What is TRON?
TRON is one of the largest and most popular blockchain based operating systems in the space. Other bigger competitors that fall in this category include Ethereum and EOS. While others cover a broader set of applications, TRON focuses on the entertainment sector. It aims to create a decentralized entertainment ecosystem. Content creators will be able to monetize their content without the need for third party gatekeepers that take a big cut from their products such as iTunes or the Play Store. Centralized distribution networks also hold a significant choke point in the digital content market creating a barrier to entry for independent content producers. With Tron’s decentralized platform, content creators can go directly to the users. TRON is targeting major industries such as gaming, social broadcasting and gamblings applications. Although TRON focuses on the decentralized entertainment ecosystem, developers can still develop different apps on it.
Behind the TRON ecosystem is their own native cryptocurrency called Tronix (TRX). TRX will be used as the gas for the network to fuel transactions and network activity. It will also be used as a currency in the ecosystem. Content consumers can pay for content using TRX directly to the content producers. These content producers can then use the TRX to pay for other services or exchange for other cryptocurrencies. Since TRX is listed on almost all major exchanges and does considerable volume, TRX holders won’t have any issues with exchanging the token.
The TRON foundation was formed in 2017 shortly before they conducted their $70 million ICO for the TRX token. It was initially created as an ERC20, which ran on the Ethereum network, before switching over to its own token standard (TRC10) when it’s mainnet was launched in May the following year. Right now, developers can create their own TRC10 tokens. Popular projects that are based on the TRC10 standard include BTT (Bittorrent) and WINK.
TRON was founded by Justin Sun who has been grown into a polarizing figure in the crypto space. He used to work at Ripple as the chief representative for the greater China region. Right now, he serves as the CEO of TRON and Bittorrent. He was currently in the headlines for winning the bid to have lunch with investing legend Warren Buffet paying over around $4.5 million.
Tron acquired the San Francisco company Bittorrent in July 2018 for $140 million dollars. With over 170 million users worldwide, Bittorrent was a pioneer in peer-to-peer technology for sharing files. It was essentially a decentralized storage and hosting network. Following the acquisition, Bittorrent launched its own cryptocurrency on the TRON network in January of 2019. This was introduced in a project called Project Atlas. It is a new iteration of the P2P software. It provides users with a way to spend and earn crypto while sharing files. Before TRON, Bittorrent users can download files as long as they upload to others as well. There was no financial incentive for them to keep uploading after finishing their own download. In this new structure, users that upload will be financially rewarded with the BTT token.
In 2019, Poloniex was spun off its mother company Circle. Justin Sun was one of the investors when it spun off. Poloniex was a pioneer in the cryptocurrency exchange space. However, it was not able to keep up with upstarts like Binance that eventually took over the top position. However, they still do sizable daily volumes. In April 2020, Poloniex introduced their TRON powered IEO platform.
What sets TRON apart?
When creating a decentralized entertainment ecosystem, the network must be able to handle a large influx of transactions. For example, if there was a decentralized version of Youtube, it must be able to handle thousands if not millions of transactions per second since each view, like, comment accounts for a transaction request in the network. Unlike BTC’s 7 transactions per second and Ethereuem’s 15-25 transactions per second, TRX claims that it can consistently handle 2,000 transactions per second. This is mainly due to their delegated proof of stake architecture which will be explained in more detail below.
Fast transaction low fees
In the TRON network, It takes about 3 seconds for transactions to be validated and blocks to be mined. This is much faster compared to Bitcoin which mines blocks every 10 minutes.
TRON puts a focus on making their platform easy to use and build on for developers. It is written in Solidity, just like Ethereum, making it relatively easy for Ethereum dapp developers to switch over to TRON if they choose to. In October 2018, TRON launched the TRON Virtual Machine (TVM), a complete developers’ toolset, and 360 support system.
How does TRON Work?
Delegated proof of stake
TRON uses a delegated proof of stake (DPOS) consensus mechanism which is a variation of the Proof of Stake system. Unlike Proof of Work based systems, like Bitcoin which uses a lot of energy to solve cryptographic puzzles, proof of stake uses considerably less energy since it penalizes bad actors directly from their staked tokens. In DPOS, instead of giving all token holders votes proportional to their token holdings, token holders will use their tokens to vote for who should be their representatives. The TRON network allows for 27 Super Representatives. Their job is to verify transactions and produce blocks for the whole network. There is an ongoing voting process that happens every 6 hours for the Super Representatives so Super Representatives can quickly be removed in case of malicious activity and a new one installed. Currently, Super Representatives are rewarded with 16 TRX per block. 160 TRX is allocated to block rewards for the Super Representatives (top 27) and the next 100 highest voted nodes called Super Partners (28th to 127th).
Having a DPOS system means that there are a limited number of nodes, 27 in the case of TRX. It is precisely because of this low number that they are able to process transactions much faster. Given that this is a smaller pool, this brings up problems of centralization.
Different activities in the TRON network costs different fees. Aside from the transaction fees, here is a list of different fixed fee acitivities:
- Creating a witness node: 9999 TRX
- Issuing a TRC-10 token: 1024 TRX
- Creating a new account: 0.1 TRX
- Creating an exchange pair: 1024 TRX
|Price of TRX||$0.01408869|
|Avg. Block time||15 seconds|
|Reward per block||16 TRX + 160 TRX|
|Circulating supply||66,140,232,427 TRX|
|Max Supply||99,281,283,754 TRX|
July 2017 – Tron Foundation was established in Singapore
Sept 2017 – ICO 40% $70m
June 2018 – mainnet launch and genesis block
July 2018 – Acquisition of Bittorrent
August 2018 – TRON virtual machine was officially launched
October 2018 – TRON’s decentralized application store DappHouse was established
November 2019 – TRON’s Proposal 27 was enacted changing the TRX rewards for Super Representatives from 32 TRX to 16 TRX with another 160 TRX shared among the top 128 voted nodes.
Where can I buy TRX?
How to properly store TRX?
Since it’s mainnet, TRX tokens have to be stored on TRX supported wallet addresses. A good way to identify them is that these TRC10 wallets start with a T followed by a mix of 33 alphanumeric characters.
Hardware Wallets – auto generated
Online Wallets – auto generated
Real world use cases (Who’s using it?)
There are already multiple projects that have adopted TRON’s TRC10 token standard. Popular examples include Bittorrent’s BTT, WINK and Tether’s USDt (USDt is available in multiple blockchain networks one of which is TRON network. Aside from these, there are also a handful of dapps that are live on the TRON network. WINK and TRONbet are two popular examples, who happen to be gambling dapps, each with around a thousand daily users. A list of TRON dapps can be seen here: Top TRON Dapps
Pros and Cons
- High throughput capable of handling thousands of transactions per second
- Low transaction fees
- Team is very good with partnerships
- Centralization concerns given that there are only 27 block producing nodes
- Adoption especially outside of gambling is quite low
Blocks are mined every 15 seconds.
Since TRON is able to handle thousands of transaction per second and the demand is not yet high enough to fill that, transaction fees are quite low averaging around $0.0000901.