Defining Theta Network
Chances are you do more on the internet than just looking up crypto prices and reading up on your favorite cryptocurrencies. There’s a good bet you watch videos on YouTube and other similar websites. YouTube, in fact, is the world’s second most visited website in the world.
The demand for video content on-demand is so high that YouTube pulls over one hundred million views per day! Surely there is spill-over from YouTube - which is where Theta Network comes into play.
Theta Network, run by Theta Labs, is a decentralized video sharing platform which uses blockchain technology to help reduce costs and increase availability of video content. You could compare Theta to BitTorrent in that some of the video content is shared on Theta’s P2P platform for download, similar to the file sharing platform.
Theta Network also pays content creators based on the amount of content they upload and how many views they get. Creators are paid in THETA. Think about Theta Network as a blockchain-based alternative to other more expensive video sharing and streaming platforms. Read on to find out more about the most popular content sharing platform in blockchain.
The Theta Blockchain
The Theta blockchain has been specifically designed to facilitate quick or instant payments to content creators for the videos they upload. Contributors and consumers alike benefit from the streamlined arrangement as contributors can focus more on content while users reward contributors themselves.
The Theta blockchain achieves instant payments with a proof-of-stake (PoS) consensus algorithm, similar to the algorithm Ethereum is moving towards. In the case of Theta Network, PoS involves staking THETA and TFUEL to help produce more blocks on the blockchain. The more you stake, the more resources you supply to the network, and the more rewards you earn.
Validators and Nodes
The Theta blockchain has a two-layer setup, according to its whitepaper, that keeps the network secure and ensures the content keeps flowing. The first layer is the validator layer. Enterprise validators like Google and Samsung have supported the growth of the network by staking over 1 million THETA tokens each.
Validators serve a very important role in the formation and security of the network itself. Validator nodes propose new blocks on the blockchain, meaning they produce the space for each new block to be formed.
The second layer is arguably more important - the Community Nodes. While the enterprise nodes help firms gain a deeper understanding of the Theta network and its underlying technology, the community nodes empower the community to take control of the network.
There are three types of community nodes: Guardian Nodes, Edge Nodes, and Elite Edge Nodes.
Guardian nodes seal blocks and act as a check on malicious or otherwise non-functional Validator Nodes. Community-run Guardian Nodes now number more than 3,000 with over 60% of all Theta tokens staked.
Edge Nodes are a decentralized network for video and data delivery, and more general purpose edge computing. Running an Edge Node allows users to relay video streams over the Theta Network and process video encoding jobs.
Finally, you can stake TFUEL on an Edge Node to upgrade it to an Elite Edge Node, enabling “Uptime Mining,” the tokenization of Internet bandwidth and availability. These are meant to enrich the Edge Node network by supplying more TFUEL rewards.
Turing Complete Smart Contracts
Theta Network now features Turing complete smart contract capabilities. This opens the door for integration with Ethereum-based dApps. Since the Theta Virtual Machine is compatible with Ethereum Virtual Machine (EVM Constantinople fork), porting over existing Ethereum-based contracts is simple and thousands of smart contract developers can easily jump to building on Theta.
Theta has a few native dApps that help users like you keep track of the network and stay on top of the hottest content.
Theta Explorer is the way you can track all the activity on the network, like etherscan for Ethereum and BSCscan for BSC. Any transaction made with any of the native tokens on-chain can be tracked with Theta Explorer. By entering an address into the search box, you can view the balance, value and all the transactions made through that address.
Theta Wallet is, quite simply, the wallet dApp for Theta’s native tokens.
Thetaswap is the first DEX on the Theta Network. There you can swap any TNT-20 tokens - with TNT-20 being the protocol assigned to any tokens operating on the Theta Network. Think of Thetaswap like the Uniswap DEX for Theta users.
THETA, TFUEL, and TDROP cryptocurrencies
The Theta Network now offers three different cryptos for use within the ecosystem. Since the project has its own mainnet, it is afforded the luxury of launching any utility or governance token it needs.
The most important coin on the Theta Network is arguably the namesake THETA. It was first launched as an ERC-20 token, but left Ethereum upon launch of the mainnet.
THETA is considered the governance token of the network. Theta tokens are more akin to shares, and holders of these will supposedly be responsible for the direction of the project going forward. It has a fixed supply of 1 billion tokens, which makes it prohibitively expensive for a malicious actor to acquire enough tokens to threaten the network.
TFUEL is the payment token on the network. Unlike with Ethereum where Ether is used as gas, Theta uses a dual-token setup where THETA is the governance token and TFUEL is the token used for paying transaction fees and paying content contributors.
In order to pay for the data being streamed, the network uses a token called TFUEL. When someone shares the video content with someone else who’s trying to watch the video, the streaming site pays them in TFUEL tokens. If you want to start watching content on Theta.tv, you’ll pay TFUEL for each video you watch.
Staking THETA to run a node pays out in TFUEL. You can then use that TFUEL to trade on speculative markets or pay for content on the network. TFUEL total supply is currently 5.2 billion tokens with a fixed 5% inflation rate.
TDROP is the latest token which Theta Labs has launched for the Theta Network. With TDROP, or Theta Drop, holders can make governance votes on Theta’s new NFT Marketplace. TDROP tokens will be earned by users each time they make a primary or secondary purchase using TFUEL on the ThetaDrop NFT Marketplace. You can think of it as ‘mining’ TDROP by providing liquidity to the marketplace, according to the whitepaper.
The main goals are to improve the marketplace liquidity and disincentivize wash trading. This mechanism is similar to how many DeFi protocols bootstrapped their own liquidity. It incentivizes early adopters of ThetaDrop to provide liquidity, which enhances price discovery, improves trading volumes, and drives more user growth and adoption.
Theta Labs has created an impressive content sharing platform on Theta Network. It is a multi-faceted platform for content creators, and now even NFT creators, to share their work and get instant electronic payments for their efforts. Blockchain technology has facilitated this sea change in the content-creating industry, which major players in other industries have noticed.
Theta Labs itself has a nominal amount of income, but the contributions it has made to the industry can hardly be measured by the revenue it generates. Traditional industrial players are now gaining expertise in blockchain technology through collaborations with Theta Labs, which will eventually lead to general adoption.