Theta in focus, will it topple Youtube & Twitch?

Theta in focus, will it topple Youtube & Twitch?

By Austras | Crypto in focus | 21 Oct 2021


With internet access spreading through out the world, companies struggle to deliver high-quality service to all corners of the world. Facebook is even building a subsea cable connecting southern Europe, south-west Asia & northern Africa to help deliver better internet between the regions. Theta aims to fix this problem more efficiently, through a blockchain.

Background

Theta took its first steps in 2017 on the Ethereum blockchain. It was built to allow users to share their bandwidth and earn rewards. This project was built by Theta lab which was owned by Silver.tv & had the project headed by the CEO Liu Mitch. Before the launch it managed to raise money through an ICO to corporations, companies and large investors, there was a plan to offer an ICO to the general public but that was cancelled due to legal concerns.

3 years after its launch Theta branded out to its main-net 2.0, migrating away from Ethereum to build its own blockchain. This change also brought along the support for smart contracts. This further expanded the usability to areas outside of streaming, their smart contracts are ERC-20 compatible which allows any Dapps running on Ethereum to migrate to Theta. The latest large entry into the Theta ecosystem was Theta drop, an NFT marketplace that markets itself to be cheap and more environmentally friendly compared to its competitors.

Network

The network today is built on a modified version of the byzantine fault tolerant Proof-of-Stake method. There are head validators running main nodes that require a minimum of 10.000.000 Theta to be staked in order to participate in block creation and governance. Some of these are run by Google, Binance & Blockchain.com. The cost in Theta is high and would cater to a more centralized system, Theta has this modified by also allowing two extra sets of nodes known as guardian nodes & edge nodes to prevent this. Guardian nodes function similar to the main nodes but only require 100.000 Theta to be active and participate in governance & block creation. Edge nodes are the grunts, users can run these and share their spare bandwidth to nearby users and earn rewards in Tfuel.

This can however cause a spread of validation and effectively slow down the network. For the edge nodes, they also use a "aggregated signature gossip scheme", this essentially functions as a communication ripple between nodes as they broadcast verified transactions & activity from their neighbouring nodes.

Function of the network is split in two, Theta and Tfuel. Theta fills the governance and staking function of the network, holding a higher number of Theta can vastly increase your rewards for using the platform. Tfuel powers transactions and smart contracts and has a yearly inflation rate of 4%. There is burn mechanisms implemented to help combat this, 25% of any fees in Tfuel are burned, and 100% of any fees associated with smart contracts are burned.

Use case

Main function of the blockchain has been to allow more users to access streaming services and also earn from helping others access this content. The edge nodes mentioned earlier share their bandwidth and are given Tfuel as rewards as an extra income source. This allows both users that can share their bandwidth to earn an income and to users who have trouble streaming can make that experience more seamless. Staking and participating in network security also allow for an income in Tfuel if you keep your Theta locked. 

Apart from the streaming use cases that Theta performs exceptionally well with, the ERC-20 compliant smart contracts also opens the door for a whole world of Dapps that can be built on chain. The chain can support NFTs, DEFI & DEX effortlessly and has higher performance than Ethereum along with lower fees thanks to the split coins. All of these places where Theta can be used help increase its adoption and along with that its price.

Theta today

Theta started out very centralized due to its governance method. With time it became more decentralized and today the project can be considered to be in its prime. A strong ecosystem is built on top of it, and it is expanding with every passing week. The streaming aspect sets Theta apart from other competitors that mainly cater to smart contracts and that is intriguing and opens up the door to potential growth. There are, however, issues with profitability as most users won't be able to cover their power or internet bill with the income from Theta alone, the network needs nodes running to be healthy and if there is low incentive that can be a problem in the future. It has the potential but if it will be able to fly you'll have to decide for yourself.

Pros:
  • Strong use case
  • Many and strong partnerships
  • Vibrant eco system
Cons:
  • Low incentive to help block creation
  • Low rewards
  • Still new project

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Austras
Austras

Product manager & tutor, love learning & teaching others. || https://cointr.ee/dorfel


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