Theta, decentralized streaming
Hermetic Science: Breaking Down Crypto Projects.
The aim of this study series is to demystify cryptocurrency from what appears to be magic internet money into more simply a type of currency that uses distributed ledgers. What those ledgers enable users to do with cryptography (the science of hiding information) is the real magic.
*Disclaimer** This information should not be construed as financial advice, nor should you treat it as a substitute for the services of a certified financial advisor.
I. Crypto Summary
Theta is a streaming platform that aims to disrupt the standard streaming model. Backed by the THETA token which will reward users for being part of its network, theta wants to position itself as an alternative to streaming heavyweights like Twitch or YouTube.
Created in 2017 by Theta Labs, Theta Network is positioning itself as the premier video broadcasting network using blockchain technology. Theta offers an alternative revenue stream by allowing users to simultaneously watch video content and earn tokens for broadcasting the video to other users. The Theta Network ecosystem functions as a sharing economy where users can supply their bandwidth and computing resources to keep the network running like clockwork.
THETA is currently listed on more than 15 exchanges, the most notable of which are Binance, OKEx and Huobi. The easiest way to purchase THETA is to go through the Binance exchange because of the high liquidity of its markets.
II. Commercial Application
Designed for video streaming, Theta Network enables users to benefit from an off-chain micropayment pool. Off-chain transactions simply deal with values that are outside the blockchain as opposed to on-chain transactions, and can be completed using a range of methods. For example, a user can create a pool that includes TFUEL(means of payment for transactions) tokens, and other users can use it to make transactions, such as donations to streamers. By replacing on-chain transactions, this mechanism not only eases transaction speed and anonymity but also improves the scalability of the Theta blockchain, as micropayments are managed by another entity.
Many in the industry do not view Theta as a direct competitor to other video streaming sites, but instead as a way to improve the clogged up plumbing behind the system, lowering the heavy cost of streaming.
“Theta’s innovation is set to disrupt today’s online video industry much in the same way that the YouTube platform did to traditional video back in 2005,” said Steve Chen, co-founder of YouTube and advisor to Theta. “One of our biggest challenges had been the high costs of delivering video to various parts of the world, and this problem is only getting bigger with HD, 4K and higher quality video streams.”
III. Team
According to the official web site Theta Labs is made up of 21 team members, with two principal founders.
At the head of the table sits Theta CEO Mitch Liu. Mitch is well versed in both media and entertainment, dating back to his undergrad research at the MIT Media Lab. He later cofounded Gameview Studios, which was acquired by Japanese gaming company DeNA.
CTO and co-founder of Theta Labs, Jieyi Long also co-founded Theta.tv. He has developed many patented technologies, which cover VR live streaming and instant replay for video games.
Theta Labs and Theta Network have entered into several high profile partnerships. There are of course validator nodes such as Binance, Google, Blockchain.com, and Samsung that are on board. Other key partnerships that Theta Network are involved with include:
- Chainlink : Decentralized Price Oracles Network Helps Theta Network Fight Against Fraudulent Video Ads.
- Samsung VR : Users can use Theta Network’s block explorer to seamlessly observe how video relay matches transactions.
- Lionsgate : the entire film catalog of this production studio is integrated into Theta Network.
- Ultra : this video game distribution platform natively integrates Theta Network into its ecosystem.
IV. Potential
Theta’s potential is substantial when you consider that their model has the potential to upend the way major platforms (YouTube/Netflix) think about their revenue models. They would have to pivot away from relying on advertisers or limited content subscriptions which content creators currently rely on for profit. Theta could establish itself as a new standard for decentralized content delivery that would attract many potential users frustrated with the old model.
With the recent surge in metaverses and gaming, Theta could be central to powering them through their technology stack. Their user base are a perfect fit for P2P video and data delivery and demonstrate the need for Theta protocol. Metaverses are where much the future of gaming and entertainment are headed, and as such are a crucial market for the growth of the Theta ecosystem as well. There isn’t a 1:1 ratio between gaming and video streaming but with more than 3.2 billion gamers across the globe, it stands to reason that if Theta can leverage itself as a leading platform for gaming streaming would be a major boon for the cryptocurrency.
V. Risks
Like any crypto project there are some issues to consider before investing. In the Theta network one of the major drawbacks is that of low liquidity. There isn’t much $THETA liquidity on cryptocurrency exchanges with 30 % of trading taking place between THETA/USDT pair on Binance. Which leads to a high level of centralization of THETA tokens.
A problem that comes up with THETA aside from token centralization is the uncertainty of how much influence early investors will have. They could have great influence should they decide to cash out on the price of THETA token and harm potential growth.
There are other platforms that operate in the blockchain based video streaming sector called VideoCoin Network and LBRY. As well as traditional more centralized systems such as Youtube and Twitch should also be considered should they move over to a more decentralized content delivery model.
VI. Conclusion
Theta provides fresh solutions to the current issues that plague video streaming. Its peer-to-peer network, incentivized and powered by the blockchain, is exciting and comes with massive potential. The real challenge for Theta is maintaining the high quality of the platform . Corporations and network users will be anxious to see if the Theta network can continue to scale and still maintain it’s level of reliability.
Having an experienced team that has already been able to forge partnerships with giants in the likes of Google, Binance, Samsung and Blockchain.com prove that what Theta Network has to offer is very promising for video streaming.
To learn more about Hermetic Network:
