This guide details the simple steps to purchase Tezos (XTZ) in different ways. However, before that, you will learn what tezos is as a decentralized blockchain network and how you can use Tezos (XTZ), the coin owner can vote on the proposal.
Want more than just to buy XTZ? Access dozens of different cryptocurrencies buying guides 2022 here.
What is Tezos (XTZ)?
Tezos is a lot like Ethereum. It is a platform to create smart contracts and Dapps that are censorship-free.
What’s different? It runs on Proof-of-Stake. This means there is no crypto mining involved, which is better for the environment.
It also features a governance model to ensure that people who own the coin have a say in decisions regarding the future of Tezos.
Tezos (XTZ) is a fourth-generation blockchain network that incorporates advanced protocols to enable a host of functionalities. Primarily, the platform supports the development of decentralized applications (DApps) and the coding of smart contracts.
Tezos is an open-source decentralized network for assets and applications. Today, the Tezos community consists of researchers, developers, validators, and various support groups. All of these parties share the common goal to expand the Tezos ecosystem.
Tezos is a Proof of Stake (POS) coin. On the Tezos network, staking is actually referred to as “baking” (confirming transactions yourself – technical knowledge required) or “delegating” (getting someone else to confirm transactions for you – no technical knowledge required).
That’s important to know but for the purposes of this article, we’ll just use the word “staking” to refer to “delegating”, as staking is the term used for most POS cryptocurrencies.
Arguably, Tezos was the first major coin to popularize staking. Some other coins have had a staking reward before Tezos, but XTZ was really the first coin to attract investors with its promise of a return.
As of publication, it’s possible to earn a 5.61% annual return on staked Tezos (you can check the current Tezos staking award here).
Historically, the Tezos staking award has been higher, around 7 to 8%, and it may go higher again if a meaningful number of stakers drop off the network, which allows the smaller pool of stakers to each earn more XTZ.
Read More: What is Tezos (XTZ)?
How Does Tezos (XTZ) Work?
Tezos has quite a unique architecture that uses something called Network Shell. It’s an agnostic native middleware that has enabled the development team to create a modular style of blockchain network that can change, upgrade and amend itself by following a particular set of rules. Generally, blockchain has three layers – network layer which allows communication between nodes and peers, transaction layer that specifies the transaction verification protocol, and consensus layer, which is again self-explanatory.
What it has done is combined the consensus and transaction protocols to make a single layer called the blockchain layer. Network Shell allows seamless communication between blockchain and network layers while the network layer remains agnostic to the other two layers. This communication between layers enables stakeholders to govern the blockchain network upgrades and changes in a democratic manner.
The on-chain governance and self-amendment enabled by the unique architecture of the blockchain network allows Tezos to upgrade and make changes without undergoing a hard fork. Every proposed amendment is voted upon to decide if it’s approved by the majority of stakeholders or not. The voting process itself can be amended when required. In the long term, this process allows the blockchain to maintain its core values while making the necessary upgrades without creating splinter blockchains that fragment the support and resources.
While Tezos offers similar features to other cryptocurrencies, its system of operations is much different. Tezos’ blockchain can be split into two distinct parts:
Network shell: the part of the code that handles transactions, administrative operations, and amends itself based on how users vote.
Network protocol: the part of the code that sends proposals to the shell for review.
Tezos uses a variation of the classic proof-of-stake (PoS) consensus mechanism called liquid proof-of-stake (LPoS). This mechanism works by its users staking, or in Tezos’ case, “baking” XTZ. To become a baker, a single node is required to bake 8,000 XTZ tokens.
Bakers play a major role in the governance of the blockchain by voting on code changes proposed by developers. The voting process lasts for 4×23 days.
How to Make Money with Tezos (XTZ)?
How to Earn Free Tezos (XTZ)?
Why Buy Tezos (XTZ)?
To an investor, the XTZ cryptocurrency has several uses that make it valuable. These include:
- Currency – XTZ tokens can be used as a payment method for goods and services or digital currency;
- Staking – there are a couple of levels on which a Tezos investor can participate in regards to staking: either as an active or passive validator. An active validator will stake their tokens to verifying transactions, while a passive contributor will delegate their tokens to an active validator and get a share of the rewards from block generation and transaction verification;
- Governance – only XTZ token holders are permitted to participate in the governance of the Tezos network allowing them to make improvement proposals, vote, and promote them to ensure their adoption;
- Speculation – due to cryptocurrency’s volatility, the market presents a huge profit opportunity for speculators seeking to profit off the price movement. Tezos has seen immense price appreciation since its 2017 ICO, but given that the whole market is growing, there could be room for further growth, which is appealing to both long and short-term investors.
How to Buy Tezos (XTZ) in 4 Simple Steps
- Step 1: Decide where to buy Tezos (XTZ).
- Step 2: Think about how to store your Tezos (XTZ).
- Step 3: Make your purchase.
- Step 4: Manage your investment.
How to Buy Tezos (XTZ) on a Crypto Exchange
- Step 1. Create a Coinbase account
Download the Coinbase app and start the sign up process. You will need a valid ID and may be asked for proof of address in order to transact, so be sure to have those ready. Verifying your ID may take longer than a few minutes, depending on where you live.
- Step 2. Add a payment method
Tap on the payment method box and connect a payment method. You can use a bank account, debit card or initiate a wire.
- Step 3. Start a trade
Press button then select “Buy” from the list of options.
- Step 4. Select Tezos (XTZ) from the list of assets
Search for Tezos (XTZ) by typing “Tezos (XTZ)” into the search bar. When you see Tezos (XTZ) show up in the results, tap it to open up the purchase screen.
- Step 5. Enter the amount you want to buy
Use the number pad to input the amount you want to spend in your local currency. The app will automatically convert that into a Tezos (XTZ) amount.
- Step 6. Finalize your purchase
Tap “Preview buy” when ready. You’ll be shown the details of your purchase. Make sure everything looks good and then confirm your purchase. That’s it, you’ve bought Tezos (XTZ).
- Step 1: Find a crypto exchange or trading platform that offers Tezos (XTZ)
There are a number of exchanges that will let you trade your funds for Tezos (XTZ). One of them is the eToro trading platform.
- Step 2: Sign up
If you’d like to buy Tezos (XTZ) through eToro, all you need to do is sign up, verify your account and make a deposit. From there, you’ll be able to buy and sell Tezos (XTZ) easily.
- Step 3: Buy Tezos (XTZ)
Tezos (XTZ) can be purchased fractionally, so you don’t need to buy a full Tezos (XTZ) to own some. For example, if Tezos (XTZ)’s price is $10,000, you can purchase 0.1 Tezos (XTZ) for $1,000.
- Step 1. Log in to your account or sign up to Bitfinex.
- Step 2. Go to Deposit, choose Payment Cards.
- Step 3. Select the payment processors.
- Step 4. Choose the crypto and enter the amount.
- Step 5. Select the destination wallet and proceed payment
- Step 1: Create your Binance Account
Sign up with your email address or mobile phone number, and choose a strong password. Or, download the Binance crypto trading app from the App Store or Google Play store and open an account there.
- Step 2: Start Buying Tezos (XTZ)
There are two main ways to buy Tezos (XTZ) on Binance using cash: you can link your debit/credit card or bank account, or buy crypto directly from other users on Binance P2P.
Linking your debit card, credit card, or bank account (available in many regions) is one of the easiest ways to buy Tezos (XTZ). Through this method, you can buy Tezos (XTZ) for a minimum. (This amount varies depending on the currency you use.)
Buy Tezos (XTZ) directly from other Binance users with your local fiat currency via Binance P2P. Browse a variety of Tezos (XTZ) listings to shop the best offers on Tezos (XTZ) from other users. With thousands of merchants and hundreds of payment methods available, Binance P2P caters to many regions in the world right now.
- Step 1. Sign Up for KuCoin Account
- Step 2. Secure Your KuCoin Account
- Step 3. Verify Your Identity
- Step 4. Connect Your Account to Funds Fund Your Account
- Step 5. Start Trading on KuCoin
How to Buy Tezos (XTZ) With PayPal
- Step 1. Login to Paypal and Select Cryptocurrency
In Paypal website, you should see the option for cryptocurrency in the top right of the dashboard, next to ‘Send’ and ‘Request’.
- Step 2. Select ‘Tezos (XTZ)’
Or choose any of the other coins listed.
- Step 3. Select ‘Buy’
- Step 4. Choose How Much You Want to Buy
Enter an amount of dollars you want to spend on Tezos (XTZ) or choose a pre-set amount below.
- Step 5. Select Payment Method
You likely already have you bank account linked to you Paypal account, but you can also hook up another method if you don’t want to use your bank account.
- Step 6. Hit the ‘Buy’ button
After finalizing your purchase, you will be taken to a confirmation screen and you should see your coins reflected in your Paypal account dashboard.
How to Buy Tezos (XTZ) With a Credit Card
Not all platforms will allow you to use a credit card to make your cryptocurrency purchases. If you do choose a platform allowing such transactions, keep in mind that there may be extra fees associated with the purchase. Many credit card companies process cryptocurrency purchases via credit card as cash advances, which can incur high interest rates, among other fees.
Some credit card companies allowing cardholders to make crypto purchases treat the purchases as a cash advance (cash advances usually involve a cardholder using a credit card to withdraw money from an ATM). This has several critical disadvantages.
- Cash Advance Fees: Some cards treat a cryptocurrency purchase as a cash advance. This means each crypto purchase is subject to a cash advance fee. A typical fee of either $10 or 5% (whichever is greater) would be charged. These fees are in addition to fees charged by the vendor or exchange.
- Cash Advance Interest Rates: Most cards have a higher Annual Percentage Rate (APR) for cash advances—often over 25%. This is a variable interest that changes with the market. Interest will start to accrue on the day the purchase is made and will continue to accrue until the credit is paid off. By comparison, cardholders have up to 25 days to pay off a regular credit card charge before accruing any interest.
- No Credit Toward Rewards orBonuses: Credit used to purchase crypto (and thus make a cash advance) typically doesn’t qualify for any purchase rewards nor toward spending that would normally apply to a welcome bonus.
- Lower Credit Limits: Cash advances often have a lower credit limit than the cardholder’s overall credit limit that applies to the card itself. Cardholders hoping to make big crypto buys may find themselves limited by the cash advance terms and limitations.
Read More: How to Sell Tezos (XTZ)?
Buying Tezos (XTZ) FAQs
What is a Tezos (XTZ) Wallet?
The type of Tezos (XTZ) wallet you choose will likely depend on what you want to use it for and how much you need to store.
Hardware wallets or cold wallets provide the most secure option with offline storage and backup. Both Ledger and Trezor hardware wallets offer storage and staking solutions for XTZ. Hardware wallets can involve a bit more of a learning curve and are a more expensive option, however. As such, they may be better suited to storing larger amounts of XTZ for more experienced users.
Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of XTZ or more novice users.
Can You Sell Tezos (XTZ)?
In our day and age, new cryptocurrencies appear quite often. Some of them, like Tezos, come about on top of their own blockchain network. And, for people who are not very familiar with the specifics of the crypto industry, dealing with every respective network might seem quite a difficult job to do. Understanding all ins and outs of the new decentralized platform with its own consensus algorithm, set of programming languages (or even one custom language), deployment and validation rounds sounds really tough. Not to mention even the presumably easy process of buying or selling their own cryptocurrency.
Read More: How to Sell Tezos (XTZ)?
What is a Tezos (XTZ) Address?
The Tezos Wallet is where XTZ FA1.2 FA2 standard tokens are stored in the Tezos blockchain. You can send and receive XTZ FA1.2 FA2 standard tokens as well as interact with applications on the Tezos platform.
In particular, this wallet is owned by you, so no XTZ FA1.2 FA2 has the right to influence or use the wallet other than you.
Tezos Wallet has 3 extremely important pieces of information you must note:
- Wallet address: A sequence of numbers and characters used to send assets to the Tezos wallet. Others can transfer coins to you through the wallet address you provide. A Tezos (XTZ FA1.2 FA2) wallet address will have the format starting with “tz…”: tz1NqA15BLrMFZNsGWBwrq8XkcXfGyCpapU1.
- Passphrase: A security key that can be understood as a password consisting of any 12 English keywords. If you want to perform the wallet recovery operation, you must go through the Passphrase login step. Format of a Passphrase: strike dragon jar random tuna claw multiply ring member blue roast picture.
- Private Key: This is a string format to connect to the account, quite similar to the password of a bank account. Format of a Private Key: edskS9dHE8B3bFbTovFaJLfAzJEoLhWQ5uaQgPozEH8P4rEPbKwLrQyxZfkvuxH9rChfKHh9U3BLHTYHYMd4j2MrXF72xqx8Nx
To make it easier to visualize, you can imagine that the Tezos Wallet is a bank account, the wallet address is the account number and the passphrase/private key is the password.
The difference here is that with a bank account, other people will know your personal information. As for the Tezos Wallet, the user becomes anonymous, no one knows who owns the wallet, and transactions only occur through the address encoded into a sequence of numbers and characters.
How to Accept Tezos (XTZ) Payments?
Tezos payment enables companies and individuals to accept XTZ as payment or donations. Tezos is a peer-to-peer distributed network that aims to stimulate the introduction of blockchain technology by improving the structure and eliminating the main disadvantages of similar projects.
Tezos is an extremely promising project that seeks to make a breakthrough in the world of cryptocurrencies and stimulate the widespread introduction of blockchain. The developers have focused on the security of Tezos by implementing the Michelson programming language and providing the project with the ability to update without hard forks. In addition, thanks to the PoS consensus algorithm, transactions in the Tezos network are not only secure, but also fast.
- First, you need to sign up for a NOWPayments account. The process shouldn’t take more than a minute!
- Go to Store settings. Add your Tezos wallet and create a new API key.
- Choose the tool to add to your checkout.
- The integration will be active on your website, and you’re ready to accept payments in Tezos!