All About 0x: Beginner's Guide 2020

Fiduciary money exists to pay for the goods and services that others offer us. The act of transferring money from one person to another represents a transaction, and this must be reflected in an accounting book. Banks are in charge of this, and they do it in a very discreet way, so that the procedures are performed only by their staff. This provides security to its users, which is why they entrust their money to these institutions.

In the world of cryptocurrencies, it occurs in a similar way, although the peculiarity that instead of allowing third parties to be in charge of keeping track of our transactions, it is precisely those integrated into the community. Cryptocurrencies are mainly characterized by their fully digital and decentralized nature, since they are not issued or managed by any company or state.

Of course, blockchain technology, which allows grouping all transactions validated by miners in the network, represents a completely revolutionary security measure, especially due to the fact that it depends on all the members. However, many people remain skeptical about it, and continue to lean towards the traditional and, of course, comfortable option of delegating this great responsibility, so they resort to centralized platforms to save their money.

However, using centralized platforms is far from the best way to do it. If we analyze well, in an independent and decentralized environment like that of cryptocurrencies, it is a bit absurd to include third parties in transactions. But despite this, platforms have been generated especially for this, which are of special interest to hackers, making their users very susceptible to scams.

The 0x has emerged as an advance measure to try to solve this type of problem when exchanging the Ethereum tokens, the second cryptocurrency today (preceded by Bitcoin). In the following article we explain what it is, its origin, its purpose and other details about this interesting exchange project.

What is 0x and what is its purpose?

The 0x project, also known as the ZRX, is defined as an open source protocol that allows decentralized changes to the ERC 20 tokens as part of the Ethereum blockchain.

This protocol is based on Ethereum smart contracts and, therefore, its main purpose is to facilitate decentralized token exchanges in an economic, fast, efficient and, of course, reliable way.

Exchanges

In order to better understand the objectives of the 0x project, it is convenient to talk a little about exchanges in the world of cryptocurrencies. Let's start remembering that to obtain cryptocurrencies, we can go to three basic procedures. One of the most difficult methods at present, which is mining, which requires great computing power and energy. Second, obtain them as payment for a service or product. And finally, buy them, and for this we require exchanges.

Therefore, we can define them as exchange houses. Exchanges are platforms on which we can acquire cryptocurrencies in exchange for fiat money such as the euro or the dollar, and even in exchange for other digital currencies, such as Bitcoin.

Exchanges can be centralized and decentralized. The former involve a third party that mediates the transaction from one person to another, as is the case with banks. However, this again involves charging fees and increases the risk of scam by hackers. On the other hand, we have the decentralized ones, which despite having the great advantage of reducing the vulnerability of users to these attacks, since the authorization of operations depends precisely on themselves, which is why they can be quite slow and very little compatible with different platforms.

The creators of 0x maintain the fervent idea that cryptocurrencies are here to stay, and that as time passes, the number of tokens on the network will increase. For this reason, they have given rise to ZRX, seeking to facilitate the exchange of these and promote the decentralized character, bringing together in a single protocol useful points from both centralized and decentralized exchanges.

Who created 0x?

The 0x project has a very close origin, just in 2016, when two young people agreed on the idea that, with the great rise of cryptocurrencies, it would not be anything strange that in the future all transactions were carried out using tokens.

The 0x co-founders are Will Warren and Amir Bandeali. Warren, the CEO, studied mechanical engineering at the University of California, San Diego, and conducted applied physics research at the Alamos National Laboratory. Bandeali, the CTO of the project, studied finance at the University of Illinois, Urbana-Champaign and after that became a merchant at DRW. Both are currently working on research and development of the aforementioned smart contracts.

But for more details, the 0x project team is made up of other professionals in different areas of knowledge. Among them, of course, blockchain technology engineers, software engineers, economics strategists, graphic designers, among many others.

In addition to this, we cannot fail to mention his advisers, who had already worked in the companies Coinbase, Polychain Capital and Pantera Capital. These last two, in conjunction with other companies such as Jen Advisors, Blockchain Group and Blockchain Capital currently give Project 0x financial support.

How does the 0x protocol work?

Simply put, tokens operate as valid tokens in a single environment, which is why it is necessary to exchange them in order to use them in others. For this, many opt for the aforementioned centralized exchanges. However, several million dollar losses have already been reported due to their vulnerability in terms of security. That is why we will dedicate ourselves to simply explaining ZRX as a decentralized alternative that eliminates the drawbacks associated with the previous ones.

To understand the operation of the 0x protocol, it is first necessary to explain to our readers the term of smart contract . The contracts of our daily life represent agreements between one or more parties in which both will benefit, all under a series of conditions specified in writing and accepted on a totally voluntary basis. In general, this agreement is supervised by a third party, a notary, for example, and not all the requirements set forth therein are necessarily met.

However, a smart contract can be easily defined by softwares that make agreements that are automatically fulfilled once the intervening parties stipulate the conditions for it. The big difference with paper contracts is that computer scientists are subject to a dependency structure of the type: Once Part A does the job, Part B does their part of the deal. And, of course, there is no external agent mediating that task.

We will call DEX the contract that corresponds precisely to the main characteristic and raison d'être of this project: Decentralized Exchange, which translated into Spanish means decentralized exchange. In addition, we will talk about a Creator and a Recipient that will allow describing the process of exchanging a Token A for a Token B under the protocol in question:

1. First, the Creator accesses their Token A balance through a decentralized exchange order, DEX.
2. Again, the Creator creates an order to exchange Token A for Token B. This is similar to a typical contract in our daily life, in which the type of exchange to be made will be specified, the signature that is subject to the private password, and the expiration date, after which it will become invalid.
3. The Creator can use any means of communication to transmit this exchange order.
4. A Recipient will be responsible for intercepting this order and makes the decision to comply with what is requested in the smart contract.
5. Once the request is fulfilled, the Recipient approves the DEX and has access to his Token B balance.
6. The Recipient presents the signature of the manufacturers associated with the DEX in question.
7. The DEX contract will automatically verify the manufacturers' signature, as well as the expiration date to verify that it has not yet been fulfilled.
8. Finally, once the verification phase is complete, the tokens are transferred from one individual to another according to the specifications of the contract.

However, there is an information flow outside the Ethereum blockchain, which is managed by the Relayers, who are in charge of facilitating transactions in exchange for an economic incentive. Below we will explain its function in the protocol:

1. The Relayer has a schedule of rates in which it also specifies the address it uses to collect transaction fees.
2. According to this schedule of rates, the Creator generates a transfer order with Rate A and Rate B. The recipient of the rate and his signature subject to his private key are also specified here.
3. The Creator sends the signed order to the reception address of the Relayer.
4. Once the Relayer receives the order, it proceeds to verify that the rates are in accordance with its rate schedule, and its validity. If you find the order to be valid, publish it in your order book. Otherwise, it is discarded.
5. With this, users receive an updated order in the order book, in which the one sent by the Creator will appear.
6. The Recipient fills the order sent by the Creator by sending it to the exchange contract on the Ethereum blockchain.

The fees for each transaction can be issued from the Creator or the Recipient to the Relayer once a contract is concluded.

At this point, perhaps the reader has had the idea that the described process departs from the decentralized principle presented as the north of this project. However, it is necessary to limit that the function of the Relayer is not to carry out operations on behalf of the participants in the same, but to receive and spread the requests from the book, using generic messages for it. With this, we keep the DEX base.

What is the price of the 0x?

Although it is a fact that one of the most outstanding advantages of the 0x project is that of allowing exchanges to be made in an economical way, it is clear that we clarify certain important points related to this topic.

Keep in mind that 0x is completely free, that is, it does not charge absolutely nothing to use its protocol. With this, the dependence on the blockchain is reduced, and in this way it seeks to end the costs of transactions, but this does not completely exempt it from the costs. And is that in the event that a person decides to use the 0x protocol to create a decentralized cryptocurrency exchange, they can charge fees to their users for it.

For the middle of July of the year 2018, the price of the 0x ZRX token is $ 0.92.

What are 0x ZRX tokens?

Now, we have clarified that tokens play the role of tokens that are valid only in a certain environment. In the case of cryptocurrencies, with them you can trade anything that is negotiable, commonly representing goods or services.

With this clear, we can then talk a bit about the 0x (ZRX) token, which is the only Ethereum token. Let's remember that if a person uses the protocol of the project of the same name to create an equally decentralized exchange platform, they would have the freedom to put a price on their services. With the 0x (ZRX) token users can pay these exchange fees to Relayers, making it stand out as its main function.

Where can we buy and store 0x ZRX tokens?

Currently, there are different websites dedicated to buying and storing 0x ZRX tokens, but here the issue of currency compatibility comes into play. Next we will quote the mentioned platforms, specifying their compatible currencies:

• Binance, whose supported pairs are ZRX / BTC and ZRX / ETH.
• Livecoin, whose supported pairs are ZRX / BTC, ZRX / ETH and ZRX / USD.
• Bittrex, whose supported pairs are ZRX / BTC and ZRX / ETH.
• io whose compatible pairs are ZRX / BTC, ZRX / ETH.
• Cobinhood, whose supported pairs are ZRX / BTC and ZRX / ETH.
• IDEX whose compatible pairs are ZRX / ETH.
  In this section, it is worth mentioning that, for example, it is not yet possible to buy 0x tokens with Paypal dollars directly. In any case, the procedure would follow the traditional guidelines in this world. First, locate a platform that allows you to buy Bitcoins, and after that, send them to an Exchange platform that allows them to be exchanged for ZRX, as is the case of Binance, one of the most popular sites.

Conclusions

Just like the arrival of cryptocurrencies, which for many have come long before the world was ready for it, the 0x project emerges as an alternative for the present and the future.

The main objective of the ZRX protocol is to solve the vulnerabilities associated with centralized exchanges, taking their strengths and merging them with those of decentralized exchanges. With this, it seeks to facilitate the exchange of Ethereum tokens, which have a good forecast for the future and guarantee the security of the assets of the participants.

Its founders have foreseen that between 10 or 15 years there will be so many tokens that a decentralized platform will be necessary to make exchanges quickly and easily, and without involving intermediaries, and for this reason they have worked on this protocol.

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