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What is Tron (TRX)?
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What is Tron (TRX)?

Tron (TRX), launched in 2017, aims to revolutionize the internet through blockchain. Led by Justin Sun, Tron focuses on decentralized apps (dApps) and smart contracts, operating on its own blockchain where TRX serves as the native cryptocurrency for transactions and governance.

Launched during the height of the 2017 crypto mania, Tron has since captured the attention of a global community of investors and developers with its ambitious vision of how cryptocurrencies could transform the internet.

While many projects aimed to use blockchains to create a distributed web, Tron set itself apart with its compelling communications, despite ongoing criticisms of its technology.

Unlike many cryptocurrencies launched in 2017, Tron did not claim any groundbreaking advancements in cryptography or network design. Instead, it built on existing technologies like decentralized applications, smart contracts, tokens, and delegated proof-of-stake consensus, many of which were pioneered by earlier projects.

Tron even designed some of its components to be compatible with Ethereum (ETH), sparking debates about how much it borrowed from its predecessors.

Tron further distinguished itself with an Asia-focused market strategy, emphasizing its charismatic creator, Justin Sun, and translating its technical documents into more languages than most cryptocurrency projects. This approach helped Tron build a strong following across diverse linguistic communities.

In 2018, Tron gained significant mainstream attention when the Tron Foundation, the non-profit behind its development, acquired BitTorrent, a pioneer in peer-to-peer networking. This acquisition set the stage for the launch of a BitTorrent token on the Tron blockchain in 2019, allowing Tron to introduce a new cryptocurrency to millions of BitTorrent users.

How Does it Work?

Initially launched as a token on the Ethereum platform, Tron made a significant move in 2018 by migrating to its own network. This transition involved investors exchanging their Ethereum tokens for Tron's TRX cryptocurrency, with the original Ethereum tokens being subsequently destroyed.

General Architecture

Tron employs an account-based model similar to Ethereum (ETH). This means that the cryptographic keys issued by Tron’s protocol control access to both TRX and TRX token balances.

The Tron blockchain processes data exchange through three distinct layers:

Core Layer: This layer handles the execution of instructions written in Java or Solidity (a language initially designed for Ethereum). These instructions are then sent to the Tron Virtual Machine, which executes the necessary logic.

Application Layer: Developers use this layer to create wallets and applications that are powered by TRX cryptocurrency and are compatible with Tron's software. This is where the practical applications of Tron come to life, enabling various functionalities and services.

Storage Layer: This layer is designed to manage blockchain data by segmenting it into two parts:

  1. Blockchain Data: This records the complete history of the blockchain.

  2. State Data: This preserves the status of smart contracts, ensuring they operate correctly and maintain their intended functions.

Proof-of-Stake

Tron achieves consensus on its ledger through a system known as Delegated Proof-of-Stake (DPoS). In this system, a rotating group of 27 "super representatives" are tasked with validating transactions and maintaining the system's history.

Super Representatives

  • Selection Process: Super representatives are elected every six hours. Once selected, they gain the ability to validate transactions and collect new TRX generated by the protocol.

  • Rewards: Blocks are added to the blockchain every three seconds. Super representatives who produce valid blocks receive 32 TRX as a reward. Annually, the network awards a total of 336,384,000 TRX to these representatives.

Node Types

In addition to super representatives, the Tron blockchain supports three types of nodes:

  • Witness Nodes: These nodes propose new blocks and vote on protocol decisions.

  • Full Nodes: They broadcast transactions and blocks across the network.

  • Solidity Nodes: These nodes synchronize blocks from full nodes and provide APIs for accessing blockchain data.

By dividing responsibilities among different types of nodes and using super representatives to validate transactions, Tron ensures a secure and efficient consensus mechanism.

Staking TRX

To participate in the voting process for super representatives on the Tron network, users need a resource called "Tron Power."

Here is how it works:

Earning Tron Power: Users receive 1 Tron Power for every 1 TRX they choose to lock in an account. This means the TRX is held in a way that prevents it from being spent.

Voting Rights: While the TRX is locked, users can use their Tron Power to vote on super representatives. Once the TRX is unfrozen, users lose their Tron Power and their voting ability.

Non-Transferable: Tron Power cannot be traded like TRX or other tokens on the Tron blockchain.

This process is similar to staking on other blockchains like Tezos or Cosmos, where users lock up funds to earn rewards. However, it’s important to note that this might not be possible through custodial exchanges such as Kraken, Binance, or HTX.

By staking TRX, you not only contribute to the network's security and governance but also have a say in who validates transactions and maintains the blockchain.

Reasons to Use TRX

If you're planning to use any applications on the Tron network, you'll need Tronix (TRX). This cryptocurrency is essential for accessing the full range of services and games built on Tron.

Reasons to Hold TRX

Accessing Tron-Based Services: To use any Tron-based application, whether it's a game or a service, you must have TRX. It’s the currency that powers transactions within the Tron ecosystem.

Participating in Network Governance: TRX ownership is crucial if you want to take part in Tron’s consensus mechanism. By holding TRX, you can stake your coins, earn Tron Power, and vote on key decisions affecting the network.

Investment Opportunities:

  • Support for Blockchain Innovations: Tron’s platform allows users to create custom applications and tokens. If you believe in the future potential of these innovations, TRX could be a strategic addition to your investment portfolio.

  • Earning Passive Income: Staking TRX not only supports network security but also lets you earn rewards. This can be an attractive feature for investors looking to generate passive income, thus balancing the risk of holding TRX.

Overall, whether you’re looking to use Tron’s dApps, participate in its governance, or explore its investment potential, TRX is an essential asset that provides various advantages in the blockchain space.

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