TRON (TRX) Blockchain Platform Explained

What Is Tron?

Tron is a blockchain for creating decentralized applications. Its native token is TRX, which developers can use in their applications. Unlike similar blockchain projects, TRX is not used on the chain to pay transaction fees.

Tron is maintained by the Tron DAO, a Singapore non-profit organization.

History of Tron

The Tron Foundation was established by Justin Sun in 2017 with the goal of creating a scalable blockchain and virtual machine that would allow content creators to share and monetize their content.

It was hoped that this design would attract content creators, who would maintain full ownership over their content by removing intermediary streaming services. Creators would receive payment from consumers, who would pay for the content using TRX.

In 2018, the Tron Foundation purchased BitTorrent, a peer-to-peer file-sharing system. The intent of this purchase was to use the existing system to facilitate faster content downloads and uploads.

The content creation and sharing model didn't attract the following its designer had hoped for, so the blockchain was redesigned for decentralized application development. The foundation and blockchain were fully decentralized in 2021 and turned over to the community. The foundation became Tron DAO (decentralized autonomous organization), governed by its users using smart contracts.

How Tron Works

The Tron blockchain and network have been compared to that of the Ethereum platform, but it operates somewhat differently. The Ethereum blockchain uses its native cryptocurrency, ether, as a payment method to network participants called validators.

Tron uses bandwidth points as payments. By default, each user has 600 bandwidth points, which represent 600 bytes of data. Transactions are measured in how many bytes they occupy in a block, so if a transaction is larger than the amount allowed by default, the user must purchase more bandwidth points. More bandwidth points can be acquired by staking TRX.

Tron uses staking in a consensus protocol called Delegated Proof of Stake. Stakers receive checkpoint submission rewards for submitting a snapshot of the blockchain state in addition to being paid transaction fees. Additionally, the amount they have staked gives them more voting power in governance activities, such as voting for the 27 super representatives. Super representatives are nodes that propose blocks for the blockchain, so there is no "mining" or competitive puzzle-solving for tokens.

These nodes also distribute rewards to super representative partners or candidates not elected to be among the 27 super representatives by setting a "broker ratio" in their wallet. The broker ratio is the ratio of rewards kept by the super rep to the rewards distributed to partners. The super reps are not required to distribute the rewards, but their broker ratio helps them receive votes during elections.

How to Get Tron

Tron can be purchased on many exchanges that support it, but it is not available on Binance.US, Gemini, or Coinbase. TRX is not minable like many cryptocurrencies; it must be earned by staking TRX you already own.

Many people are willing to sell their TRX peer-to-peer (you can find many instructions on how to do this online), but this method is very risky. There are plenty of scammers who will try to sell you TRX for another crypto, or try to rent bandwidth to you so that you can make a transaction. They may accept other cryptocurrencies or tell you they accept fiat currency via PayPal or other services. It's easy to be tempted by some of these seemingly helpful community members, but P2P in this context is not safe. You are more than likely to become a scam victim using these methods, so it's best to use a regulated exchange.

The Future of Tron

It's always difficult to predict whether a cryptocurrency and blockchain will exist in the future. Like many blockchains, Tron has been turned over to a non-profit decentralized autonomous organization (DAO), Tron DAO. The organization appears to be active, sponsoring an event it calls HackaTron, where blockchain developers can compete to build decentralized applications.

Since late 2022, TRX's market price has made a slow progressive climb. It had a market cap of $10.2 billion and a 24-hour trading volume of 324.1 million, suggesting that there is a significant amount of capital invested in TRX but relatively low liquidity.

In May 2024, Tron DAO announced that Google Cloud had joined its list of "super representatives," trusted network nodes that propose new blocks for the blockchain. These representatives are voted in by the network after paying 9,999 TRX to become a candidate.

There appears to be an active, albeit small, community, a supportive and involved DAO, and investor interest. There is a good chance that TRX and Tron will maintain their position as long as there is interest in keeping the project alive.

The Bottom Line

Tron is a blockchain created to host decentralized applications. Its native token, TRX, is used as a reward, to make payments, and as a speculative instrument for investors.

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