What is Tezos? A Beginner's Guide to XTZ

Demi

•May 1, 2026

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Tezos is a scalable smart contract blockchain platform founded by Arthur and Kathleen Breitman. The network describes itself as a "blockchain designed to evolve", and it's capable of automatically upgrading without hard forks. The Tezos blockchain is governed on-chain by its users.

The Tezos ICO was one of the largest of all time, drawing in over 65,000 BTC and 361,000 ETH within 13 days (approximately $232 million at the time). Despite running into a lengthy legal battle shortly after launching, Tezos has carved out a growing niche in decentralised finance (DeFi), NFT minting and gaming. It has been the the official blockchain partner of Manchester United since 2022, with the club building Fantasy United, the Premier League's first Web3 fantasy football game, on the Tezos network.

Smart contracts on Tezos are built on Michelson, a programming language designed for formal verification - meaning contracts can be mathematically proven to behave as intended before deployment. This makes Tezos particularly well-suited to high-value financial applications where security and precision are non-negotiable.

What makes Tezos unique?

Tezos is a user-governed decentralised platform whereby anybody who owns XTZ can vote on future changes within the network. The platform is capable of self-amendment, meaning once a consensus is reached, the software automatically updates the rules across all network nodes. This structure eliminates the possibility of hard forks, giving users and developers a frictionless experience.

Tezos completed its 20th on-chain upgrade with the Tallinn activation in January 2026, reducing block times to 6 seconds and slashing app storage costs by up to 100 times. Looking ahead, Tezos X, a major upgrade targeting summer 2026, aims to achieve transaction confirmations in approximately 50ms - a significant step forward for the network's competitiveness.

What is Tez (XTZ)?

Tez is the native digital currency of Tezos, used to operate and maintain the network. It can be spent, sold or traded like any other digital currency. XTZ is an inflationary asset with an uncapped token supply. The all-time high of XTZ was $9.12, reached in October 2021. It currently trades around $0.36, ranked just outside the top 100 cryptocurrencies by market cap.

What is 'baking'?

Tezos uses a variation of proof-of-stake known as liquid proof-of-stake (LPoS), which enables holders to loan their validation rights to other users without giving up ownership of their tokens. 'Baking' is the Tezos expression for staking. When a baker stakes a minimum of 6,000 XTZ, they are permitted to operate a network node and earn a share of XTZ. Users can stake smaller sums through delegation, enabling them to participate in on-chain governance and earn validation rewards without meeting the full threshold. Any changes voted upon by bakers undergo a multi-step procedure before implementation.

Advantages of Tezos

Tezos upgrades itself automatically without hard forks, giving users and developers a genuinely frictionless experience. It's also one of the most energy efficient blockchains, with a notably low carbon footprint. Staking on Tezos is flexible too - delegation means you don't need to meet the full baker threshold to earn rewards - and low fees make it a strong option for NFT minting and DeFi.

Disadvantages of Tezos

XTZ is an inflationary asset, so it may not compete well with deflationary currencies like Bitcoin in the long run. Despite a strong technical foundation and high-profile partnerships, mainstream adoption has been slower than competing blockchains, and the price remains well below its 2021 peak.

Where can I buy XTZ?

XTZ is available on most major exchanges including Binance, Coinbase, OKX, Kraken and Bybit. To buy XTZ, create an account on one of the listed exchanges, verify your identity and deposit your local currency. You'll need a wallet that supports XTZ. For larger sums, a non-custodial wallet like Kukai or Temple, or a cold wallet like Ledger, is recommended.

Our top 3 Tezos wallets are: