If you’ve seen the Theta token shooting up the crypto charts, and have been wondering what Theta Network is and how it works, then this article is for you.
YouTube and other popular CDNs (Content Delivery Networks) have brought us many happy memories over the years, but belong very much to the mold of Web 2.0, where users are encouraged to upload their content, but don’t have control over how their data is used and monetized.
Blockchain technology is primarily about removing the middlemen from most of our daily transactions. In the world of videos and streaming, that means that the delivery and monetization of content will be negotiated directly between the creator and the viewer.
It’s finally time to have a CDN for the age of Web 3.0, and that’s where Theta Network comes in.
What is Theta Network?
Launched in 2019, Theta is a video streaming network that is primarily powered by its users, who share bandwidth and computational resources on a peer-to-peer basis.
The Theta blockchain is powered by a handful of enterprise validator nodes, responsible for validating transactions on the network, and 4000+ community-run guardian nodes that monitor the validators to ensure that they are upholding the integrity of the Theta network.
This combined consensus mechanism is called Multi-level Byzantine Fault Tolerance.
This mode of consensus aims to provide strong security alongside high transaction volume and speed, which is vital for a platform that wishes to deliver streaming services and micropayments, as there will be a huge quantity of low-value transactions happening on the network every day.
Theta’s open source code and decentralized node architecture should theoretically make the platform far more democratic and accessible for content creators, and far more secure for its viewers.
Which Projects and dApps are Building with Theta?
The Theta network is compatible with the powerful Ethereum Virtual Machine, which is a huge global network of computers that pool their computational power.
One benefit of this is that developers and programmers can, in turn, build on top of the Theta network using Ethereum’s Solidity coding language, among many others.
Smart contracts on Theta will encourage more building and growth of the network, and will also help processes like royalty distribution for content creators to become fairer and more transparent.
The first decentralized application built on Theta was Sliver.tv, a decentralized game and sports streaming platform used by millions of viewers each month. The largest part of this audience are watching gamers livestream their gaming experiences, which may sound boring to some, but is a huge, growing market, as can be attested by the popularity of Youtubers such as PewDiePie, who has 110 million subscribers.
The Theta team is further extending the platform’s streaming services with ThetaDrop, an online marketplace for digital collectibles and non-fungible tokens (NFTs).
The key innovation of ThetaDrop is the focus on livestreaming NFT auctions in order to increase creator-fan engagement and develop more immersive and creative ways to conduct online auctions.
What Problem is the Theta Network Trying to Solve?
As a global population, we watch over 1 billion hours of video per day on YouTube alone. Creating and sharing videos and memes has become one of the main social zeitgeists, but it isn’t always easy to be a YouTube content creator.
New creators who don’t pay for extra exposure risk being ignored by the site’s famously picky algorithm. Even successful, well-known YouTubers complain about the pressure of having to produce content every day in order to avoid falling down the rankings.
YouTube still exhibits all the hallmarks of the Web 2.0 model, charging creators a 45/55% split for video royalty fees, and wielding the power to close down channels that creators may have spent years building up, often as a result of erroneous or debatable copyright claims.
CDNs in general also suffer from loading and re-buffering issues, especially in areas of the world with poorer internet access and WiFi speeds. This issue is compounded by the rise of inner-city viewers demanding high-quality streams in 4k or 8k definition, which creates a bottleneck effect on the network.
Theta’s core aim is to solve these issues by creating a more robust and efficient network that distributes higher revenues to content creators, rewards viewers, and takes advantage of a global network of decentralized nodes to deliver a smoother and faster streaming experience for everyone.
The team was recently awarded with a U.S patent for their Peer Discovery technology, which uses advanced algorithms to enhance the connectivity of the Theta peer-to-peer video delivery product. The product ensures that viewers are not merely connected to their nearest online peer to aid with bandwidth, but they are connected to the peer who offers the best combination of network condition and connectivity--a more effective and intelligent solution.
What’s the Difference between THETA Token and TFUEL?
Theta network uses two tokens - the THETA coin and TFUEL.
Holders of the THETA token can take part in governance by staking THETA, and either contributing to or running their own node. For this, they are rewarded with more THETA tokens.
If the Theta network grows to be as large as YouTube, proper on-chain community governance will become extremely important, in order to avoid the lack of transparency exhibited by social media platforms such as Facebook.
Shortly after launch, the Theta team realized that they also needed a highly liquid token that could facilitate millions of transactions and micropayments each day, and that’s why Theta Fuel, or TFUEL, was created.
As well as being used to reward viewers who share their extra bandwidth, advertisers can use TFUEL tokens to reward engagement from viewers.
Users who receive TFUEL can then spend their TFUEL coins for accessing paid streams, rewarding their favorite content creators, or launching smart contracts on the Theta network.
In this way, TFUEL is similar to the GAS token on the NEO blockchain, or the BAT token on the Brave Decentralized Browser.
The good news for Exodus users is that THETA and TFUEL can be stored safely in the Exodus multi-coin wallet, which gives users complete control over their private keys.
A Bright Future for Theta Network?
Theta is collaborating quite closely with Samsung VR, to bring immersive, virtual reality gaming experiences to the world, and to bring Theta’s rewards-for-sharing-bandwidth solution across Samsung’s range of VR products.
Samsung is also running one of the enterprise validator nodes on Theta, meaning that they have an active stake in the success of the Theta project, as a minimum of 10,000,000 THETA need to be staked in order to become a validator.
As a Theta backer, Samsung is in good company, with other enterprise validators including Sony, Binance and Google, and the Theta team also has some hugely influential figures on the advisory board, the most pertinent of which being Steve Chen, the co-founder of YouTube, and Justin Kan, the co-founder of Twitch.
A further partnership has been made with LINE, one of the most popular messaging apps in East Asia, with over 167 million monthly active users. LINE users will be incentivised to use the Theta.tv streaming app, opening up the Theta platform and TFUEL tokens to an even wider audience.
It’s clear that Theta has plenty of friends in high places across the world of tech, and the platform is already fit for millions of monthly users. If the project can continue with its current rate of development, Theta could become a major player in the world of video streaming, online auctions and virtual reality, with the virtual reality market alone predicted to be worth around 55 billion dollars by the year 2024.
Will a blockchain-based project finally be able to knock YouTube off its perch? Watch this space.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.