Zilliqa Coin: How It’s Using Sharding to Build Blockchain
These days, it can feel like every cryptocurrency under the sun is trying to claim it’s the “biggest Ethereum competitor,” so it’s only natural to feel skeptical. But when it comes to Zilliqa, the protocol might just stand a chance at achieving that goal thanks to its use of pioneering techniques—even Ethereum seems to be taken note. Is Zilliqa coin one to watch?
If you’re familiar with the crypto world, you no doubt know a thing or two about the scalability problem that protocols like Ethereum face. Many blockchains are unable to handle the vast amounts of data they need to process from high numbers of transactions—and competitors are scrambling to find solutions. Zilliqa is among them, making Zilliqa coin (ZIL) a promising prospect.
If you’re curious about the rise of Zilliqa and its use of sharding to break up networks and make them more efficient, you’re in the right place. We’ll run through ZIL’s price history, what it’s used for, and the underlying technology behind the Zilliqa network.
Zilliqa coin review
Zilliqa coin was initially born from a thesis project by a National University of Singapore student. The thesis turned into a white paper in 2016, and that became the Zilliqa project, which launched in 2017.
As we hinted in our intro, Zilliqa coin was primarily launched with the aim of solving the scalability problems plaguing the future of the blockchain, and we’ll dive into that shortly. But the first thing you might want to know is whether Zilliqa is the next cryptocurrency to explode in 2022, so let’s start by examining its price history.
Zilliqa coin price history
ZIL coin launched in January 2018 at a price of $0.12, and after a brief dip, it enjoyed a spike up to $0.2 in May 2018.
But if you’re at all familiar with crypto investment markets, it probably won’t surprise you to know that this was only a temporary rise, and the value hovered below the $0.03 for the next few years (sometimes significantly below).
Just as its investors were losing all hope, ZIL finally benefitted from the boom in the crypto market at the start of 2021. Its value underwent multiple increases, until it finally reached an all-time high of $0.24 in May 2021.
Admittedly, the increase from its former peak to the next high wasn’t quite as drastic as the rise many other cryptocurrencies experienced during this period, but it at least proved that some independent investors remained interested in the coin.
ZIL then went down with the crash, and its value tanked to $0.05 in July 2021. But since then, it showed some healthy increases again, and the price still remains above its pre-2020 point. Is there a promising future for ZIL?
If you think so, you’ll be pleased to know that ZIL crypto is available from most major exchanges, including Binance, KuCoin, and Gate.io. However, it’s not currently available on the exchange giant Coinbase.
What is zilliqa coin used for?
But to figure out whether Zilliqa is worth buying, you need to have an understanding of what the coin and its underlying platform are all about. Essentially, the Zilliqa protocol is a blockchain that allows developers to create decentralized applications (dApps) that use smart contracts—similarly to Ethereum, Solana, and many others.
You can stake zilliqa coin through Zilliqa’s own Zillion portal, where you can earn around 6% per year. ZIL is also used in the proof-of-work verification system as a reward to miners, to execute smart contracts, and to process transactions.
Owning and staking ZIL is a way to vote within the network, which helps Zilliqa to do what it does best: Run a scalable protocol where lightning-fast transactions are possible. Speaking of which…
What does Zilliqa network do?
We’ve already mentioned that Zilliqa is a blockchain platform for launching apps which supports smart contracts, but it’s not exactly the only protocol to offer such a thing. What makes Zilliqa special is its sharding technology, and other features such as its secure programming language Scilla.
Let’s run through these features.
What is sharding?
Since sharding is Zilliqa’s main point of value, it’s worth looking at in considerable detail. Basically, most blockchain protocols verify transactions by adding blocks to their chain, and to do this they rely on the “nodes” in the network to validate. However, keeping everything in a single extremely long chain with many nodes isn’t very efficient—only one transaction can be processed at a time, and all nodes must agree.
Sharding breaks this large chain down into “shards” that only have to reach consensus with the other nodes in their shard (not the entire chain), and which can all process transactions simultaneously. As a result, Zilliqa can process thousands of transactions per second. The low congestion also keeps fees low, which helps to attract developers wanting to get away from Ethereum gas fees.
Zilliqa was the first blockchain to implement sharding on its mainnet—but it’s not the only protocol that uses the technology. Harmony also implements sharding, and other competitors are considering adopting the technology, including big names like Cardano and Polkadot, and even Ethereum itself.
Will Zilliqa ultimately be able to win the race, or could it get overtaken by a bigger name?
Sharding just about covers the scalability concerns related to blockchains, but if you’re familiar with this area, you’ll know that DeFi platforms take care not to achieve scale at the cost of security or decentralization.
Part of this puzzle for Zilliqa is the smart contract language Scilla, which keeps the network safe by scouting out potential bugs and vulnerabilities, ensuring that the contracts will do what they’re supposed to do. This prevents hacking-related incidents without the need for a central entity to coordinate everything.
You can also take solace from knowing that Zilliqa has never been hacked and uses enterprise-grade security protocols.
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