Theta Network: how to operate a decentralized video streaming
Today, content delivery networks (CDNs), geographically located networks of operators, are paid to deliver video stream content to end-users. Due to being restricted by their locations, existing CDNs can't keep up with increasingly high-quality streams.
Theta allows its global pool of users to relay videos by offering their spare bandwidth and computing resources and rewards them for doing so. As more users join the Theta network, more bandwidth is available, thus improving the streaming quality of the videos on the network.
Central to running the operations on its blockchain, Theta boasts two native cryptocurrencies, THETA token, for voting on changes to the protocol, and TFUEL, for executing transactions.
Theta is also open-source software. It claims that this increases the potential for anyone to create new applications and services on top of it.
Theta was co-founded by Mitch Liu and Jieyi Long in 2017. Liu has a long history in the gaming and video industries, co-founding video advertising firm Tapjoy, mobile social gaming startup Gameview Studios, and THETA.tv, the live streaming platform whose DApp was the first to be built on the Theta protocol.
Long is Theta's second co-founder and CTO, following similar multi-year experience in design automation, gaming, virtual reality, and large scale distributed systems. He authored multiple peer-reviewed academic papers and holds various patents in video streaming, blockchain and virtual reality.
Theta now has a modest team, and its official website lists strategic corporate investors as Samsung NEXT, Sony Innovation Fund, media investors BDMI Bertelsmann Digital Media Investments, CAA Creative Artists Agency, and traditional Silicon Valley VCs including DCM, Sierra Ventures and the VR Fund.
Theta involves two tokens: THETA and TFUEL. THETA exists only for governance purposes, with 5 TFUEL tokens issued per 1 THETA held at the time of the mainnet launch in 2019.
THETA itself launched in 2018, at which time it was distributed to buyers as an ERC20 token on Ethereum. Afterwards, all ERC20 THETA were converted to native THETA on the mainnet.
The total supply of THETA is capped at 1 billion tokens. It is distributed in various proportions among all network participants, as well as the Theta team itself and a reserve pool.
TFUEL is used to power transactions in a similar way to gas on Ethereum. Its total supply is 5.3 billion tokens.
The Theta network also allows developers to build decentralized applications on top of its blockchain. Examples include royalty distribution applications and crowdfunding mechanisms.
The network is run by three different groups of users:
Enterprise and individual validator Nodes: These are participating companies that stake tokens, so that in return they can have the right to process transactions on the network.
Guardian Nodes: These are users who do work to ensure that the transaction blocks proposed by the enterprise validator nodes are correct.
Edge Nodes: These users share their unused bandwidth or assist in relaying streams over the Theta Network and receive TFUEL as a reward.
Theta network users can download an official Theta Wallet app to hold or stake their THETA and TFUEL tokens. TFUEL is used to pay for transactions on Theta and is used as the micropayment currency when users pay Edge Nodes for sharing a video stream.
Theta also has built a micropayment system for video streaming purposes that allows content viewers and creators to send and receive THETA via the official wallet app.
Theta has created an off-chain pool for micropayments to streamline the network's core operations. This system utilizes an aggregated signature gossip scheme, whereby a set of Guardian Nodes compiles partial signatures from its neighboring nodes before communicating the aggregated signature to the rest of the network. This allows the signature share of each node to quickly reach other participating nodes while minimizing the resources needed to execute these communications. As a result, any user can withdraw using off-chain transactions, which frees up more node processing power for the network's core data storage, transcription, and delivery purposes.
Theta Token Minter
In late 2020, Theta added support for flexible Turing-complete smart contract implementation, which opened up a whole new realm of potential use cases and dApp features. To empower users to tap into these new capabilities, Theta Labs launched the Theta Token Minter, which allows any user to create new TNT-20 tokens on the Theta blockchain with no smart contract experience needed. Users can simply input the intended token name, ticker symbol, and supply parameters of their new token and the Token Minter will automatically mint the new tokens. The fact that these tokens can be created without technical expertise and configured to have either a permanently fixed or variable supply opens the door to a wide range of new applications and assets on the Theta blockchain.
Modified Byzantine Fault Tolerance (BFT)
Central to Theta is the modified BFT, a proof-of-stake (PoS) governance mechanism that keeps the distributed network of computers running Theta Network in sync.
Theta's consensus mechanism differs from traditional PoS in that both validator and guardian nodes participate in the consensus mechanism, adding an extra level of security to the protocol.
These nodes must stake THETA tokens in order to help power the blockchain, produce blocks and vote on changes. Validator nodes are required to stake a minimum of 200,000 THETA while Guardian Nodes need to only stake 1,000 THETA.
Of note, voting power is determined by the amount of THETA staked.
Now, after learning all this great information, you might be wondering where you can store your Algorand tokens? Well, look no further than Atomic Wallet for all your crypto wallet, and exchange needs!
Atomic Theta Wallet
Atomic Wallet offers you a great place to store your Theta tokens. Besides just being a wallet for storing, sending, and receiving, you can do much, much more with an Atomic wallet. Atomic Wallet has some great features such as having a built-in decentralized exchange/swap where you can buy more than 300 crypto currencies and have them securely stored in your Atomic Wallet. What's more is that you can stake a number of tokens right in the Wallet! On top of that, for each transaction you make in Atomic Wallet, buying, selling, or swapping, you are eligible to get up to 1% back per transaction paid out in Atomic Wallet's native token, AWC.
That was quite the ride wasn't it? Do you still have more questions? Confused? Or just dying to know more? Then look no further to the FAQ and resource sections below! They'll give you those extra morsels you have been searching for and allow you to continue your deep dive research into Theta!
How does the Theta Network function?
THETA allows nodes to validate transactions, produce blocks, vote on changes to the network and earn TFUEL as a reward. Further, TFUEL is used to pay for transactions on Theta and is used as the micropayment currency when users pay Edge Nodes for sharing a video stream.
Theta Layer 1 features:
Theta is an ERC-20compliant decentralized video delivery network. This categorization means that Theta users can utilize the Ethereum ecosystem to simplify their crypto experience. Ethereum is the largest Dapp ecosystem in the world and ERC-20 tokens enjoy a massive variety of wallets, DEXs, and games. Theta leverages the security and efficiency of Ethereum and combines it with various proprietary technologies to improve the quality of stream delivery.
What is TFUEL and how is it generated?
TFUEL is the operational token of the network. The genesis distribution of Theta Fuel will happen when then Theta mainnet launches on March 15th. For each THETA that you hold when the Theta Mainnet launches, you will also receive 5 TFUEL to seed the ecosystem. To ensure you receive this initial distribution, make sure to follow our mainnet token swap procedures.
After the initial distribution of 5 billion TFUEL (5 for each of the 1 billion THETA), the supply will increase at an initial annual target rate of 5%. The new supply rate will be determined at the protocol level, and can be adjusted as needed by protocol consensus to provide the appropriate amount of new supply as demanded by platforms on the Theta Network. Each network participant running a Validator or Guardian node will earn part of that new supply of TFUEL, proportional to the amount of THETA they are staking.
Why does Theta need a 2nd token?
Here are two reasons why it is a good idea to have a second token on the Theta network.
- First, this allows the utility and purpose of each token to be separated. THETA is used strictly for staking and securing the network, while TFUEL is used to power microtransactions and operations of the network. This is necessary because staking inherently decreases circulating supply, but video relay transactions and smart contracts will require a highly-liquid token that can facilitate millions of daily transactions.
- Second, two tokens are needed to solve governance issues that arise from using the same token for staking and operations. Because the token used for operations must be liquid, it would be easier for a malicious actor to accumulate a significant number of that frequently-traded token on the open market. If that same token is also used for staking, they could potentially threaten the security of the Theta Network by quietly acquiring a large amount of the staking token. By separating the two functions (staking and operations) into different tokens, that risk is greatly decreased.
What is Cryptocurrency?
Cryptocurrency is a digital asset or currency that exists only on the Internet. Transactions are verified and records are maintained by a decentralized system using cryptography. This removes a centralized authority, and leaves it in the hands of the users to maintain the asset via voting and having consensus on issues.
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Learn more about Theta on the official website.