What is Tron (TRX)?
Tron is a blockchain-based protocol that seeks to “decentralize the web” by building a scalable, performance-focused, free, and global content sharing platform powered by smart contacts. Its self-proclaimed mission is to bridge the gap between content creators and content consumers by eliminating intermediaries. Put more concretely, Tron aspires to become a fully-fledged operating system supporting all kinds of custom decentralized applications or dApps.
History of the Tron Project
The Tron protocol was originally launched as a decentralized application on the Ethereum blockchain. The project was founded by Justin Sun, a Chinese entrepreneur who raised ~$70 million through an initial coin offering during the height of the crypto bubble in late 2017.
The Tron project had no trouble gaining the public’s attention as Sun was already well known in the FinTech and crypto industry. Before starting the Tron Foundation, Justin Sun—dubbed Jack Ma’s (founder of Alibaba) protege —was very well-known in Asia.
Sun formerly served as Chief Representative for Ripple in Greater China, which gave Tron a much-needed reputational boost and put him in proximity to people who would later be of enormous benefit to the Tron ecosystem. Moreover, just months after the project was launched, Sun further expanded Tron’s active user base by integrating Tron into an APP he founded, called Peiwo, which currently has roughly 10 million active users and is often called the Chinese Snapchat.
Unlike many other Ethereum-based projects that relied on ICOs, Tron wasn’t built by a decentralized network of pseudonymous developers but rather by a dedicated in-house development team featuring renowned tech developers.
Controversies and Success
By 2018, through aggressive and sometimes controversial marketing, Sun propelled Tron into the top ten cryptocurrencies in terms of market capitalization. At its height, and during the crypto bubble peak in January 2018, Tron’s native token, Tronix (TRX), reached a market capitalization above $15 billion.
This incredible success gave Tron Foundation members the motivation and resources to launch their own blockchain. Later that same year, Tron migrated from the Ethereum network and the ERC20 token standard to their own Turing-complete blockchain supporting smart contracts. It also features its own technical TRC-20 token standard. After the migration, the Tron Foundation acquired BitTorrent, the largest peer-to-peer file-sharing system in the world, which launched BTT (BitTorrent Token) on the Tron network.
The significant role that controversy has played in Tron’s history cannot be ignored. Firstly, Tron has been accused of plagiarizing their whitepaper. In 2019, Researchers from the Digital Asset Research (DAR) found multiple instances of text and code copied from other notable projects such as IPFS and FileCoin. Tron was also accused of violating EthereumJ’s (Java implementation for Ethereum) open-source license by copying code without providing a proper citation.
In September 2020, The Verge published a long-form piece on Justin Sun and Tron’s BitTorrent acquisition. Chris Harland-Dunaway, the reporter who wrote the article for The Verge, allegedly spoke to 18 different BitTorrent insiders. They described Sun as a narcissistic, self-absorbed leader who ran the company like an autocrat, didn’t care what anybody said, and had “no bottom to how low he’s willing to go to achieve his goals.”
To make things worse, in May 2018, a cyber-security testing service called Hacker One reported a critical flaw in Tron’s protocol design. Namely, the report revealed that a single computer could grind Tron’s entire blockchain to a halt by merely sending a barrage of requests tailored to sabotage the network. A single PC could effectively perform a distributed denial-of-service (DDoS) attack on the entire network.
Tron’s Blockchain Architecture
The Tron Virtual Machine (TVM) is a lightweight, stable, and scalable Turing-complete virtual machine running on the Tron blockchain. It can reportedly achieve 2000 transactions per second, compared to Bitcoin‘s 7 and Ethereum’s 50.
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However, what Tron makes up in speed and transaction throughput, it lacks in decentralization. Like the Binance Smart Chain, Tron is able to achieve high speeds and low costs because it is a centralized blockchain, using a consensus mechanism called Delegated-Proof-of-Stake (DPoS) that relies on a total of 27 validators or “Super Representatives.”
The Super Representatives represent particular validator nodes elected by the community to approve blocks and secure the Tron blockchain for six hours. Every six hours, TRX token holders who freeze their accounts can vote for a selection of Super Representative candidates, with the top 27 deemed the validators for that round. The Tron blockchain doesn’t charge transaction fees. Instead, the Super Representatives are incentivized to secure the Tron blockchain exclusively through block rewards or newly minted TRX tokens.
Blocks on the Tron blockchain are created every three seconds, and the block reward for every successful block produced is 32 TRX tokens, which means that Tron’s supply expands by a total of 336,384,000 TRX per year. In order to receive a portion of the block rewards, Tron users need to stake their TRX coins or freeze their accounts on the network.
What is the Tron Blockchain Used For?
Tron’s original promise was to “Decentralized the Internet” and bridge the gap between content creators and content consumers by eliminating intermediaries.
Tron intended to achieve this by using its blockchain platform as a distributed and decentralized storage facility that would make hosting content much more efficient and cost-effective. Tron’s idea was to allow anyone to host entertainment content on its platform and enable content consumers to directly pay media creators for access to their work via TRX tokens.
However, it is hard to say that Tron has achieved its original goals today. There’s virtually zero digital entertainment media hosted on the platform, and the project seems to have slowly but surely transitioned into being a standard centralized ecosystem for hosting decentralized applications. Even then, there’s relatively low activity in terms of DeFi on the blockchain.
Where to Buy and Store Tron (TRX) Tokens?
You can buy the Tronix (TRX) token on virtually all centralized cryptocurrency exchanges, including Phemex.
If you want to store your TRX tokens in your own wallet and use them for day-t0-day activities, you can use Tron’s official community-developed TronWallet or TronLink. If you wish to keep your TRX tokens in cold storage, then you can use other more commonly recognized hardware wallet brands such as Ledger, Trust Wallet, Cobo Wallet, and more.