8 min read
What is TRON?
Founded in 2017 by the Tron Foundation, a non-profit organization led by Justin Sun, the Tron (TRX) platform was built with the goal of creating a decentralized system that allows digital content to be shared easily and cost-effectively using blockchain technology and via peer-to-peer. It can be seen as a next-generation social media where content can be created and shared with anyone, anywhere in the world.
Tron’s blockchain allows its content creators to interact directly with distribution networks through a smart contract, eliminating existing third parties between content creators and agencies or distribution networks.
TRX: the native token of the TRON network
TRX is the Tron token and is based on the TRON protocol. At the time of its creation, the TRX token was based on the Ethereum blockchain and was so until 2018, when it migrated to its own chain and started supporting tokens known as TRC-10 and TRC-20 tokens. One of the most well-known TRC tokens is the BitTorrent token.
The TRX cryptocurrency is created as a means of payment, to share credit, and also as a storage medium.
Currently, the TRX cryptocurrency has become one of the largest cryptoassets in the world and, at the time of writing this article, its TRX token is ranked as the 20th largest cryptocurrency, with a total market capitalization of nearly $9,832,509,616 .
TRON has a total supply of 100,850,743,812 billion tokens, and at the time of publication of this article, about 71.66B TRX are in circulation.
In 2017, during a TRX token sale, 15.75 billion TRX were allocated to private investors, while participants of the initial coin offering earned 40 billion.
The Tron Foundation received 34 billion, and a company owned by Justin Sun received 10 billion. In other words, 45% of TRX’s supply went to the founder and the project itself, while 55% was distributed among investors.
How does the TRON network work?
The Tron blockchain achieves a high transaction per second (TPS) rate through a Delegated proof of Stake (DPoS) mechanism.
This means that it allows its users to delegate their crypto assets to earn rewards, i.e., its users can ‘freeze’ their TRX tokens and delegate someone else to create new blocks for the Tron blockchain.
But how does the Tron blockchain and its consensus mechanism work?
In the Tron network there are 27 validators who create the blocks on its blockchain, called Super Representatives (SR). All participants in the Tron network can use the ‘frozen’ TRX tokens to vote the Super Representatives. The election of the Super Representatives takes place every 6 hours.
Super Representatives who have created blocks can decide whether to reward those who voted for them with Tron tokens.
Blocks are added to the Tron blockchain every 3 seconds, and those who produce a valid block receive 32 TRX for their efforts. A total amount of 336,384,000 TRX is awarded annually.
In addition to super reps, users can operate three types of nodes on the Tron blockchain:
- Witness nodes are those that propose blocks and vote on protocol decisions;
- Full nodes transmit transactions and blocks
- Solidity nodes synchronize complete node blocks and provide APIs.
According to TRON, this approach helps its blockchain achieve higher levels of performance.
How to mine TRON?
As we have been able to see, the Tron network uses a Proof of Delegated Participation consensus mechanism and its TRX tokens have already been mined in full, i.e. they already exist. So I have to tell you that Tron tokens (TRX) cannot be mined in the traditional sense of the term.
Instead, new coins are produced and validated through the staking process and it is not necessary to use highly performing equipment such as ASICs, as in the case of Bitcoin mining.
This means that while PoW (Proof of Work) based consensus requires miners to invest in powerful hardware, DPoS (Delegated Proof of Stake) requires an investment in the cryptocurrency itself.
In this consensus mechanism, the more cryptocurrencies users have wagered, the greater their chances of being selected and voted as Super Representatives and thus earning more TRX.
How does TRX freezing work?
One of the features that characterizes the Tron network and makes its blockchain unique is ‘freezing’. Users, as already advanced, can ‘freeze’ their TRX tokens to obtain certain benefits.
When the user freezes his tokens, he is still the owner of his cryptos but he will not be able to use them for 3 days. It’s the same as keeping money in a savings account: it’s still ours but we can’t touch it for a while.
Once you freeze your TRX you will get the following benefits.
- For each frozen TRX, you automatically earn 1 Tron Power. Tron Power is used to vote for a super representative or candidate. For each Tron Power, you can cast 1 vote.
In short: 1 frozen TRX = 1 Tron Power = 1 Vote. The more Tron you freeze, the more votes you can cast.
- You will be able to earn Bandwidth Points (BP) for free transactions. Every day you can receive 5000 BP by default. The amount of BP you will get depends on the amount of TRX you are freezing.
- You will be able to earn energy points (EP) that you can use to pay for smart contract interactions, avoiding additional fees when interacting with a smart contract, such as TRC-20 tokens. Also in this case, the amount of EP you will get will depend on the amount of TRX you have frozen.
After 3 days, you can choose to unfreeze your TRX and, in that case, you will no longer be able to earn rewards.
If you buy Tron or want to bet this cryptocurrency, you will need a compatible wallet to store your TRX tokens.
Among the best options for storing your TRX, I recommend the following:
- Atomic Wallet: this is a desktop wallet that creates and stores our private keys ensuring the security of our assets.
- Trezor: this is a hardware wallet (USB) that accepts thousands of cryptocurrencies.
- Ledger Nano X: is another TRX-compatible USB wallet, which guarantees a high level of security.
- Trust Wallet: is a Tron wallet that allows TRX staking.
- Exodus: compatible with many cryptos and very easy to use.
Where to buy Tron (TRX)
Finally, if you want to earn TRX rewards with its staking but don’t know where to buy your first Tron tokens, I remind you that you can do it on Bitnovo, online or buying in cash in thousands of partner stores all over Europe. With Bitnovo buy TRX or other cryptos in one click and quickly and securely.