What is TRON? TRX explained

• TRON uses Delegated Proof-of-Stake (DPoS) to ensure the transactions all confirm the main blockchain while making it difficult to forge counterfeit chains.

• According to the team behind the TRON network, the system is able to process up to 2,000 operations per second without fees.  

Understanding the Basics: TRON network and the TRON Foundation

TRON (TRX) is a decentralised blockchain-based digital system. It was founded in 2017 by a Singapore non-profit organisation – the TRON Foundation. The founder is the current TRON CEO, Justin Sun. The foundation has offices in Singapore and San Francisco. 

Justin Sun's business background succeeded in attracting early interest from investors including Clash of Kings founder Tang Binsen and Dai Wei, the CEO of bike-sharing startup OFO Dai Wei.

The TRON foundation is a decentralised autonomous organisation (DAO). DAO is a new form of organisation based on blockchain technology, community governance, and the 'Code is Law' principle.

To learn more about DAOs, check out this article: 'What is a DAO?'.

The blockchain-based operating system was initially marketed primarily in Asia, but soon after the launch this crypto project went global and acquired BitTorrent. Originally based on the Ethereum blockchain, it switched its protocol to its own blockchain in 2018. Three years later, the digital platform already had 50 million accounts.

https://twitter.com/justinsuntron/status/1643446493326757888 

According to TRON's initial white paper, the team members behind the TRON network are followers of Tim Berners-Lee, and therefore, convinced that protocol, from the moment of its creation, is an asset for human beings, rather than a tool for making profits only reserved for small groups.

Wondering what Sir Tim Berners-Lee has to do with the evolution of the internet? Find out in this article: 'What is Web3?'.

The main aim of the platform is to host a global entertainment system for the cost-effective sharing of digital content. The idea behind this crypto project was to provide full ownership rights to creators of digital content and encourage them with more rewards for their creations and digital assets. 

The platform has its own cryptocurrency and transaction model similar to Bitcoin (BTC). TRON’s software successfully supports various kinds of blockchain systems, decentralised applications (Dapps), and smart contracts. Therefore, the digital platform emerged with the notion to create a decentralised internet and serves as a tool to create Dapps. 

If you are interested in finding out more about the decentralised internet and decentralised apps, why not read this article: ‘What are Examples of Web3? The Future of the Internet’. 

What is Tron's vision?

TRON is a crypto project dedicated to the development of a truly decentralised internet and its infrastructure. The project is based on the TRON Protocol, one of the biggest blockchain-based operating systems worldwide, that provides public blockchain support of high scalability and availability of Dapps in the TRON ecosystem.

https://twitter.com/TronixTrx/status/1646197738105876480 

In simple terms, TRON wants to ‘heal’ the internet by providing a number of important novelties, such as: 

a. Data liberation

The new internet should be founded on data that is uncontrolled and free. Data hosted on the TRON network is free with no central authority.

To understand why decentralisation is so important from a crypto point of view, we recommend reading this article: 'What is decentralisation & why is it important?'.

b. Enabling an improved content ecosystem

A content ecosystem simply means that users can obtain digital assets from content spreading. This vision is based on encouraging the crypto community and their creations.

Consumers can pay content creators directly with their TRON-based tokens (called TRX, explained later). This means that the system wants to result in a level playing field for all digital creators.

c. An efficient infrastructure

TRON network aims to provide an improved infrastructure that allows a distributed digital assets exchange, decentralised finance (DeFi), and market forecasting. On the platform, an instruction set and a stack-based virtual machine are used.

How does TRON work?

TRON is a blockchain-based operating system that wants to ensure the daily use of blockchain technology and a proper infrastructure to support it. The project itself is explained as a decentralised digital platform focused on content sharing and entertainment.  

TRON has divided its main objective into six stages. These include delivering simple distributed file sharing, enhancing content creation through monetary rewards, allowing creators of digital content to launch their very own tokens, and decentralising the gaming industry. 

TRON's architecture

The TRON ecosystem adopted a 3-layer architecture divided into Storage Layer, Core Layer and Application Layer. These three levels ensure smooth function of the TRON network. Let’s examine them briefly. 

1. Storage Layer

TRON designed a unique distributed storage protocol that consists of Block Storage and State Storage. 

As the name suggests, this layer serves to securely store network data, blockchain state and history data. In other words, it stores all kinds of data from the TRON ecosystem. 

2. Core Layer

Various instructions are processed within the Core Layer. Instructions can be written only in two programming languages – Java and Solidity. Solidity was chosen as the smart contract language, followed by potential future support of other advanced languages. 

The Core Layer computes instructions, processes them, and sends them to the TRON Virtual Machine where all the magic happens. Therefore, the second layer performs fundamental tasks for the blockchain such as validating transactions, managing accounts, and reading smart contracts.

3. Application Layer

The Application Layer is used by developers to create a diverse range of Dapps and customised wallets on TRON.

Delegated Proof-of-Stake.

TRON’s main protection tool and one of its special features is a delegated Proof-of-Stake (dPoS) system. It presents an alternative to the Proof-of-Stake (PoS) and Proof-of-Work (PoW) consensus algorithms. 

When you think of the word consensus, you probably imagine a set of objectives determined after reaching an agreement between different participants. Proof-of-Work and Proof-of-Stake are both consensus protocols employed by the Bitcoin network.  

While Proof-of-Work presents the process of producing cryptographic hash by decentralised ledger networks, Proof-of-Stake doesn’t run on complex hash functions, yet the validation of new blocks on the blockchain is done by randomly selecting validators who stake their resources. 

These terms sound technical and complicated to you? Check out some basics: ‘Ultimate guide to crypto consensus mechanisms’. 

In TRON’s dPoS, transactions are validated by 27 super representatives that are entrusted to maintain the transaction history. Super representatives are chosen every six hours, and they earn TRX coins generated by the mechanism as a reward.

This mechanism presents a competitive advantage for the TRON ecosystem because it amounts to the network being faster and more energy-efficient. TRON manages to process more transactions at once when compared to Proof-of-Work systems. 

What is the TRX token?

TRX stands for Tronix, which is the official cryptocurrency of TRON. The TRX cryptocurrency is used as the foundation currency on the TRON blockchain and represents the basic unit of accounts on the TRON blockchain. 

The value of other tokens derives from that of TRX. TRX connects the whole TRON ecosystem, including abundant application scenarios that power transactions and applications on the blockchain. 

TRX tokens are mainly used for transaction fees on the network and can be staked in order to receive network rewards. The token is also used for governance, with TRX holders able to vote on decisions about the network. Unlike mining-based currencies, TRX was issued at TRON's launch.

TRX includes several use cases, often referred to as ‘Application Scenarios’. These scenarios include, for example, credit card payments, receiving airdrops, receiving rewards, obtaining energy and bandwidth, and purchasing items from WeChat stores. 

How many TRX tokens are in circulation?

TRON has a total supply of over 100 billion tokens. Currently, around 71.6 billion TRX are in circulation. 

During the Initial Coin Offering (ICO) back in 2017, approximately 15 billion TRX was allocated to private investors, while an additional 40 billion were reserved for Initial Coin Offering participants. The TRON Foundation took 34 million, and another company owned by TRON CEO Justin Sun got 10 billion. 

This simply means that 45% of TRX supply went to the founder and the crypto project itself, while 55% was distributed among investors. 

If you are not familiar with the term 'Initial Coin Offering (ICO)', why not read this article: 'How to earn crypto: ICOs & early-stage investment'.

Staking TRX

Staking is known to include a couple of vital purposes. For example, it enables users to earn passive income. As for the network, staking keeps a network safe. If you are interested in learning more about staking, take a look at this article: ‘How to earn crypto: What is Staking? Earning Rewards and Minimising Risks of Staking’. 

In the TRON ecosystem, users stake their TRX at a 1:1 ratio. The more tokens they stake, the more TRON power they can earn. TRON power is an important feature within the TRON network because it is what the community uses to vote for Super Representatives. 

TRON controversy

Despite being the 17th largest cryptocurrency by market cap, the token has had its fair share of scandals. One major area of concern that plagued this crypto project is linked to the assumption that much of its blockchain protocols appear to come from other platforms. 

In other words, there have been accusations of plagiarism and a critical flaw in its blockchain protocol.

For example, TRON uses multiple protocols from other platforms such as Bitswap, PoRep and PoSt, but it failed to list them as references in the project’s whitepaper. Lacking such references led a part of the community to speak up against TRON. 

In response to these allegations, the project’s CEO Justin Sun stated that such a confusion arose from bad translations since the whitepaper was originally written in Chinese. Despite this claim, others in the crypto community highlighted these issues in the Chinese version of the document as well.