Tron — Everything you need to know.
Tron is a decentralized blockchain platform with a cryptocurrency called TRX. It is a relatively recent project, and has a smart contract system similar to that of Ethereum, but modeled more like a virtual operating system.
On this page you can find information about Tron from many points of view. We hope it will help you decide what to invest in, and help you understand this very special blockchain.
What makes TRX a cryptocurrency?
Tron is a blockchain that uses advanced cryptography to ensure the integrity of all transactions. TRX is the cryptocurrency that is transferred between Tron addresses in said transactions and, in addition to being the exchange currency for which the Tron network is designed, it is the currency that must be had and “frozen” (not lost) to get some resources that allow you to use the network, such as bandwidth or energy.
Tron is also a coin that is available on many cryptocurrency exchanges and investment platforms.
The history of Tron
The Tron project was founded in September 2017 by entrepreneur Justin Sun, just before China banned cryptocurrency ICOs ( initial coin offerings , a way of financing projects thanks to public investments of all kinds of amounts). Sun had previously held a senior position at Ripple, meaning he was no newbie to crypto and blockchain.
That initial coin offering raised $70 million, and Tron launched its network in June 2018, transitioning from an ERC-20 token on the Ethereum blockchain to its own blockchain.
Lack of initial transparency and accusations of plagiarism
The Tron white paper, the design document that defines the main functionalities that the blockchain would have, was accused of plagiarism. The project’s source code was also accused of plagiarism, in this case from EthereumJ, an implementation of Ethereum in the Java programming language.
Tron is done in Java too, and it seems that there were many parts of the code that were identical. Both projects are open source, and it’s legal for them to take inspiration from each other, or even copy the entire projects, but if you don’t credit the original project’s authors it’s still plagiarism even if it’s about open source.
On the other hand, Tron token development is more transparent than some big blockchain projects in that it has a detailed document with the project phases ( roadmap ) distributed over 10 years. In 2021 we are in the exciting stage “Great Voyage”.
Still in 2018, the Tron foundation acquired the company that manages the BitTorrent p2p file transfer protocol. These technologies are very similar to blockchains, being decentralized, so there is a good correlation between the technologies that are used and the philosophies that often motivate their use.
Justin Sun became the CEO of the company, which was also renamed to Rainberry, Inc.
The technology of Tron
The technological highlight of Tron is its platform for smart contracts and distributed applications (DApps). These DApps can be anything from a decentralized cryptocurrency exchanger to an online video game, micro-lending platforms and other transparent, automated and decentralized financial instruments.
The resources of the Tron distributed computing network
The TVM (Tron Virtual Machine) allows running programs on the Tron network in the form of smart contracts. Depending on what we want to do, the virtual machine will consider that we will consume one or more of the following resources:
- bandwidth _ _
- Computing (CPU)
- Storage _ _
Freezing an amount of TRX for a day gives you a quota of bandwidth and energy to use for that day. This does not consume your TRX, but you can move them once more at the end of the day. But if you keep them frozen every day you can make transfers and execute smart contracts.
This system of simply freezing TRX and getting to use the platform for virtually free (if your investment is of the right magnitude for the use you want to make of it) is very reminiscent of proof-of-stake algorithms, so let’s talk about how that Tron has to ensure consensus in the network.
Consensus by delegated proof-of-stake
Tron is a modern blockchain and is not mined, rather transactions are validated through a network of 27 validators called super representatives (SRs) that verify transactions and package them into blocks.
Accounts holding TRX can periodically vote on who they want to become SR, thus delegating proof of stake.
SRs can also propose things about the future of the technology, which are voted on by the SRs themselves and a secondary group called the SR partners.
This way of managing the project from within the same blockchain is another of Tron’s advances, since it opens the possibility that the original team does not have much to say about the future of the network, if there is a majority that thinks in a different way.
Tokens on Tron
The development of Tron blockchain offers support for tokens of various types, called TRC-20, TRC-10, and TRC-721. The technologies on offer cover the use cases for Ethereum tokens, both ERC-20 and NFT.
High scalability and large number of transactions per second
The virtual machine can scale a DApp so that it works for tens of thousands of users simultaneously, and the network can serve 2,000 transactions per second today. This last figure is orders of magnitude higher than the transactions offered by more majority block chains such as Bitcoin or Ethereum.
The healthy ecosystem of DApps on Tron
Tron was one of the first blockchains to go live with its distributed computing platform, and has been the choice of quite a few DApp developers who have gone on to populate the Tron virtual machine. This makes Tron have a lot of potential in terms of DeFi (distributed finance), both in exchanges and in other financial instruments such as micro-loans, etc.
The virtual machine is also compatible with the Ethereum one, so it is easy to migrate a DApp from the Ethereum blockchain, or from another of several that also offer this compatibility.
Basics: what is a blockchain?
A chain of blocks (also known as a blockchain ) is a kind of database or ledger used by most conventional cryptocurrencies to keep track of all the transactions and balances of their users (addresses).
It is called that because the transactions that are entrusted to the block chain in real time are left pending until a number of them are resolved at the same time (something similar to the atomic transactions of some traditional databases). Each time a number of transactions are resolved and the state of the network is updated, it is called a block. That is, transactions are made in blocks of several transactions every few seconds or minutes, depending on the speed of each block chain.
Basics: how do Tron addresses, accounts or wallets work?
Each Tron address can be thought of as a bank account. Each person can have any number of addresses, and these are generated easily and without considerable cost.
The address is a string of letters and numbers that we won’t be able to determine ourselves, and similar to a bank account, phone number, or email address, people can use your address to send you TRX (Tron’s cryptocurrency). ) or, if you are the one who transfers an amount to them, they will see your address as the sender.
Each address is generated along with a private key, which is similar to a password but, again, not decided by us (which surely helps make it a very secure key). Another difference with the passwords we have for service accounts offered by other companies is that Tron is not a company, and the network is decentralized. No one but us has access to our account or private key, and no one can help us recover our TRX if we lose our private key. The TRX will stay there until the end of time (or until someone guesses the private key, whichever comes first), but we won’t be able to transfer it to an exchanger to sell it, nor can we use it to pay for anything.
So it is very important to keep the private keys of our cryptocurrency addresses safe, so that no one but us has access to them, but if possible with some safe way to recover our address if something happens.
What we recommend is a physical wallet , if the amount you have invested in cryptocurrency is much higher than what the cheapest ones cost (around 50 USD).
Price evolution: how volatile is it?
Tron is a well-known currency with real use through distributed applications that run on top of its virtual machine. Its price reflects the movements of Bitcoin and the entire cryptocurrency market to some extent. But let’s go back to its beginnings after giving the warning that the unit prices of the coin are very low, but this is because there are so many TRX in circulation. The sum of all the currency has a very considerable value so, although 1 TRX does not have much value, the project itself does (billions of USD), so the amount of TRX that we buy will always be a part proportional to the total value of the project.
Tron was launched in September 2017 as an ERC-20 token on Ethereum as it did not have its own blockchain up and running yet. The token price in September, October and November 2017 ranged from 0.002 to 0.003 USD.
The bubble of early 2018
And right after those first few months of the ERC-20 token called TRX, the great bubble of 2018 occurred, which technically started in December 2017.
First there was in December a rally to $0.05. TRX hovered between 0.035 and 0.05 during the second half of December 2017, and in January 2018 the madness broke out.
Contrary to BTC and other large-cap coins, TRX saw its all-time high in January, not December. We believe they have to do with many people looking for alternative currencies to invest in to diversify their earnings from BTC.
The thing is, Tron rose as high as $0.22 on January 5, rising 500% (or multiplying by 6) in less than a week.
When BTC started to drop in the second half of January, TRX saw a much more severe correction in proportion, because its rise had been so much steeper.
TRX hovered between $0.03 and $0.05 until the end of April, when it joined one of BTC’s comebacks and almost hit $0.10 for an instant. Afterwards, it continued to decline little by little and ended the year 2018 at 0.02 USD.
This price is much lower than the absolute high, but it is also ten times higher than the price before this bubble started. So even though TRX spent most of the year going down, it wasn’t a bad year at all!
2019: an unexciting year for Tron
2019 was a slow year for almost all cryptocurrencies, but for Tron it was especially boring.
While coins like BTC rallied and almost doubled in value, TRX lost around 35% of its value between January 1st and December 31st.
2020: finally stable growth
Almost the entire year of 2020 meant slow but sure growth for most cryptocurrencies, and Tron was no exception. This year Tron did double in value, ending at about $0.027.
The meteoric rise of BTC in December, however, was not yet reflected in TRX.
A very benign year: 2021
The trend at the beginning of the year was still up, and just around February 10, when BTC saw its first major high, TRX was also very high for a few days: between 0.05 and 0.06 USD from February 10 to 21.
It quickly fell, but only to $0.044, and continued a less sudden rise to break above that February high of $0.06 a month later. And, once again, the madness came.
BTC had already been on a very high plateau for weeks, but Tron saw meteoric growth between March 30 ($0.066) and April 5 ($0.14), doubling a not inconsiderable value in less than a week, and 10 days later it reached $0.17 on April 15.
This has been Tron’s all-time high for this year so far, and after dipping like all coins in May, it has spent the following months going organically down and up between $0.05 and $0.08. Once again, prices are much higher than the previous year.
How much currency is in circulation?
There is a massive amount of TRX in circulation, which is why the market cap is so high ($5B) when the unit price is so low.
More than 71.6 billion TRX are in circulation, out of 100.85 billion that there may be. And the sum of all those TRX tokens is what gives us the market capitalization of five billion dollars.
Is Tron going to go up in price?
This is the question we ask ourselves. Of course, nobody knows what is going to happen because there are always many factors at play, such as:
- The price of Bitcoin (Tron is still an altcoin for many)
- global economy
- The new laws of the different countries
- The general public’s impression of cryptocurrencies and Tron in particular
- Growth in the real use of the potential of Tron technology, such as DeFi or NFTs
- Increased environmental awareness in the cryptocurrency community, leading to a greater appreciation of no-mining blockchain technologies
Taking into account the trajectory of recent years, the projections are very optimistic in the long term. But it is inevitable that there will be corrections and bumps in the road (Tron is not going to go up forever in the short term).
Tron is one of the largest blockchains in the world that is not mined, but rather its blocks are added based on an energy efficient algorithm that does not depend on mining or PC graphics cards. Your virtual machine is very convenient, and its resources are modeled in a very detailed and fair economy.
How important is it that a chain does not need to be mined? We believe this has a very significant impact, and we expect the Tron platform development to continue to grow in volume.
We cannot say that it is a good investment for everyone, but we like it better than most cryptocurrencies. We encourage you to learn more about this blockchain, and any form of investment in it, even buying TRX on an exchange, somehow funds the Tron network and makes it more likely that it will continue to be successful.