The Tron Blockchain and its TRX Coin

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Written by

two_sats

I am just some bored guy that likes crypto

2 years ago

Topics: Crypto, Cryptocurrency, Tron, Trx, Blockchain, ...

*obligatory not financial advice*

What is Tron?

Tron is a smart contract blockchain like Ethereum but it uses proof of stake and is able to handle more than 1,000 transactions per second. It launched in early 2018 and has survived multiple bear markets without falling out of the top 100 coins. Tron is rather centralized but many other such chains like Binance Smart Chain and Solana had a massive pump this bull cycle thanks to Ethereum’s low speed and high cost yet Tron barely moved in comparison despite being around for longer.

Tron can be used for DeFi and there are plenty of DeFi dApps, but the main focus of the blockchain is entertainment and sharing content. In 2018 the Tron Foundation purchased BitTorrent, which is a file sharing service that is slowly becoming more decentralized and utilizing its BTT token on Tron. There are also countless of games, multiple DEXes, lending protocols and stablecoins running on Tron.

Tron uses a delegated proof of stake consensus which means that TRX holders can delegate their coins to a validator to earn block rewards. There are only 27 "super representatives" that are elected by TRX holders and are responsible for validating transactions and producing new blocks. 27 is a really small number of validators which is why Tron is kinda centralized.

The blockchain was founded by Justin Sun, who is notorious for his borderline scamish marketing of Tron that resulted in many such memes like below. Justin Sun was accused of plagiarising the Ethereum whitepaper, but he claims that the translators he hired for the original Tron whitepaper were lazy and just copied the ETH paper without his knowledge.

The TRX Coin

Tronix or TRX is the native cryptocurrency of Tron. It is used to pay for network fees and for staking to validate transactions. It also gives its holders governance rights and lets them choose the 27 super representatives.

Every 24 hours holders of TRX receive free "bandwidth" that they can use for free transactions instead of paying with their coins, they can also freeze their coins to receive additional bandwidth. If you don't have enough bandwidth and don't want to wait to get any you can also pay with TRX directly, the fees paid that way are burned.

There is no supply cap and every year the supply of TRX increases with a yearly inflation rate of currently 0.16%. At the launch of the blockchain there was a genesis supply of 100 billion. 56% of that supply was sold to private investors and ICO participants, the remaining 44% went to the Tron Foundation and Peiwo Huanle Technology Co, a company owned by Justin Sun, and they both plan to use the coins for further development.

The value of TRX obviously depends on how many dApps run on Tron, how many users it has and how much value is in its smart contracts. The blockchain is relatively fast and it’s cheap to use, unlike Ethereum that is still waiting for ETH2.0. Other coins that are more scalable already had a decent pump so it could happen to TRX too. However, the project is very centralized, there are only 27 validators and since the developers own almost half of the initial supply the votes of the other holders barely matter. Also, while cryptocurrencies are country agnostic, the Tron Foundation is still located in China which is very anti crypto.

The best place to buy TRX is Binance and the best wallet to hold it is TronLink that is available as a browser extension and for smart phones with a dApp explorer.