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Cryptocurrency News Articles
Tron (TRX): The Surprisingly Successful Blockchain
Sep 18, 2024 at 06:32 pm
Tron (TRX) is a moderately known, yet surprisingly successful blockchain. It is primarily known for its eccentric founder and a major stablecoin, but there is more to discuss. Let’s take a thorough look at the cryptocurrency.
Tron (TRX) is a cryptocurrency that has been steadily gaining value against Bitcoin (BTC) over the past few years. If Tron is known at all, it is mostly as the blockchain on which the majority of Tether (USDT) transactions occur. This remains the most important, but not the only application of Tron.
In this article, we will delve into the history of Tron, describe the technology and its successes, but also not shy away from criticism.
From ICO to One of the Most Used Blockchains
The history of Tron began in late 2017 with an initial coin offering (ICO) on Ethereum (ETH). The TRON Foundation, founded in Singapore, sold Tronix tokens (TRX) for approximately $77 million and promised to create a „universal credit platform for global entertainment networks.“
Behind Tron, then and now, is Justin Sun, who was already a well-known figure. Born in 1990, the Chinese entrepreneur had worked at Ripple since 2013 and founded a chat app in China. Forbes China listed him in their „30 under 30“ in 2015.
Tron faced criticism almost immediately after the ICO. The whitepaper used to raise funds allegedly contained plagiarized sections from the whitepaper of the Interplanetary File System without citations. Further accusations of plagiarism soon followed, and developers from the EthereumJ client, which Tron had forked, complained about license violations.
Nonetheless, Tron evolved into one of the most used blockchains. The website now claims 257 million accounts, nearly 8.5 billion transactions, and $13.778 billion in transfers. Those who invested in the ICO have seen returns nearly 80 times their initial investment.
Adopting What Is Available
Let’s start with the technology. We describe it based on the Whitepaper 2.0, which reflects the current state.
Initially, Tron invented very little but freely borrowed from other blockchains. Essentially, Tron combined two elements that were publicly available and already well-proven during that time, 2017 and 2018.
First, Ethereum: Tron forked Ethereum and adopted the complete Ethereum Virtual Machine (EVM), the environment for executing smart contracts. A significant portion of the developer work behind Ethereum ended up on Tron for free, making it compatible with any smart contract on Ethereum. A „dApp“ on Ethereum can be moved to Tron with a few clicks, and upgrades or other developments can be integrated with relatively little effort.
However, Tron changed the consensus mechanism. This is the second component. Instead of using Proof of Work (which Ethereum used at the time), Tron is based on „Delegated Proof of Stake“ (DPoS). This is a consensus mechanism that was relatively popular at the time, used by blockchains like BitShares, Steem, and Lisk. DPoS means that anyone holding a token can elect delegates who are then allowed to validate blocks.
The number of validators (equivalent to miners) is deliberately kept small, specifically to 27, which benefits scalability. Thanks to the smaller number of validators, Tron can reduce the intervals between blocks to three seconds, without suffering from large latencies like other blockchains. At the same time, the election of delegates gives individual stakers at least some control. DPoS is considered a reasonable compromise between decentralization and scalability.
Apart from borrowing from other projects, Tron has also integrated various innovations of its own and from other sources, sometimes from the start, and sometimes over time.
Tron introduced a three-layer architecture consisting of the Storage Layer, Core Layer, and Application Layer. This modularization could simplify development and scale individual elements better. The blockchain, for instance, is stored in a LevelDB database like Bitcoin, while the state, equivalent to the UTXO set, is stored in a KhaosDB.
Later, Tron integrated native decentralized exchanges (DEX), using the rules of the Bancor protocol, a DAO on Ethereum, and created special accounts for tokens. Instead of being a dApp, the exchange of tokens is possible on the consensus level.
A unique feature of Tron is that it does not use „gas“ as a unit for fees like Ethereum, but two concepts: „Bandwidth Points“ and „Energy.“ Bandwidth Points are based on the size of a transaction, while Energy is based on the computational power a smart contract requires. Both can be acquired by freezing TRX tokens. According to my user experience, you always pay a fee in TRX, similar to other blockchains.
Lastly, Tron adopted the „Transaction as Proof of Stake“ (TaPoS) concept from EOS, another blockchain of the time. Each transaction must include the hash of the last block header. This prevents transactions from being broadcasted on forks and guards against various attacks, such as hard forks and double spends.
The technology of Tron is, admittedly, well-copied to form a scalable smart contract
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