Zilliqa is a public, permissionless sharding based blockchain and smart contract platform that is designed to maximize the number of transactions that can be performed at any given time. In addition to scalability, Zilliqa provides a smart contract layer to support smart contract creation by way of its native programming language, Scilla. Zilliqa also uses a unique consensus mechanism that the network reaches a consensus on transactions and contract executions through a hybrid of proof-of-work and Practical Byzantine Fault Tolerance (PoW and pBFT).
The native cryptocurrency of the Zilliqa blockchain is the Zilliqa coin, also called ZIL. ZIL is used to pay for transactions on the blockchain. These fees are used to reward the nodes that perform the calculations to operate the blockchain.
On its native chain, ZIL functions as both a governance token and as a cryptocurrency for funding the project. Like Bitcoin, Zilliqa's Proof of Work consensus yields block rewards paid out in ZIL token. However, unlike some other blockchains, mining rewards decay over a 10-year period to stabilize Zilliqa's hashrate.
Furthermore, Zilliqa miners can use commercial-grade GPUs for mining instead of dedicated ASIC machines. Given the exceedingly low price at around $0.000023 per transaction, ZIL is well-suited for microtransactions used in various decentralized applications (dApps).
The Zilliqa project was founded in 2017 by a group of researchers from the National University of Singapore. Initial team members included Xinshu Dong, Yaoqi Jia, Amrit Kumar, and Prateek Saxena (who previously worked with Loi Luu, CEO and Co-Founder of Kyber Network), among others. They incorporated the company behind Zilliqa (called Zilliqa Research) in Jun. 2017, a few months before the team launched its first testnet.
A blockchain is a record of the balances and transaction history of a group of accounts. This record is shared by a large number of independent computers (called nodes) that must agree with each other on the exact details. Each time a new transaction is added, all of the nodes check whether it is fraudulent then add it to their copy of the record.
It is possible to break this record into smaller, simpler parts that are easier (and therefore faster) to add to. Each smaller part of the main record is called a shard.Groups of nodes are assigned to each shard, and they perform the same operations as before, adding and checking new transactions. At routine intervals, a separate group of nodes combines the records from each shard to unify the information before sharding it again.
In this way, shards allow the balances and transaction data to be effectively accessible to the whole network, but without requiring every node on the network to have its own huge copy of the entire record. The nodes only handle the shard they’ve been assigned to.
A blockchain consensus mechanism allows independent nodes to share the same ‘truth’. In other words, to all have the same values for the balances and transactions histories of the accounts on the blockchain. There are many different kinds of consensus, but they all work by making it either difficult or expensive for one node (or a small group of nodes) to trick the rest of the network into accepting fraudulent transactions. Consensus allows good behavior to be maintained by all participants without a central authority.
Zilliqa uses an unusual consensus mechanism that combines proof-of-work (PoW) and Practical Byzantine Fault Tolerance (pBFT). PoW makes it difficult to trick other nodes because doing so would require a lot of computing power. The new record (block) gets added only if it was the first one proposed. The first node to successfully propose a new block gets paid a block reward in ZIL. pBFT makes it difficult to trick other nodes because all the nodes must unanimously agree on the truthfulness of the new block before adding it. The only way to add fraudulent transactions would be to simultaneously control all the nodes. Every node involved in the unanimous decision gets a small share of the block reward.
The Zilliqa team claims that PoW and pBFT together create a secure mechanism that allows for mining with lower-cost computing. The pBFT component means having the fastest computer is not the only requirement for getting a reward.