$232 million worth of Bitcoin and Ethereum, making it one of the world’s largest ever ICOs. It was a promising start for this ambitious blockchain platform, but since then Tezos has been mired in controversy.
The project is headed by husband-and-wife duo Arthur and Kathleen Breitman. In April 2018, the United States’ Financial Industry Regulatory Authority (FINRA) fined Arthur Breitman $20,000 and suspended him from associating with broker-dealers for up to two years after he allegedly began developing and pitching Tezos while still working for Morgan Stanley.
However, the project has also been rocked by a significant legal dispute between the Breitmans and Johann Gevers, the former president of the Swiss-based Tezos Foundation, and a series of lawsuits launched by ICO participants. One class action lawsuit that claims the company violated US securities laws during the ICO is still set to go ahead.
As a result of all this drama, the launch of the Tezos network was significantly delayed. ICO participants didn’t even get access to the tokens they had purchased for almost a year, and once tokens were distributed many holders decided to sell straight away.
Things to consider before you buy XTZ
Cryptocurrencies are complicated and volatile assets, and buying any digital coin or token comes with a high level of risk attached. With this in mind, it’s essential that you research and understand the many factors that can potentially impact the price movements of any cryptocurrency before you buy.
If you’re thinking of buying any XTZ, make sure you consider the following:
- Supply. According to CoinMarketCap, at the time of writing (October 2018) the circulating supply of XTZ was 607,489,041, out of a total supply of 763,306,930.
- Controversy. We’ve given you an abridged version of the scandals that have plagued Tezos above. Before buying any XTZ, make sure you thoroughly research the ins and outs of the lawsuits and apparent internal power struggles that have troubled Tezos and made headlines throughout the crypto world.
- Limited availability. Perhaps because those who participated in the Tezos ICO had to wait so long to receive their tokens, Tezzies can only be traded on a handful of exchanges.
- Use. Tezzies are the Tezos network’s store of value. They’re used to pay transaction fees and power smart contracts, and are also offered as baking rewards.
- White paper. If you want to take a detailed look at the technology behind Tezos and how the platform works, check out the project’s white paper. The Tezos position paper is also a useful document for understanding the motivation behind the creation of the platform.
Tezos is a controversial project but one that nonetheless has plenty of unique and interesting features. Make sure you consider all the factors listed above and any other risks before deciding whether or not you should buy XTZ.
Disclosure: At the time of writing the author holds ADA, ICX, IOTA, POWR and XLM.
Image source: Supplied, photographer: Tezos