What is TRON (TRX) and How Does it Work? | KuCoin Crypto Gem Observer

2022/06/22 10:13:01

Since the launch of Bitcoin and blockchain technology in 2009, the traditional financial sector has undergone significant changes. Basing its strength on the shortcomings of the legacy financial system, which resulted in the Great Recession between 2007 and 2008, blockchain technology offers a transparent and immutable universal ledger.

Bitcoin’s blockchain secures transactions securely through a Proof-of-Work (PoW) consensus model. However, in 2013, Ethereum proposed a system that would employ smart contracts and a Turing-complete Ethereum Virtual Machine (EVM) to let developers interact with the PoW blockchain.

Ethereum’s proposal unlocked new possibilities in blockchain technology, allowing developers to create decentralized apps (dApps). However, despite achieving this feat, the Ethereum and Bitcoin networks still faced scalability issues and high costs, making them unsuitable for everyday transactions.

Hoping to address these issues, TRON started the development of a protocol that would completely decentralize the web in 2017 and rolled out its mainnet in May 2018.

What is TRON?

TRON is one of the largest blockchain-based operating systems. With a mission to decentralize the web, the network features high transaction throughput, scalability, and availability for dApps. The TRON protocol leverages architecture comprising storage, core, and application layers.

Moreover, TRON adheres to Google Protocol Buffers (Google Protobuf), a language-neutral, platform-neutral, and extensible way of serializing structured data. By tapping Google Protobuf, TRON enables the creation of programs that communicate with each other over a network. Google Protobuf is also vital in data storage.

TRON integrated Google Protobuf because it is smaller, faster, and simpler than other automated mechanisms for serializing structured data. For comparison purposes, Google Protobuf is three to 10 times smaller and 20 to 100 times faster than XML.

How Does TRON Work?

TRON leverages Solidity as its smart contract language. TRON chose Solidity because it is compatible with Ethereum. Additionally, the language enables the seamless creation and maintenance of dApps.

The TRON Virtual Machine (TVM), a lightweight Turing-complete virtual machine, offers an easy connection to the existing Solidity smart contract development ecosystem. As such, TVM offers millions of developers across the globe access to a custom-built blockchain ecosystem, which is efficient, convenient, stable, secure, and scalable.

To attain high scalability and high transaction throughput, TRON leverages a Delegated Proof of Stake (DPoS) consensus mechanism. DPoS allows token holders to vote for delegates (Super Representatives/SRs). The voting power increases with the number of tokens.

In TRON, only the top-27 SRs can produce blocks. SRs compete against one another to get votes and generate blocks. TRON produces one block in approximately three seconds, and each block awards SRs 32 TRX. TRX is the native token of the TRON network.

The TRON ecosystem also supports decentralized exchanges (DEXes) for seamless token transactions. TRON does not charge fees for most transactions. Transactions use bandwidth points, which are limited to 5,000 per day. After depleting these points, the system will automatically deduct the transaction cost in TRX from the sender’s account.

TRON leverages Transaction as Proof of Stake (TaPoS) to ensure all transactions confirm the main blockchain. TaPoS also secures the network by preventing the creation of counterfeit chains.

Who Created TRON?

H.E Justin Sun, an ambassador and Permanent Representative of Grenada to the World Trade Organization (WTO), is the founder and CEO of the TRON Network. Sun is also a Chinese-Grenadian diplomat, entrepreneur, and business executive. He also became the CEO of BitTorrent after TRON acquired the company in 2018.

What is the TRX Token Used For?

As aforementioned, TRX is the native token of the TRON ecosystem. TRX holders can use their holdings to apply to become one of the top 27 SRs. When applying to become SRs, TRON users must have at least 9,999 TRX in their accounts. The system burns these tokens before allowing users to become SRs.

The top-27 SRs get rewarded in TRX for producing blocks. Users uninterested in becoming SRs can freeze their TRX to increase their voting power. After unfreezing their tokens, users lose their voting power and cannot vote again until they freeze more TRX. TRON also uses TRX to reward voting.

Closing Thoughts

TRON solves the blockchain trilemma by functioning as a highly scalable, decentralized, and secure network. The network’s capability to handle up to 2,000 transactions per second makes it ideal for daily transactions. Thus far, TRON has processed over 3.21 billion transactions. Additionally, The number of TRON accounts recently surpassed 93 million, proving the protocol has the potential to decentralize the web.