Why We’re Introducing the Theta Token & Blockchain to Revolutionize Video Delivery
I remember a particular commercial from the 1990’s when the Web was young, and video over the internet was a thing of the near future. In this commercial, a traveler pulls up to a lonely, dusty motel in the middle of the desert and goes up to the front desk.
The traveler asks the young woman chewing gum at the front desk if they have HBO or any movies on demand? The bored front desk attendant pops her bubble gum and responds nonchalantly: “We have every movie and TV show ever made, available at any time.”
I don’t even remember whose commercial it was (I think it was a telecom company), but most of us who were around at the dawn of the web wondered: is that even possible?
It’s taken many years and lots of infrastructure for that promise to be realized: CDNs (content delivery networks), video compression formats, and most importantly, streaming servers and protocols, etc.
Today, two-thirds of all internet traffic is video, and a large part of that is from video streaming. If we look at the majority of Internet traffic, the Web as we know it today is really a giant video network with some very big “mega-content” nodes doing most of the delivery. It resembles more of an oligarchy than a democratic model.
Video Content Drives Video Costs and Data
The video content being delivered started with small videos on sites like YouTube but really reached its peak recently with the popularity of esports streaming (live and on-demand competitive video games) via sites like Twitch, social media, and via on-demand entertainment apps like Netflix and Hulu, which stream full movies and TV shows.
This combination of live streaming and on-demand video content has taxed the Internet infrastructure that wasn’t built for a video ready world, both in terms of data and costs/business models. This problem is only getting more acute with time. According to Cisco, video traffic is expected to increase to 80% of all internet traffic in the next few years!
Not only are we using infrastructure that is 20-years old for serving video, modern CDN’s are also using outdated “pay per storage” and “pay per bandwidth” models, making content delivery very expensive. Most consumers haven’t been willing to pay for this infrastructure (watching YouTube and Twitch are free while Netflix only charges a few dollars per month). For many entertainment and gaming companies, infrastructure can be upwards of 30%-50% of all operating expenses!
At SLIVER.tv we’ve been smack dead in the center of this need for better video streaming infrastructure. With our virtual reality solution for esports, we partnered with tournament operators like ESL, Dreamhack, Turner E-League, and others to stream esports tournaments live in spherical 360° video to VR headsets, mobile apps and desktop web.
This new format of content, VR and 360°, is even more bandwidth intensive than regular 2D video streams, at times in the order of 10x-20x more.
Moreover, we found that video content today must be delivered globally and the existing centralized model falls short in many developing areas of the world. In esports, for example, places like Brazil, Poland and eastern Europe are actually very active locations of esports fans. The CDNs that are US-based don’t have great point-of-presence in these locations, and some viewers in remote areas of these countries are not very well served.
What if, we wondered, some of our users, who had high end gaming PC’s and good bandwidth, could relay our video streams to friends and other viewers in their neighborhood?
Introducing a Decentralized Video Network: Theta
This question, combined with the rising popularity of blockchain and cryptocurrency, led us to launch the Theta coin and network.
We realized that this idea, of having someone in a remote location using their spare resources and bandwidth to “cache” and “relay” video streams, could revolutionize the internet delivery of esports, entertainment and many other industries. In fact, it could revolutionize the delivery of all kinds of content!
In the Theta network, distributed nodes can earn Theta tokens by becoming “caching” servers. End users can watch these streams being delivered to them by “caching” nodes that are nearby. But more than just a delivery network, any streamer can get on the network and upload their streams for all to watch by leveraging other users which serve as “ingest nodes”, which will automatically convert them into the right formats (different resolutions, bit-rates, etc) and deliver them to the caching nodes.
More than just live streaming, the same infrastructure could revolutionize the entertainment industry. A “network” on TV, like CBS or Fox, is just an aggregator and broadcaster of content. In fact, you might think of the TV networks as centralized nodes which send content to distributed super nodes (local TV channels affiliated with the network), who then send it the last mile via local broadcast over the air. Later, this top down model evolved to satellite and cable providers, who then sent the last mile via a physical cable. As the internet has come on-line, these old networks are just starting to adapt to the new world.
A decentralized network with no single owner would allow anyone to upload their content. Theta tokens, which will be mined by the network in a new blockchain, will be the currency to allow users to “reward” streamers and content creators directly. This method of gifting virtual currency or goods to streamers has already become popular in China.
A decentralized network like Theta has the possibility of cutting out the middlemen — for example, advertisers could use Theta tokens to directly reward content creators and streamers, and potentially viewers for engaging with their content. Even networks like HBO and Netflix and YouTube red, which are subscription networks, could be replaced with completely distributed content where anyone can set the price of their content. This is a “grassroots” approach to creating content and democratically allowing the benefits of that content to accrue to content creators and those who share in the infrastructure costs.
All of these led to the idea that our Theta project could be a new blockchain which could have a dramatic impact on how content is produced and distributed. In addition to the infrastructure, there would need to be Dapps (or decentralized apps) to serve the different markets: esports, entertainment, distance learning, peer-to-peer streaming, corporate video conferencing, etc. SLIVER.tv and our partners are uniquely positioned to build the eSports Dapps. There are many other developers who can use our open-source protocol to build new industry and vertical Dapps.
Our Unique Two Phase Rollout: ERC-20 tokens and Native Blockchain tokens
While the technical details of the network are in our white paper, it will take time 9–12 months to build out the native theta blockchain and release Dapps on top of it.
In the meantime, we wanted to make sure that participants in the Theta token offering could use our tokens right away. For that reason, we are releasing an ERC-20 token right away (“Phase I”, starting January 8) that can be used on the SLIVER.tv esports site and will soon be available on other sites. The tokens can be used as virtual gifts to streamers, to purchase virtual items, and as a virtual engagement incentive on the site in exchange for our users attention.
The second phase will be in Q4 2018, when we roll out the new blockchain. This is a separate blockchain much like the Bitcoin, Ethereum or Filecoin. At that point, the ERC-20 tokens can all be exchanged for native Theta tokens on the new blockchain.
We believe this two phase approach achieves the best of both worlds — a unique new technology for blockchain, and immediate utility for token purchasers.
Summary: Why We’re Doing It
Thus far, video content which accounts for two thirds of all Internet traffic, has been primarily aggregated by several sites, and the infrastructure costs have benefited the CDN industry.
With the launch of Theta, we at SLIVER.tv think that we can democratize the process of creation, distribution, advertising, and viewing of video content with our new decentralized model. This is a different way to think about both the economics and the infrastructure that will power the next phase of the Internet.
As video content surpasses 80% of all video traffic in the next few years, we believe Theta network is a way to make sure that the future of video belongs to us all!