In the cryptocurrency space, only a few altcoins manage to hold a prominent place. Tron is a great example, as it has become one of the most notable projects since its launch in 2017. In just a few months, the cryptocurrency made significant moves, transitioning away from Ethereum to its own blockchain, and in 2018, Tron price hit a record of $0.23. One of the main focuses of the project has been to transform the entertainment sector by leveraging blockchains for a content-sharing system, eliminating the middleman, and allowing content creators to directly connect with consumers and sell their products. If you’re interested in learning more about Tron, keep reading as we delve into how it works, its use cases, potential as an investment, and more.
What is the Origin Story of Tron?
Tron was created by a Chinese tech entrepreneur named Justin Sun. From the beginning of August to September 1, 2017, the TRON Foundation, also created by Sun, successfully raised $70 million through an initial coin offering. This happened a few days before ICOs were banned in China, with Sun leaving the country a week later.
In March 2018, Tron’s testnet was launched, followed by its mainnet two months later. Initially, Tron was an ERC-20 token, but it transitioned to its own blockchain in a relatively short time.
How does Tron work?
The Tron blockchain relies on smart contracts, which essentially represent automatic, self-executing contracts that are based on pre-established protocols. This allows developers to build DApps on the network, or content creators to publish and store media easily and freely, while receiving rewards directly from their audience.
TRX is Tron’s native token, which users can buy or stake to get bandwidth points( the free daily allowance is 5000 points), and if they don’t have enough of these, TRX can supplement the transaction fee.
Tron’s main architecture is split into three unique layers:
· The core layer carries out the primary fundamental tasks for the blockchain, from validating transactions and managing accounts to executing smart contracts. It utilizes Solidity smart contract language, which was originally created for Ethereum.
· The storage layer is designed to handle complex data storage, and it’s categorized into blockchain storage and state storage.
· The application layer is created by developers to build customized wallets and dApps – in fact, due to the fact that Tron supports smart contracts, developers get the opportunity to build diverse applications.
To validate transactions, Tron employs a delegated proof-of-stake consensus mechanism, which represents a variation of the popular proof-of-stake model. In the system that TRON uses, TRX holders can pledge their tokens as collateral by staking them, giving them the opportunity to vote for “super representatives” who will be in charge of validating transactions.
Tron’s Major Partnerships
Tron has formed several notable partnerships over time, which are worth mentioning when discussing the project. One of the biggest names Tron is working with is Samsung, as it has collaborated with it for blockchain projects, and integrated with Samsung Blockchain Keystore, enabling built-in blockchain wallets on Samsung mobile devices to acquire TRX tokens.
Notably, Tron bought BitTorrent in 2018 for $140 million, and then developed the BitTorrent ecosystem and the BTT token. Moreover, in 2019, it acquired Tron’s decentralized exchange known as TRXMarket. Lastly, in 2019, Opera web browser incorporated Tron support to its built-in crypto wallet. These major partnerships offer insight into its growth potential and potential viability over the long run.
What are Tron’s Use Cases?
Use cases are always relevant when evaluating a cryptocurrency. As for Tron, it has some areas where it already excels, with the prospect of exciting partnerships in the future:
· Finance. Developers are equipped with the necessary tools to create next-gen decentralized finance apps. With cheap and scalable transactions, Tron paves the way for a transparent, decentralized financial future.
· Governance. The DPoS consensus protocol shifts the power from governance to tokenholders, meaning that the decisions are made based on the community’s will.
· Multimedia. There’s a digital media aspect to the Tron network, as it provides a free P2P decentralized content ecosystem, which allows creators to publish and monetize their content easily directly with an audience.
· Gaming. Tron’s impact is significant on the gaming industry, especially because it allows developers to create play-to-earn games, offering players a seamless experience and the ability to earn real money.
· Art. Tron enables artists to retain control of their intellectual property and receive fair compensation thanks to decentralized solutions for fan communities and commerce.
Should you Consider Tron as an Investment?
There are a few controversies surrounding Tron, but despite them, it ranks among the top cryptocurrency by market capitalization. Without a doubt, it has potential, which is proven by the fact that it has over 85 million accounts, and has processed beyond 3 billion transactions. Moreover, in September 2021, it ranked 2nd for overall transactions on blockchain, following Ethereum. Its focus on the entertainment sector is quite unique among blockchain projects, while its acquisition of BitTorrent is a notable development that further supports its potential. Even better, with Tron, you get the chance to earn passive income – although this is only worthwhile if you are interested in Tron as an investment, because you will earn more TRX tokens.
That being said, Tron is a high-risk investment, which is something to keep in mind. It has a few strong competitors, and it has always been controversial throughout the years. If you do decide to buy Tron, consider making it a small part of your investment portfolio, and prepare for volatility as crypto prices can see sudden price fluctuations.
Concluding Remarks
Tron stands out in the competitive crypto landscape by providing a unique vision centered around the digital entertainment industry. With a robust technological foundation, and a delegated proof-of-stake consensus mechanism, Tron empowers developers, content creators, and users alike. While its innovative approach makes it a project worth watching, it’s important to not overlook its associated risks and controversies. As with any crypto investment, diversification, careful research, and a long-term perspective are essential, and investors should always balance potential rewards with realistic expectations and sound financial strategy.
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