“I was very interested in making fun of it.”
That’s how crypto YouTuber Ben Armstrong, known around the web as “BitBoy,” described how he felt about Tron prior to its acquisition last summer of file-sharing platform BitTorrent.
Now, outside Day 2 of Tron’s niTROn Summit in San Francisco last Friday, BitBoy felt differently: Tron was worth paying attention to.
Sure, the company’s over-the-top marketing exploits (not to mention accusations from crypto luminaries such as Vitalik Buterin of plagiarizing others’ work) were an easy source of derision, BitBoy said. But the BitTorrent move had changed the calculus. It was a sentiment CoinDesk encountered more than once among attendees of the event.
When we spoke with Tron founder and CEO Justin Sun after his opening remarks, project promotion was still front of mind. But with BitTorrent in his company’s toolbox, things are at a new level.
Moving on from memes and hype, Tron has made a bet that by acquiring this long-standing company at the center of an early protocol it can leapfrog the crypto adoption problem. Introducing cryptocurrency to a huge user base – something legacy internet companies have so far been reluctant to do – is Sun’s new vision.
Sun told CoinDesk:
“BitTorrent is different, because we already have 100 million active users. I think that is the huge challenge for other companies.”
All about users
BitTorrent’s permanence has been impressive, but it remains buggy.
In short, BitTorrent allows lots of users to quickly download files by breaking them into pieces. If everyone downloads different pieces at the same time, they can all get the file close to equally fast. It’s able to do this by requiring users to also share back the parts that they’ve already downloaded from the system. That’s the crux of its peer-to-peer efficiency.
In that way, users are basically bartering bandwidth with each other. Barter systems work OK, but Tron’s BitTorrent thesis is that adding a unit of value, the BitTorrent Token (BTT), will make the system work even better.
That was the general message in the presentation by Justin Knoll, an employee at BitTorrent at the time of the acquisition who is now leading Project Atlas, the name for Tron’s bid to roll out BTT to the masses.
BitTorrent’s Jusin Knoll speaks at niTROn Summit 2019.BitTorrent, in Knoll’s view, works somewhat magically. “You can have unlimited data with no central cost,” he said. It’s not perfect, though. A lot of long-tail content, the stuff that people only demand occasionally, can be hard to find.
The less popular stuff might not have a “seed” out there. That is, someone who has a copy of a file available for the network to break into pieces and download.
“We can do better than this. We can make it so there’s actual rational incentives for people to promote to seeders,” Knoll said. That rational incentive is getting paid by some users for first dibs on downloading.
Because BitTorrent the company makes the most popular user interface for BitTorrent, it has an advantage to introducing the option to use tokens to a large portion of the protocol’s user base, Knoll explained.
In fact, despite the fact that BTT is optional, Knoll predicted that downloads should be faster even for users of BitTorrent who don’t choose to use the token. That’s because there will be more seeds available either way.
On Thursday, Binance released more details about the planned sale of the BTT token. It will sell 6 percent of the BTT supply starting January 28, with a $7.2 million hard cap, according to a Binance spokesperson.
Additionally, holders of TRX will receive airdrops of 10.1 percent of BTT tokens over the next six years. Sun said that Tron holders should expect the first airdrop in mid-February.
Still, many critics of Sun’s plan have noted that Mojo Nation previously introduced a distributed file-sharing protocol that used digital cash, and it failed. Sun has a simple answer for why it can work this time around.
With so many more people, Sun said, it’s much more likely that a critical mass of users will try it. That’s why Tron’s BTT experiment is worth paying attention to: the job of introducing the complexity of money on the internet falls to an established player, rather than a crypto startup.
Affirmation by association
BitTorrent also allows Tron to associate with a known and established brand. This fits, because Sun cements his credibility through connections.
The conference effectively ended with an onstage Q&A featuring Justin Sun and NBA legend and now venture capitalist Kobe Bryant. The main purpose of that appearance seemed to simply be associating Tron (and Sun himself) with a name that basically everyone knows.
For his part, Bryant didn’t say anything that reflected any depth of knowledge about Tron, crypto or the blockchain, but it was the most well-attended part of the whole event, and that seemed to have been the point of including it.
Kobe Bryant speaks with Justin Sun at niTROn Summit 2019.Similarly, each time Sun spoke, he included an anecdote from the man he called his “mentor,” Jack Ma, founder of Alibaba, the only company in the world that might currently compete with Amazon.
To further this strategy, Tron seems to be establishing its credibility by winning over less-sexy but more substantive partners.
We spoke with eBay and PayPal alum, Sanja Kon, who now serves as vice-president for global partnerships with blockchain payments company UTRUST. “We are token agnostic and we want to integrate the tokens our buyers want,” she said.
While Kon is based in London, she traveled to San Francisco because she says UTRUST is seeing demand from holders of its UTK token to integrate Tron.
(As we parted ways with Kon, another entrepreneur approached her and asked if her company’s platform could support very large payments, the kind of payments that can pay for yachts. Crypto’s still crypto.)
Galia Benartzi, a co-founder of Bancor, spoke at the conference and took a similar position toward Tron as Kon. She said she was there because Bancor is strongly considering making Tron one of the next blockchains it integrates.
Bancor provides automated conversions between tokens, but right now it only works with tokens on Ethereum and EOS. Once Bancor has integrated a new blockchain, it’s easy to add new tokens hosted by that blockchain, but adding a new protocol is not easy.
“We’ll support every blockchain that’s interesting,” Benartzi said. Still, it’s a question of how interesting any one is that determines how quickly Bancor will move to do the coding work to add a new one.
Each new blockchain adds additional complexity, because, Benartzi said, “We have to build the cross-blockchain compatibility.” So each new addition is a significant vote of confidence in that technology.
Tron would also be attractive for Bancor because it’s actively encouraging new tokens on the platform. BTT will obviously be one, but many others are also getting launched on Tron’s network.
Bancor co-founder Galia Benartzi on a panel at niTROn Summit 2019.Another use case that Sun emphasized in our interview was gaming, so it came as no surprise that one of the companies highlighted at the event was the non-fungible-token gaming company Everdragons.
Patrick Rieger, CEO of the German company, explained to CoinDesk that it was founded as an ethereum-based effort. “Our launch on ethereum fell right into [last June’s] FCoin disaster,” he told us. (At roughly the same time, Tron’s trx token was leaving ethereum as well.)
Everdragons users panicked that their NFTs might never be useable again if ethereum didn’t get faster and cheaper. That’s when the company started looking around for a way to bridge to other blockchains.
“We did not really leave ethereum. We expanded to Tron,” Rieger said.
Estimating future demand
Some people are hoping for Tron to do well. Others are praying.
As we waited to get in on the second day of the event, we saw an attendee approach the creator of TronWallet, Dio Ianakiara. The attendee said, “I have just one question.”
It caught CoinDesk’s attention. Would the attendee have a substantive question about an entrepreneur providing key technical infrastructure? In short, no. The rank-and-file TRX holder asked, “How high do you think Tron can go?”
Before Ianakiara answered another attendee turned on the questioner and answered sarcastically, “Don’t you know? To the moon, man!” The hype (or the desperation) isn’t a selling point for every potential partner.
For example, Uphold’s Robin O’Connell, chief revenue officer at the crypto-to-fiat company, told CoinDesk his firm hasn’t committed to support payments on trx, which, as of this writing, is the 8th-ranked coin on CoinMarketCap.
“We’d never list Tron because it’s a Top 10 traded currency,” O’Connell said in an interview. “It’s more that if there’s enough potential demand for Tron payments or ecosystems that are supporting Tron, that’s where we would see the opportunity.”
Patrick Rieger of Everdragons speaks at niTROn Summit 2019. “We’re still assessing,” he added, “but our sense from the conference is there’s a good bit of demand.”
And obviously if BitTorrent becomes a significant use case, that would become a key source of demand for a company like Uphold. Particularly as BitTorrent seeders seek ways to exit to their local fiat currency.
BTT is a TRC-10 token. “[The Tron blockchain] is the medium that allows us to connect BitTorrent users that have BTT,” Knoll said from the stage.
Jonathan Chou, CEO of the decentralized sharing-economy startup Bee Token, was on hand at the event, mostly as an observer. He confirmed Sun’s thesis that BitTorrent’s user numbers are the difference maker.
“It’s all about the market penetration of awareness,” Chou told CoinDesk. With so many users, he added:
“That’s going to be the biggest dapp on blockchain, period.”
Photos by Brady Dale for CoinDesk