Will Qtum (QTUM) make money from Decentralization?

They intend Qtum (QTUM) to be a more flexible and decentralized blockchain.

For example, they claim Qtum’s community can adjust the block size, gas prices, and other important blockchain features. They claim Qtum can theoretically process millions or billions of transactions per second by combining layer-one and layer-two blockchain solutions.

To explain, a layer-one is a basic blockchain like Bitcoin (BTC) or Ethereum (ETH). A layer-two is an additional chain they add to blockchain to support a task, such as processing payments.

What is Qtum (QTUM)?

They claim Qtum can achieve those speeds because it can operate on thousands of low-powered devices all over the world using proof-of-stake (PoS). Proof-of-Stake (PoS) is a cryptocurrency consensus mechanism. Many PoS systems allow token holders to govern the system through voting.

Qtum itself is a PoS-based Decentralized Governance Protocol that can enable the Ethereum Virtual Machine (EVM). The EVM is the digital computer that operates Ethereum. They claim Qtum is decentralized, trustless, permissionless, and open sourced.

PoS requires validators to hold and stake tokens for a cut of transaction fees. To explain, PoS systems allow large numbers of people to participate in a blockchain by paying them transaction fees to perform tasks such as approving or processing transactions, adding blocks, and storing data.

Theoretically, this could create a cheaper, faster, and bigger blockchain.

Can QTUM (QTUM) solve the Blockchain Scalability Problem?

I’m not sure if there is a demand for a blockchain that can process billions of transactions-per-second (TPS). However, Qtum’s builders think there is.

Ethereum is the most popular blockchain, yet it was processing 29.33 TPS on 28 May 2023. This means an Ethereum payments solution can only process 29 payments at once. Hence, the payments solution could turn customers away if over 29 people try to pay for something.

They claim Qtum can process 1,100 TPS. Hence, Qtum could solve the blockchain scalability problems. This refers to the inability of blockchains, such as Ethereum, to process large numbers of transactions.

Hence, Qtum could serve thousands or tens of thousands of customers at once. Thus, a Qtum solution could serve a mass market. For example, Visa’s (V) payments platform processes around 1,700 TPS. Although Visa claims its servers can process up to 56,000 TPS, Bitcoin.com reports.

The Problem with Qtum (QTUM)

I think proof-of-stake could be a weakness that destroys Qtum (QTUM). Recent news shows hackers can takeover PoS systems and manipulate them.

Hackers took over Tornado Cash’s decentralized autonomous organization (DAO) in May 2023. A DAO is the entity that governs a decentralized blockchain protocol. Token holders govern the DAO by voting.

Hackers used vote fraud to seize control of Tornado Cash’s cryptocurrency mixer. To elaborate, the hackers created fake PoS to vote. They used the fake votes to make decisions. For example, hackers voted to mint over $1 million Tornado Cash (TORN) worth around $4.25 million and pay it to themselves.

I think hackers could use the same tactics to takeover Qtum and steal QTUM. The Tornado Cash proves no DAO is secure. Hackers can seize DAOs and corrupt them.

Hence, DAO’s have the same weakness as democratic governments. Criminals can take them over through vote fraud. Consequently, I think it is only a matter of time before cyber criminals takeover many DAOs.

Qtum (QTUM) features

Qtum (QUTM) is an independent blockchain that has several interesting features. First, Qtum supports cryptocurrency industry token standards, such as Ethereum’s ERC20, nonfungible token (NFT) standards, and Binance’s BEP-20. Hence, Qtum can support most tokens.

They claim Qtum allows users to send and receive fungible tokens and NFTS without paying huge gas fees. To explain, gas fees are the charges you pay when communicate with the digital computer that operates a blockchain. Gas fees can be expensive. The typical Ethereum gas fee was $2.83 on 28 May 2023.

A key Qtum feature is Janus. Janus is a web3 proxy adapter that can serve as a web3 provider. Essentially, Janus connects Qtum to web3.

They offer two Qtum wallets. The Qtum Core wallet is a desktop wallet that works with Mac, Windows 64, and Linux. The Qtum Electrum Wallet is a light wallet that supports the Trezor and Ledger hardware wallets.

However, they offer no examples of decentralized finance (DeFi) and other products that use Qtum (QTUM).

What Value Does Qtum (QTUM) offer?

They claim the Qtum network supported 1,363 total unique staking addresses, 226 total unique delegated addresses, and 23 unique super stakers in April 2023. Qtum awarded 40,496 QTUM in staking fees in April 2023. The Qtum ecosystem comprised over 500 nodes distributed across over 60 countries on six continents.

Mr. Market has some interest in Qtum (QTUM). CoinMarketCap named Qtum (QTUM) the 20th most trending cryptocurrency on 28 May 2023. In contrast, QTUM was the 110th ranked cryptocurrency with a $2.72 Coin Price on 30 May 2023.

CoinMarketCap gave Qtum a $285.208 million Market Capitalization, a $292.054 million Fully Diluted Market Cap, and a 24-Hour $23.444 million 24-Hour Market and Centralized Exchange (CEX) Volume on 28 May 2023. They base those numbers on 104.675 million QTUM Circulating Supply and a 107.822 million QTUM Total Supply.

There Could be No Market for Qtum

I think there could be no market for Qtum (QTUM)  because I’m not sure if there is a demand for its solution. The solution being a super-fast PoS-based Decentralized Governance Protocol. To explain, I don’t think there will be a demand for such a protocol under cryptocurrency reaches a mass market.

However, I don’t think cryptocurrency will reach a mass market for another decade or longer. Hence, I predict cryptocurrency will not reach the mass market until around 2035. Thus, there will be no large demand for a decentralized governance protocol like Qtum until then.

Although, the Central Bank Digital Currency (CBDC) experiments in countries like China could lead to a popular demand for cryptocurrency in some nations. News reports claim CBDC adoption rates are low but growing.

Qtum (QTUM) could be a product ahead of its time. Qtum is a product for which there is no need. I recommend speculators avoid Qtum (QTUM) because it is a product in search of a market. Until the market exists, Qtum will have little value.