TRON is an interesting and incredibly ambitious digital currency project attempting to provide a decentralized platform to serve us users properly.
In Their Words:
“TRON is a blockchain-based decentralized protocol that aims to construct a worldwide free content entertainment system with the blockchain and distributed storage technology.”
In Our Words:
TRON’s objective is to come up with an entertainment platform that grants content creators utter control over their content.
Think of a decentralized combination of Netflix, YouTube and the App Store.
Technology
The TRON project is one that is incredibly complex, as such, we will aim to highlight its key features but you are encouraged to go through their whitepaper and complete further research if you want to learn the more technical details as regards the project.
We will first discuss the TRON token.
The TRON Token
There are actually 3 different tokens involved in the TRON project: TRONIX, TRON Power and the TRON 20 Token; we’re going to quickly outline all three and their uses below.
- TRONIX (TRX)– This is the token available for purchase/trade on the exchanges; it is required to access the TRON platform and is also used to buy and sell content upon it.
- TRON Power (TP)– This is essentially locked up TRONIX; users volunteer to lock up their TRX and receive TP in return, as well as voting rights and other privileges in the TRON ecosystem. TRON Power is not tradable and would of course be a long-term commitment. TRON Power is similar to Steem Power used on the Steemit platform.
- TRON 20 Token– TRON 20 Token allows content creators to create and issue their own tokens, similar to Waves and NEM.
The Platform
At its simplest, content creators will be able to list their content on the TRON platform and make it available for purchase; this content could be in form of music, films, images etc. These transactions will be completed using the TRX token and will not incur any fee charges.
The TRON ecosystem will as well incentivize content creators to encourage them to upload their content on the platform and help accelerate the TRON ecosystem.
Other cryptocurrency platforms will also be able to host on the TRON platform while offering their own tokens.
Users will be in the position transfer these tokens into any other on the platform using TRX as a bridge currency.
TRON Mainnet
On June 2018, TRON officially activated its mainnet, migrating from Ethereum blockchain, and completed coinburn of 1 billion TRX. Right after that Freewallet released the first TRX wallet for mobile and added TRX to Multicurrency wallet.
After mainnet launch TRON acquired BitTorrent, the pioneer in distributing computing, thus expanding its ecosystem with 100M new members.
IS TRON SOLVING REAL MARKET PROBLEMS?
- Problem – Censorship & Centralization
In many countries internet censorship and restriction is rife; government intervention means users are regularly unable to access particular websites.
In China, for instance, people are unable to access Facebook or Snapchat, while the Iranian government has prevented access to both Instagram and Telegram.
TRON’s Solution
The decentralized nature of the project means it should be free from censorship or interference.
- Problem – High Channel Fees
One problem experienced by content creators when trying to distribute their content is the high fees or commission rates charged by media platforms like the App Store and Google Play.
TRON’s Solution
Content creators will have utter control over their products as well as direct access to their consumers and, without the involvement of the middlemen, these costs are vastly reduced.
Token Economics
This is yet another incredibly important point that people often times overlook while investing in Cryptocurrencies – is the token price truly linked to the platform usage?
Investing in Cryptocurrencies is not the same as traditional investing, in which case you buy shares in a company. By investing in a cryptocurrency, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will as well rise.
With the majority of cryptocurrencies, the tokens don’t represent shares.
As such, it’s possible for the company to be successful (i.e., the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.
The ONLY factor determining token price is supply and demand on exchanges.
Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:
- Demand – Will there be token demand on the exchanges?
- Supply – Will there be excessive inflation hindering prices?
Let’s first look at demand:
What Are The Sources of Demand?
Users will be required to hold TRON tokens in order to access the platform and, on top of this, all transactions will also be completed using TRX.
As more content is listed on the TRON platform and users convert to the platform, the demand for the token will increase just as the price should.
The Result?
The price of the TRON token is sufficiently linked to the demand for the platform.
TRON has passed this test.
What Is The Likely Inflation Rate?
TRON generated a fixed supply of tokens (100 billion TRX) meaning a zero inflation rate but that doesn’t mean that new tokens won’t enter the market though.
A total of 40 percent of the tokens were sold during the Initial Coin Offering, meaning 60 percent of the tokens will enter the market at some point. So how will they be distributed?
- 35% – TRON Foundation/Ecosystem– It was recently announced that all of these tokens will be locked until January 1, 2020.
- 15% – Private Offering– No further details provided.
- 10% – Peiwo Huanle Technology Ltd– No further details provided but the organization’s CEO, Justin Sun, is also the founder of Peiwo. A question could potentially be raised here about where these tokens have in fact gone.
Coin Market Cap currently lists TRON as having a circulating supply of 65 billion; this would mean that all of the tokens that could enter the market have already done so.
As a result, we can assume that no more tokens will be entering the market until at least January 1, 2020 when the Foundation’s lock-in period expires.
Sun also announced on Twitter that the foundation has (TRON Foundation) had a coin burn which took place on the first quarter (Q1) of 2018, which decreases the circulating supply and an increase in token was felt as a result.
TRON has passed this test.
THE TRON TEAM & ROADMAP
The TRON Team
TRON possesses what seemingly is an extremely solid and well-rounded team. As a project overview, we will be providing our opinions on a few key players and we recommend that readers check out the TRON website for additional details as regards the team.
First up is the organization’s Founder and Chief Executive Officer, Justin Sun; previously involved with Ripple as chief representative for their Greater China Region. Sun is as well the founder of Peiwo, A Chinese social media platform with more than 10 million users.
He has also twice been listed as one of Forbes 30 under 30 (2015 & 2017), a depiction of the strong reputation he has within the business world.
Lucien Chen, the organization’s Chief Technology Officer (CTO) boasts a lot of experience in a number of first-tier internet companies while Product Supervisor Deuce Yu has extensive experience in the gaming industry, something that could be very beneficial to the TRON project when they reach the latter stages of their roadmap.
A final member worth mentioning is the Operation Supervisor, Charles Zhang, who is the former co-founder and COO of Elegance Space and additionally served as the Secretary-General of their Chicago branch.
Charles offers a vault of business knowledge outside of the crypto space and has been invited to give lectures more than a hundred times by Peking University, depicting just how well respected he is within the business world.
The TRON Roadmap
Another outstanding aspect of the TRON project is their extensive roadmap; a detailed six-stage, ten year plan, as highlighted below.
- Exodus – August 2017 to December 2018– Content distribution platform.
- Odyssey – January 2019 to June 2020– Focus on economic incentives and content empowerment to encourage growth.
- Great Voyage – July 2020 to July 2021– ‘Personal ICO’ implementation – content creators will be in a position to generate their own tokens and host their own ICO, capacitating them to further generate content.
- Apollo – August 2021 to March 2023– Building the fully decentralized trading platform for tokens.
- Star Trek – April 2023 to September 2025– Creating a decentralised gaming platform for users to create their own games.
- Eternity – September 2025 to September 2027– Users will be able to build their own gaming platforms.
Market & Partnerships
Operating in an industry that was worth $1.8 trillion USD in 2016, the TRON project also boasts quite a number of impressive partnerships already.
Through these partnerships with companies such as Baofeng, Peiwo and Obie, TRON has managed to garner over 200 million potential users already.
When this is combined with the recently announced project with game.com, TRON Dogs- Similar to Crypto Kitties, then the potential number of users is thus far impressive for the platform.
A side note surrounding the TRON Dogs project is that 2018 is the Chinese year of the dog; this is rather trivial but may help to drive uptake and is an extra point worth taking into consideration.
Chinese Endorsement
Most recently, the parent company of the Peiwo APP (The first app to host on the TRON platform) was identified as one of Beijing’s high-tech enterprises of 2017.
The National High-tech Enterprise is a policy set by the Chinese government to promote the rapid development of high-tech enterprises. Nonetheless, there are strict standards for inclusion.
“After being included, companies will enjoy a series of concessions in technology research and development, tax relief and personnel policies so as to help enterprises devote more energy and ability to independent research and development and to enhance their core competitiveness.”
Extracted from Tron Foundation’s Medium Page.
Considering China’s negative stance towards cryptocurrencies, this news is somewhat surprising and is a good sign for the long-term potential of the project.
Possible Barriers to the Project’s Success
Overambitious?
There is no denying that this is an incredibly ambitious project; TRON themselves highlight nine different types of risks involved in the project and while a ten year roadmap will be applauded by many, you also have to question the likelihood of them reaching that goal without a few hiccups.
RECENT CONTROVERSIES
Copied Whitepaper?
TRON recently came under fire after analysis of their whitepaper found a large percentage of it to be copied, almost word for word, from the IPFS and Filecoin whitepaper. The diagram below shows just how much was alleged to have been copied and details the lack of references.
Sun responded to this by saying that the original Chinese version of their whitepaper featured a number of references but since the alternative versions (English, Korean etc.) were translated by volunteers, they had missed a number of important details as well as the references.
The TRON Foundation also released a statement saying: “The design of TRON is based on its own system and the realization of codes, some codes of Ethereum were used as reference, we didn’t note related license, from now on we will note the copyright ownership and promise this won’t happen again.”
While we are of course not in a position to say anything with outright confidence, this is something that would worry us.
TRON have since removed all versions of the whitepaper from their website and have promised the release of a new whitepaper some time soon. This is something we certainly look forward to reading.
Justin Sun Sells 6 Billion TRX?
TRON also came under scrutiny recently when a post on Reddit alleged that CEO Sun had sold 6 billion TRX, this was proven not to be the case but did create some fear.
The post highlighted a wallet that they believed to belong to Sun due to the high volume of TRX, as well as the wallet also being linked to a CryptoKitties account called ‘justinpets’.
The wallet in question had sold over 6 billion TRX for ETH over a three week period. Even Litecoin founder Charlie Lee got involved, calling out Sun over this on Twitter.
Sun would respond to the allegations on his personal Twitter account by stating that the wallet in question actually belongs to a private investor and market maker who buys and sells TRX tokens in order to provide liquidity.
He also said that when it comes to any form of registration, he uses his Chinese name of Yuchen, as opposed to Justin. Upon learning the facts, Charlie Lee would apologize and delete the tweets accusing Sun.
While the project has certainly had some flaws, this episode proved to be a poorly researched accusation as opposed to anything untoward on TRON’s behalf. An example of what many in the cryptocurrency space refer to as FUD.
WHERE TO BUY & STORE TRON TOKENS
Where to Buy TRON Tokens?
As far as our opinion goes, the best exchange to purchase TRON tokens from is Binance; it is also available on a number of smaller exchanges but in our opinion Binance will offer the best prices and liquidity.
Where to Store TRON Tokens?
TRON is an Ethereum-based token which means it can be safely stored on any ERC-20 compatible wallets.
Our favorite option is the Ledger Offline Wallet.
Our other favorite option is MyEtherWallet which you can download via the link below:
Download Wallet HERE (MyEtherWallet)
For instructions on how to download and install MyEtherWallet, check out the video below (not produced by us).
Product & Traction
Tron is designed to ultimately make entertainment content both easier to sell and cheaper to consume. In theory, this goal is achieved by putting the content on a blockchain and the creators and consumers in a network of peers, eliminating the middleman. [4]
The network has built a set of consensus mechanisms, which can use minimum cost to solve identification and personal credit issues in online transactions. It also uses point-to-point transactions to avoid traditional centralized settlement structure. The network can play the host role between users and developers, to ensure authenticity and compliance of info credit.
As explained in their website, the Protocol offers “scalable, high-availability and high-throughput support that underlies all the decentralized applications in the TRON ecosystem”. The network incentivizes users to build their own decentralized entertainment applications (dApps).
Conclusion
While there is no doubting the potential size of the TRON project, there are a number of red flags that have arisen over time.
We are looking forward to reading the new whitepaper when it is released in the hope that it can alleviate some of the worries people have around the project.
If the project hits all of its targets then it could become one of the largest on the market but, as it stands, there are at the moment just too many questions around the project to consider a serious investment.
On top of this, the project is already priced very highly in the market – number 13 – so the upside potential is relatively small when compared to the considerable associated risk.
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