Hi everyone! I am experimenting with posting a blog on Streemit for the first time :) I just wrote this article on one of my favorite cryptocurrencies TRON, so feel free to check it out and let me know your thoughts!
In this article, we take a deep dive into the fundamentals of the (TRX) TRON cryptocurrency – one of the most hyped blockchain projects in the world.
Cryptocurrency and blockchain technology is the most important innovation since the invention of fire. That’s right, FIRE. Like what the cavemen discovered thousands of years ago.
Without a doubt cryptocurrency is the greatest investing opportunity of our lifetime and possibly the history of the world. Unlike Wall Street, the cryptocurrency market never shuts down and trades 24/7/365. It’s extremely difficult to determine which projects are the real deal and which are scams.
What is TRON?
If you’re a member of a social network like Twitter or Facebook, there’s a high chance you’ve scrolled past a project called TRON.
TRON is an ambitious project dedicated to the establishment of a truly decentralized Internet and its infrastructure. In 2017, as Ethereum exploded in popularity, the network experienced low transaction throughput times and high transactions fees causing major scalability concerns for widespread adoption. TRON was founded and envisioned as an innovative solution to the scalability challenges faced by Ethereum and other platforms.
The Marketing Genius of TRON
The power of Tron derives from their marketing prowess.
With support from figures like NBA All-Star and legend Kobe Bryant, TRON has surged onto the scene with an inspired community. The charming creator of TRON harnessed the true power of marketing by being an out-spoken front man with over 750k followers on Twitter.
The founder of TRON – Justin Sun – has an All-Star resume as well. After obtaining a Master’s Degree from the University of Pennsylvania, Sun was the first employee and Chief Representative at Ripple Labs in the Greater China area. Forbes named him to the 30 under 30 in China from 2015- 2017 and he is also the protégé of the billionaire Jack Ma – aka Jeff Bezos of Asia. He founded the company CallMe, the largest voice live streaming app in China. Now, Justin “Tron” Sun serves as the CEO of BitTorrent and is the CEO of TRON.
Is (TRX) TRON a Scam?
Lately there’s been a lot of speculation around the project, with many calling it a scam. TRON is an extremely ambitious project with a 10-year road map, but how realistic are their goals?
Let’s take a deep dive and look at the fundamentals of one of the largest, most talked about projects: TRON.
Fundamental Analysis of (TRX) TRON Cryptocurrency
In this section, I will analyze the fundamentals of TRON to determine the strength of the project and attempt to provide a valuation. I like using Fundamental Analysis because it will reveal if an investment is worthy of long-term capital allocation, as well as examine the intrinsic value drivers.
I will examine the following:
Decentralization Edge
Valuation
Community & Developers
Relation to Digital Siblings
Issuance Model
Operating Health of Network
Remember, it is always important to do your own research (DYOR).
1) Decentralization Edge
Is there a reason for the project to exist in a decentralized manner? To answer this, we need to understand the problem TRON is trying to solve.
Website
The TRON website has an incredible design and is packed with useful information on network statistics, the community, setting up a Wallet, upcoming events, distribution of nodes, developer resources and more. The (TRX) TRON cryptocurrency displays incredible transparency, which is more than I can say for other cryptocurrency projects.
White Paper
The beauty of cryptocurrencies is they are supported by open source code with transparent and accessible communities. Any cryptocurrency worth an investment will always have a white paper outlining its proposal.
The TRON White Paper is impressive. The TRON Foundation clearly states the problem they are trying to solve.
“TRON is a scalable blockchain solution that has employed innovative methods for tacklingchallenges faced by legacy blockchain networks. Having reached over 2M transactions per day,with over 700K TRX accounts, and surpassing 2000 TPS, TRON has enabled the community increating a decentralized and democratized network.” – The TRON White Paper
My understanding is TRON attempts to improve on the scalability issues that other blockchain networks like Ethereum struggle with. TRON offers public blockchain support with high throughput, high scalability, and high availabity for Decentralized Applications (Dapps). It’s clear there is a reason for TRON to exist in a decentralized manner.
2) Valuation
What gives (TRX) TRON cryptocurrency value?
While having no physical manifestation, TRON’s value is derived from the community and marketplace. After listening to Justin Sun speak, it’s obvious he is most excited about TRON’s potential impact on the gaming industry. Therefore, I will focus on the gaming industry offer some insight on the potential value proposition of TRON.
The Video Gaming industry is booming with new products and technology. In 2018, gamers around the world spent over $138 billion on games and the market is projected to grow 13% a year. Additionally, revenue generated from a game isn’t just the initial purchase, but more and more games are monetizing with in-game purchases. Competitive esports are exploding in popularity as well and engagement is growing with young people.
The gaming ecosystem has an economy of its own with players regularly trading amongst themselves. A blockchain-based platform will allow video gamers to buy and sell virtual items in a fast, secure, and transparent fashion that has never been possible before. The virtual item trading economy sits at $50 billion today, but is accelerating higher.
The possibilities of combining blockchain with games are endless. With the ability to process over 10,000 transactions a second, the (TRX) TRON cryptocurrency is a perfect platform for the gaming industry. In fact, they are already working on this target market with the launch of a $100 million blockchain gaming fund.
Price Target
The price of TRON peaked in January 2018 at around $.30 per TRX. With stronger infrastructure and Dapps potentially becoming mainstream, Tron offers a great risk/reward today.
It’s easy to get excited about the upside potential of Tron over the long term. The Gaming Industry is just one target market for TRON, but if they are successful I can envision the price of (TRX) TRON cryptocurrency reaching well over $1.
3) Community and Developers
Without a doubt the best part about TRON is the community and developers who are heavily involved in the project.
TRON has an enormous community on Telegram, Facebook, Twitter, LinkedIn, Reddit, Instagram, YouTube, Snapchat, and so on. The TRON subreddit page has almost 70k subscribers and their Facebook has almost 1 million follows.
Additionally, Justin Sun has enormous influence himself with over 775k followers on Twitter.
CryptoCompare has sought to amalgamate developer activity and metrics to make it easier to compare different cryptocurrencies. CryptoCompare has created the Code Repository Points system to assess the strength of a cryptocurrencies development. A project scoring high in Code Repository Points indicates a high amount of development activity, which is a positive.
As you can see, TRON doesn’t perform as well compared to other projects like Ethereum, Litecoin, NEO and Cardano. This shows you active development is occurring on the Tron platform, just not as much as other projects.
TRON still passes the Community and Development test with flying colors.
4) Relation to Digital Siblings
TRON operates on its own platform similar to the Ethereum Network. Since it is a separate platform, it is at a disadvantage compared to other projects building on top of existing platforms.
However, other projects and tokens are originating on top of the TRON platform. BitTorrent is one of these projects, which was recently acquired by TRON. Over 1 billion people have downloaded BitTorrent, helping TRON establish themselves as a platform worth developing on.
5) Issuance Model
The biggest issue I have with TRON is their issuance model.
At the genesis of TRON, there was a total supply of 100 billion TRX. The TRON Foundation burned 1 billion TRX on ‘Independence Day’, reducing the total supply to 99 billion. Additionally, the TRON Foundation locked up 32 billion TRX as a reserve until the year 2020. This means the total circulating supply is actually only around 66 billion TRX.
On the TRON network, one block is confirmed every 3 seconds, with each block awarding 32 TRX to super representatives. According to the (TRX) TRON cryptocurrency white paper, roughly 336 million TRX are awarded annually.
With 336 million TRX entering the supply each year, we can assume there is inflation of 0.33% each year ((336 million / 99 billion) x 100). Not bad!
But, what will happen to the 32 billion TRON held by the Foundation once they are released? Who is overseeing this? In about a year, 32% of the total supply could flood the market causing major issues. This is a cause for concern.
6) Operating Health of Network
Security
Because Tron uses the Delegated Proof of Stake (DPoS) algorithm, it is impossible to assess the security of the network by examining the hash rate. Proof of Stake offers advantages to security over proof of work, but with tradeoffs. In this case, the DPoS protocol sacrifices decentralization for throughput due to the low number of block producers.
There are over 1147 nodes across the world running the Tron network. Looking at the geographical distribution of nodes, we can see over 50% resides in just 2 countries: the United States and China. Not only is TRON more centralized, but I am concerned that Justin Sun has too much influence over the project as well.
Exchange Support for (TRX) TRON Cryptocurrency
There are dozens of exchanges that support TRX trading such as Binance, OEX, BitForex, Huobi Global, and more offering a tremendous amount of liquidity. However, many of these exchanges supporting TRON aren’t reliable, with some listing questionable digital assets.
Exchanges like GDAX, BitStamp, and Gemini offer a great benchmark for a cryptocurrencies validity. These exchanges are considered the cream of the crop because of their due diligence before adding cryptocurrencies. Unfortunately, TRON is not listed on either of these exchanges. Recently, Coinbase announced they are looking into adding over 30+ additional cryptocurrencies to their platform, but left TRON off the list.
User Adoption
Looking at the user adoption trends for TRON is exciting. The network is growing at an impressive clip.
One way to look at user adoption is to look at the number of wallet addresses that have been created. Using tronscan.org, we can see that in July 2018, there were just 2000 Total Addresses. Today, the total number of addresses has grown to 1.5 million and is trending up.
The number of transaction has also increased considerably. Using the same time frame, in July 2018 there were only around 2000 transactions per day compared to over 2.5 million today.
The number of Decentralized Applications (Dapps) on TRON is growing nicely as well. TRON has over 154 total Dapps and over 31 thousands active users. The gaming category is the strongest with over 62 Dapps and around 15k active users. Again, the daily users of all Dapps is trending in the right direction.
Overall
The more I look into TRON, the more I come away impressed. Consistently, TRON shows up on my Twitter feed and people are clearly excited about the project (and having dreams of lambos). The community is incredibly strong and most importantly the developers are active.
However, I do have major questions that need to be answered. Justin Sun exerts too much influence over the project and TRON seems extremely centralized. I also have issues over the issuance model. With 32% of the total supply released at the end of 2020, how will the market respond? As an investor this scares me.
Overall, TRON is clearly not a scam and is a major player in the blockchain ecosystem. Recently, they jumped to the #7 slot on CoinMarketCap, leapfrogging Litecoin and Stellar. There are so many different factors to look at when evaluating cryptocurrencies and many statistics are difficult to find because the market is still in its infancy. TRON makes many of these statitsics readily available, displaying incredible transparency.
Any project trying to scam you wouldn’t offer the same amount of insights – or bring Kobe Bryant onboard to promote it. If TRON can make some magic happen in the Gaming industry, expect the price of TRX to moon!
Please let me know if you have any questions on (TRX) TRON cryptocurrency.
I'm excited that this was my first REAL post on Steemit! I am still working on mastering markdown :) I would love to hear your thoughts!