The Bitcoin network, in Qtum’s view, is an answer to the question of how to transfer assets in a peer-to-peer model over the internet without involving third parties. The Qtum blockchain aims to iterate on Bitcoin and similar protocols, improving on (purported) limitations like a poor capacity to comply with AML and KYC regulations, inflexible and disparate consensus mechanisms, incompatible technology amongst blockchains, and a lack of smart contracts capable of interacting with real-world data. In general, Qtum positions itself as an alternative to Bitcoin and Ethereum that excels comparatively in the areas of technology, governance, and functionality for business-centered dApps. Qtum’s founder, Patrick Dai, served previously as CTO at VeChain and the BitSE Group. The blockchain launched via a token sale in March 2017, raising approximately $10 million.
Qtum is a PoS, smart-contract compatible blockchain that can natively run both Bitcoin-based and Ethereum-based applications. Specifically, Qtum uses Blackcoin’s PoS model and possesses a layer that abstracts the UTXO data into something the Ethereum Virtual Machine (EVM) and other virtual machines (VM), including Qtum’s x86 VM can read, allowing it to interact with both Bitcoin-based and Ethereum-based applications, in turn supporting a broader variety of dApps. The protocol uses Bitcoin’s UTXO model of storing transactions, while also supporting oracles and two types of smart contracts. One type of supported contract, ‘master contracts’, is designed such that trusted data entities, like official institutions or organizations, can provide off-chain data that master contracts can access, allowing the contract to execute based on either off-chain or on-chain factors. Qtum also uses many features of the Bitcoin blockchain, particularly its UTXO approach, for storing transactions, which makes individual coins traceable. Much like Bitcoin, Qtum is also compatible with the Lightning Network, a second-layer instant payment network, and supports the c-lighting, scala and Go implementations of said protocol.
Qtum also features a distinctive governance structure, a hybrid of recognizable corporate governance, management models for open-source software, and blockchain-based consensus. Four subcommittees (Application, Code Review, Finance & Human resources, and Marketing & Public Relations) are overseen by one master committee (Judgment), which is responsible for appointing or dismissing an executive director and the subcommittee heads. These subcommittees are, respectively, responsible for selecting industries to implement the Qtum blockchain in, managing the development of underlying technology, managing finances and personnel, and publicly promoting the project. While the Judgment committee will initially be filled with Qtum chosen appointees, after this initial period, the coin-holding community will be responsible for electing 50 representatives, 9 of whom will become elected to the Judgment committee.
The Qtum token, QTUM, has several network functions: the token is used to pay fees, determine the distribution of newly minted tokens through a PoS mechanism, and confers holders voting rights in Qtum’s governance organization. Fees, payable in QTUM, are charged for executing smart contracts, on a model comparable to Ethereum’s gas. Users with the equipment and technological know-how can also participate in consensus as a validator by staking tokens to set up a mining node, receiving newly minted tokens as compensation for such work. The distribution of mining rewards depends on the size and age of the user’s stake. Token holders can elect representatives to Qtum’s governance, with voting power being a function of both the quantity and the age of held tokens.