TRON

What is TRON (TRX)?

TRON is a blockchain-based operating system that supports smart contracts and decentralized applications (dApps). It began with the aim of supporting content creation but evolved into a platform that serves as an alternative to Ethereum.

One of the main aims of TRON remains to democratize the internet and give content creators a decentralized platform. The current ecosystem of centralized platforms often disadvantages creators and consumers, which is a problem TRON seeks to solve.

TRON looks to carry these goals out by supporting on-chain governance, providing high scalability, and offering wide support of various token standards, including TRC-10, Ethereum-compatible TRC-20, and the non-fungible TRC-721.

Tether on the TRON blockchain is a good example of a TRC-20 token, and it is known as USDT-TRON or TRC20-USDT.

When Was TRON Launched?

TRON was founded in September 2017 and launched its mainnet in 2018. Originally existing as an ERC-20 token on Ethereum, TRON raised $70 million in an ICO before moving to its own network.

TRON announced the acquisition of BitTorrent in July 2018, a month after the creation of its genesis block. Before the turn of the year, dApps were already running on TRON and the network had seen over 100 million transactions.

Who are the Founders of TRON?

Justin Sun, formerly associated with Ripple and recognized by Forbes Asia as one of its 30 Under 30, was TRON’s founder and serves as its CEO. He is also the CEO of BitTorrent, following its $140 million acquisition by TRON in 2018. Despite Sun’s successes with TRON to date, he has been no stranger to controversy. A public dispute with Ethereum founder Vitalik Buterin led to various claims of plagiarism. In 2022, The Verge published a scathing report on Sun’s past activity.

Among other things, this article suggested that Sun “escaped” China to evade its ICO ban, given that TRX had just had its own ICO. It also alleges that Binance CEO Chanpeng ‘CZ’ Zhao tipped him off to the ban’s upcoming announcement.

However, in late 2021, the TRON Foundation announced that it would be dissolving in July 2022, and Justin Sun would be stepping down from the role of CEO.

In an open letter, Sun said that the network was now self-sufficient enough to run as a decentralized autonomous organization (DAO).

How Does TRON Work?

TRON users need to acquire ‘resources’ to make transactions or call smart contracts on the network. TRON categorizes these resources into Bandwidth, CPU, Storage, and RAM. Users have to freeze their TRX to obtain Bandwidth and Energy.

Regular transactions on the network consume Bandwidth Points, while smart contract interactions consume both Bandwidth Points and Energy. According to TRON’s whitepaper, each account gets 5000 free Bandwidth Points every day.

These accounts come in three forms:

• Regular Accounts are used for standard transactions.
• Token Accounts store TRC-10 tokens.
• Contract Accounts are smart contract accounts that are both created and triggered by regular accounts.

TRON also features its own virtual machine called the TRON Virtual Machine, or TVM. It serves as an operating system used for running smart contracts. It differs from others of its type as it uses the concept of Energy to transact instead of requiring gas fees.

How is TRON Secured?

TRON uses a delegated proof-of-stake (DPoS) mechanism for consensus that differs slightly from the conventional proof-of-stake (PoS) model.

The standard PoS mechanism sees token holders lock their token balances to become validators who take turns proposing and voting on the next block. Validators with a greater ‘stake’ in this system, or a greater amount of locked tokens, wield greater influence over the network.

In TRON’s DPoS consensus mechanism, 27 Super Representatives (SRs) produce blocks for the network. Every 6 hours, TRX holders who freeze their accounts vote for a selection of SR candidates based on various criteria. The top 27 accounts in this election become SRs.

TRON generates one block every three seconds. Each block awards 32 TRX to SRs, amounting to 336,384,000 TRX being awarded to SRs annually. According to TRON, this DPoS system creates a network speed of 2000 transactions per second.

These transactions and indeed all of the tokens and data on the blockchain can be queried using TRONSCAN, the network’s blockchain explorer.

What Makes Delegated Proof-Of-Stake Different From Proof-Of-Stake?

The PoS consensus mechanism was created to eliminate the problem of huge demand for computing resources present in proof-of-work blockchains like Bitcoin.

While the staking system revolving around token balances solves this problem and results in highly secure blockchains, PoS does suffer from complex communication between nodes.

In TRON’s DPoS however, the selection of SRs and passing of responsibility to them streamline communication significantly. Votes are cast not for blocks but for the position of SR, which makes DPoS both fast and highly efficient.

What Makes TRON Unique?

TRON’s performance characteristics make it extremely appealing to developers. With security, scalability, and decentralization being the ideal trinity, TRON makes a case for being able to serve up all of them alongside its speed.

Furthermore, the innovation of its Virtual Machine to use Energy rather than gas has made TRON an extremely cheap alternative for users, as expensive transaction fees are absent on TRON.

Given these benefits, the decentralized application ecosystem on TRON has grown at a rapid pace in just a few years.

Because TRON focuses on digital content and thus entertainment, dApps within the ecosystem are categorized as Games, Gambling, Collectibles, and Exchanges dApps.

At the end of 2019, TRON overtook EOS as the second-largest public chain platform for dApps, with the number one being Ethereum.

What are Smart Contracts?

Considered one of the primary uses of blockchain technology, smart contracts are pieces of public, immutable code that automatically carry out an agreement.

The main benefit of this is that expensive, trusted third parties and other facilitators (for example, the bank facilitating an escrow when completing a financial deal) can be removed from the equation. This reduces the cost, time, and resources involved.

Not to mention, the code used in the smart contract cannot be changed once deployed and can be viewed by anyone at any time. This ensures that the code is essentially subject to public audit and thus can be trusted.

How Much TRX Is In Circulation?

TRX is an inflationary token without a maximum supply cap thanks to its rewarding of Super Representatives with over 336 million TRX every year.

Over 92 billion TRX are in circulation as of June 2022, with a total supply of over 100 billion TRX.

In the 2017 ICO, over 15 billion TRX went to private investors and 40 billion went to the ICO participants. Moreover, the Tron Foundation received 34 billion and a company owned by the founder Justin Sun got 10 billion TRX.

How Do You Buy TRX?

As a cryptocurrency that is popular among dApp developers and consistently in the top 25 in terms of cryptocurrencies by ‘market cap’, TRX is widely available. You can buy TRX on most major cryptocurrency exchanges.

TRX can also be purchased peer-to-peer as well as on decentralized finance (DeFi) dApps within the TRON ecosystem.

Is It Possible to Buy TRX Instantly?

The TRON blockchain is extremely fast, creating new blocks in just three seconds with very high throughput. This means that P2P and DeFi purchases of TRX will settle in no more than those three seconds that it takes them to be recorded on the blockchain.

That said, purchases on a centralized exchange (CEX) will seem instantaneous, but transactions performed on these platforms are notional. Account balances change to reflect these transactions, but no actual TRX settlement takes place until and unless you withdraw your TRX into your own private wallet.

How Do You Store TRON?

Like almost every other cryptocurrency, TRON can be stored in wallets. These can include a CEX account, but largely come in two main forms:

• Cold wallets. These wallets don’t connect to the internet, making them extremely safe from hacks and other forms of attack. They can include devices not connected to the internet or simply some form of physical storage of the wallet’s private keys.
• Hot wallets. Hot wallets are connected to the internet and typically come in the form of desktop clients or browser extensions. A notable example of the latter is the TronLink wallet, which was first launched on TRON’s official website and backed by the TRON Foundation.

TRON Energy Consumption

TRON was launched at a time when the existing giants in the cryptocurrency world, Bitcoin and Ethereum, were coming under the microscope for their use of energy via their proof-of-work consensus mechanism.

As a result, TRON was designed as a proof-of-stake protocol to cut down on the blockchain’s energy usage. As such, rather than requiring a huge number of computers to contribute an increasing amount of computing power towards securing the network, validators simply rely on their stakes of TRX and can contribute with just one machine.

Is TRX a Good Investment?

Given that TRX is a relatively older, tried-and-tested cryptocurrency with four years of mainnet behind it at the time of writing, it’s clear that it has been battle-tested.

Furthermore, its consistent placement among the most valuable cryptocurrencies certainly shows that investors view it favorably.

The successful realization of TRON’s vision, its path of decentralization, and the favor shown by dApp developers give TRX definite potential. Moreover, its requirement for freezing certainly could offset its inflationary nature.

However, critics point to the relatively high amount of TRX being given to Justin Sun and the TRON Foundation (45% of about 100 billion TRX) as a cause for concern, although much of that is already in circulation.