Tron is a Decentralized Ledger using blockchain technology founded in 2017 by its current CEO Justin. In September 2017, the Tron blockchain started under the helm of a non-profit organisation called the Tron Foundation, which remains at the project's core. Since the beginning, Tron has had a strong in-house developing team supporting the network on top of all the 3rd party developers building on the Tron blockchain.\
The name of the native coin of the Tron network is TRX. It works as a medium of exchange and plays an integral part in the consensus algorithm of the Tron network. We will discuss it in more detail later in this article.
Beginners guide to Tron
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Tron launched in September of 2017, but at the start, it did not have its network. It began as an ERC-20 token on Ethereum, making an Initial Coin Offering (ICO) during the bull market of that year. In 2018, the ICO participants could exchange their ERC-20 tokens for TRX hosted on the Tron network, which already had some basic functionalities at the time. All TRX coins are on the Tron blockchain, with the exchange now closed.\
Recommended: Check out how to trade crypto as a beginner.\
The fundamental inner working of the Tron Blockchain are:
1. Programmable layer
Tron uses a Virtual Machine (VM) to execute smart contracts like Ethereum and other 2nd generation blockchains do. Instructions written in Java or Solidity are compiled into bytecode interpreted by the VM and used to perform computations.
These instructions execute the business logic of the smart contract that powers the dApps developed on Tron. Tron relies on a global state. Each transaction in the network has to be broadcasted to the whole system. That way, the Tron network keeps track of account balances.
2. Application Layer
The Application Layer refers to the protocols and systems that allow smart contracts to be called external entities outside the blockchain. Some examples are the front end of the dApp, which is meant to be used by people, databases requesting information, other smart contracts, etc.
3. Storage
Here we are talking about the block unit as Tron is a network that can run smart contracts and host dApps, a block stores more than transactions. It also hosts the smart contract's code, immutable and forever on the blockchain.
Now the most crucial part of this system is the Consensus Algorithm and how it works for Tron. In the section, we'll describe it separately, but it is also a core part of the Tron Blockchain, but it needs more delta to be explained.
4. Delegated Proof of State (DPoS)
The Tron Network runs by using Delegated Proof of State (DPoS). The network has a group called "Super Representatives" (SR) which validate transactions and propose the next block. Now, these representatives are sometimes different. They change periodically. The Super Representatives rotate on a 6 hours basis.
After the voting period, the top 27th candidates are called Super Representatives. From the 28th slot to the 127th are called SuperPartners, which also get rewards but at a lesser rate than the SR. All the remaining are candidates for the next election.
They don't receive any rewards in the current period but are available to participate in the next run. Apart from the Super Representative and Partners, Tron has stakes. These are wallet addresses that have delegated their TRX coin to the network. In exchange for TRX, the wallet gets Tron Power (TRP) on a 1 TRX = 1 TRP exchange rate.
TRP is what delegators use to vote in the elections
When you delegate your TRX to the network, it becomes locked and cannot be moved. In return for this service, you will receive TRX rewards when your crypto coins are staked into the network.
If you withdraw from the TRX, you will stop receiving rewards, and your TRP will be gone. The Tron network produces a block in just 3 seconds. The 27th Super Representative each receives 16 TRX as a reward. The Super Partners have to share 160 TRX in rewards divided in proportion to the votes each got. So, it is only equal for some of them.
In a day, the 160 TRX minted for the rewards comes to 4,608,000 new TRX created. This is true if the day has all the 700 elections that can occur in 24 hours.
But this is only sometimes the case since if there are periods with no transaction, the Tron network does not produce a block to prevent empty blocks. Additionally, 460,800 TRX are created to pay the 16 TRX to the 27 Super Representatives.
Now, let us discuss how to delegate TRX to the network and become a Super Representative.
How to stake Tron?
This is a straightforward process that takes a few steps:
- Create a Tron wallet compatible with staking. Some of the choices are:
- Guarda: Multi-chain assets
- Ledger Live: Ledger Nano Wallet
- TRONWALLET: TRX
- TronLink: TRX
- Deposit TRX into the wallet
- Go to the staking button on the wallet
- Enter the amount to stake
- Vote for the candidate you want to become a Super Representative
- Enter your transaction password
- Confirm the transaction
- After completing these steps, you are set. From this point on, you will begin to receive rewards based on the amount of TRX you have delegated to the network.
How to become a candidate?
This is a more complicated process. First, a person needs to create an account on Tron Scan, the blockchain explorer of Tron. Once you have an active account, you can apply to become a candidate using this button.
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You need to provide a website with all the information of your Candidate application and submit it to Tron Scan. The team at the site will review the website you provided, and if they approve the application, you will need to pay a one-time fee of 9,999 TRX.
They will only request the payment after giving you the green light. If anything needs to be added, they will give you time to correct it before requesting the fee.
Next, you must go to the Tron Git repository and clone the Tron Representative Template.
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You will modify this template with all your candidate application's personal information and add a logo. Once this has been done, take the completed template and publish it again in Tron Scan.\
After this is done, delegators can vote for you as a candidate. Now, if people don't know you are part of the Tron network, they won't vote. So, here is why you have to promote your candidacy to the Tron community and receive enough votes to become a Super Representative.
Demand for Tron
The price of TRX is unstable, as all crypto coins vary depending on network usage. This is good news since Tron is a very active blockchain. Right now, it has 16,670,220 active wallet addresses. At the time of this writing, it had 1,395,596,799 transactions completed.
Finally, 1,395,596,799 blocks have been added to the network.
This paints the picture of a very active blockchain being used constantly. For market data, we have:
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It is a coin with a large market capitalisation. DApp development is also very healthy, as we can see from this graph:
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All and all, there is enough usage of the Tron network to sustain the TRX's price in the long term. Many more projects are launching on the Tron network, and it keeps being developed by the Tron Foundation. The future looks pretty bright for Tron, and it will continue to be a top performer for years.
Like Ethereum, TRX has standards for tokens launched on their network. First, we have the TRC20\
Recommended: <em>Check out our TRC20 guide to understand better</em> token standard, which is used as a template for creating native assets to TRX. It is very popular with blockchain developers and has a lot of support and resources to be used to develop it.
Should you invest in Tron?
As we can see, there are strong fundamentals at play in Tron and TRX. Tron has many partners and extensive financial and gambling institutions using and developing dApps on Tron. There are numerous positives when it comes to the TRX coin.
On the negative side, we saw a sizeable annual issuance of TRX coins to pay the network participants. These newly minted coins can dilute the cryptocurrency value since they only have a lockdown period of 24 hours. So, every 24 hours, new coins from all those representatives looking to cash their TRX holdings enter the market.
Yet, there is enough native demand on the TRX network to sustain the value of TRX. As we said, this is a large market cap crypto coin. Its value won't swing widely like smaller cryptocurrencies. As a delegator, it is simple to earn passive income using the stake function in TRX wallets. All these factors make TRX a good investment.
Recommended: Check out this post on how to use Remitano invest for safe trading
Conclusion
TRX is one of the most successful projects out there. The Tron Foundation continually updates and develops the TRX blockchain. Its DPoS algorithm makes it easy and cheap to run the network while allowing users to earn rewards by being part of the network. All signs point to an even better 2021 for this project and a bright future.
Blockchain keeps evolving, and 2021 will be even more unpredictable. Here are the top cryptocurrencies that you may consider investing in. This will make sure you stay ahead of the investment curve.
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