What is Theta and how does it work?

Qué-es-Thetha
7 min read

Theta is a fully decentralized blockchain with the goal of functioning as a decentralized video network provider. Its creation stems from the need to solve several problems related to the online video ecosystem

This platform uses blockchain technology to offer a wide range of benefits and also allows its users to receive a passive income as a reward for collaborating and sharing their bandwidth. This income is made in the platform’s native token, THETA

History of Theta

This blockchain was launched in March 2019 with the sole purpose of being a dedicated video streaming network. The project was co-founded by developers Mitch Liu and Jieyi Long in 2018. Liu is known for his history in the gaming world, as he also co-founded Gameview, a mobile gaming studio among other projects such as Silver.TV. The latter is a sports-oriented platform. His DApp was the first to be built on the Theta protocol.

Long also has extensive experience in the world of video games. That is why he also became the co-founder of the sports platform Silver.TV. Both developers claim that the Theta project would turn the video streaming industry around by making it more decentralized and allowing its users to pay lower costs and make more profit.

The project currently has a small team with advisors such as YouTube co-founder Steve Chen and Twitch streaming platform co-founder Justin Kan. In the first three months of its launch alone, more than 530,000 users around the world (more than 150 countries) had shared their bandwidth on the Theta network.

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How does Tetha work?

Theta works through a network that distributes data from a server. This network is called a content delivery network or CDN. Through this network we can play a video on our device streamed from the nearest server. The video is downloaded to the device, storing the data as a cache.

The Theta network allows the cache memory to be shared. In this way the transmission data need only be transmitted once. This data in turn can be shared with other devices. By collaborating with the network, by allowing other users to use this data, the platform rewards the user with its native token.

This is how the network manages to solve one of the main problems of the video playback industry, that data reaches sites with content delivery restrictions. The network also rewards users for viewing content and sharing resources, but also offers a higher quality streaming service.

Something curious about this platform is that it implements a system called aggregated signature gossip scheme. This system bases its operation on validating transactions and then searching through the transactions in order to find failures and prevent nodes from collapsing. In other words, it creates a fail-safe and faster than average system.

One of the main features of Theta is that it has three native tokens. These are THETA, TFUEL and Gamma. Between the three of them they are responsible for powering the platform’s economy. Next we will take a look at how the Theta token works.

 

Token Tetha

This is one of the three native tokens of the platform. It is a must-have to encourage users to collaborate on the network. Users help the network, by sharing data, to offload CDNs. In addition, users’ caches can be reused if they share them with neighboring nodes.

This token has a high transaction speed, as it has chosen 10 to 20 validator nodes that constantly generate blocks. THETA also has a high number of guardian nodes. For a block to be validated in the network it must have passed two thirds of the block checkpoints in the consensus.

The platform also serves as an advertising medium. Users can advertise by paying Theta tokens to the viewers of their advertisement. As a reward for their time, they also receive Theta tokens. For this purpose, the network has a proof-of-engagement system. This system is used to find out how much time users have spent viewing content.

Another application of THETA is the creation of a payment system external to the blockchain. In this network users create their own group of micropayments. In addition this helps to divert work away from the main network and thus keep it less congested.

 

Dual token system

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An important aspect in the operation of the platform is that it uses two native tokens for its operation. These tokens are Theta (THETA) and Theta Fuel (TFUEL). This is with the objective that each token has its own incentive allowing the network parameters to be properly managed. 

THETA is the token intended to govern, rethink and secure the network while TFUEL maintains a more operational use. TFUEL is used in payment transactions or for the implementation of smart contracts and video transactions

While the Theta token has a total supply of 1 billion coins, TFUEL has a total supply of 5 billion coins. Theta Fuel has an annual inflation of 5% and to balance the total amount of tokens a TFUEL token burning mechanism was established.

At the launch of the mainnet each user received a proportional amount of tokens. For each Theta token the user received 5 TFUEL tokens as long as they connected their wallet to the mainnet via the Theta website.

 

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Wallets

If you have decided to buy or earn THETA you will need a safe place to store your cryptocurrencies. Here we tell you which wallets you can use to store it safely:

  • Trezor wallet. This is a hardware wallet that guarantees the security of our assets by storing our private key off-line.
  • Ledger Nano S. This is another hardware wallet enabled to store THETA.
  • THETA wallet. This is the official THETA wallet. It is available for Windows, MacOS and Linux computers. It is also available in its mobile version for Android and IOS.
  • Atomic Wallet. This wallet is also enabled for THETA among 500 or more other currencies. This wallet is a cross-platform wallet available for both desktop and mobile.

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