KEYTAKEAWAYS
- TRX is the native token of TRON, enabling transactions, staking, and dApp interactions while facilitating network governance and rewards.
- TRON's founder, Justin Sun, is controversial yet instrumental in expanding TRON's global ecosystem through his strong marketing capabilities.
- TRON faces stiff competition from emerging blockchain networks, but its efficient network performance and low transaction fees provide a solid foundation.
CONTENT
TRON (TRX), a fast-growing blockchain protocol, offers scalable infrastructure for decentralized apps. Despite competitive risks, TRON’s efficient network and robust ecosystem keep it relevant.
WHAT IS TRON (TRX)?
TRON is a decentralized open-source protocol founded in 2017 by Justin Sun.
TRON is one of the fastest-growing blockchain public chains globally, providing a reliable public chain infrastructure with high throughput and scalability for decentralized applications. TRX, the native token of the TRON blockchain, plays a similar role to Ethereum’s ETH and is used for staking, proposal voting, and covering gas fees. It is also the cornerstone of the TRON ecosystem, enabling transactions, dApp interaction, and creator compensation.
TRON has the largest circulating supply of stablecoins globally, surpassing USDT on Ethereum in April 2021. In addition, initiatives like decentralized applications, smart contracts, tokens, and TRON’s Delegated Proof-of-Stake consensus provide a robust foundation for TRON’s modular infrastructure. Although some question its lack of originality, these components are proven, and the design and user experience of TRON products are widely recognized.
>>> More to read: What Is Ethereum?
TRON (TRX) ECOSYSTEM
1. TRON Ecosystem Wallet: Developed and maintained by community developers, it integrates with several established first-tier wallets.
2. TRON Explorer: A blockchain explorer based on the TRON network that enables detailed querying and statistical analysis of on-chain data, while also supporting token creation.
3. TRON Ecosystem dApp: The second-largest dApp platform globally.
4. TRC20 USDT: Tether’s USDT stablecoin issued under the TRC20 protocol, offering low transaction fees.
5. TRON SR: TRON Super Representatives, elected through a decentralized process, are responsible for the on-chain governance of the TRON community.
>>> More to read: Understanding Tether USDT
APPLICATIONS OF TRON (TRX)
1. Credit Card Payment: The Spend credit card supports TRX payments.
2. TRON ATM: TRON ATMs facilitate online transfers of TRX.
3. Participating in TRON Token Issuance: On the TRON Explorer platform, TRX can be used to purchase tokens that are about to be issued on TRON.
4. Earning Energy and Bandwidth: Users can obtain energy and bandwidth resources by freezing TRX on the TRON Explorer platform.
5. Voting Rights: By freezing TRX on the TRON Explorer platform, users can earn TRON Power for voting on Super Representatives.
6. Receiving BTT Airdrop: Addresses holding TRX will automatically receive BTT airdrop rewards.
7. Participating in “Tronics Support Program”: Involvement in “Tronics” provides TRX rewards.
8. Pornhub Supports TRX Payments: Pornhub, the world’s largest adult website, accepts TRX as payment.
RISKS FACED BY TRON (TRX)
- Accusations of Copying Ethereum:
TRON uses a network structure similar to Ethereum, including decentralized applications (dApps) and token protocols. It is also compatible with Ethereum’s smart contracts written in Solidity, which can be deployed on the TRON public chain and executed automatically across its nodes. Vitalik Buterin, Ethereum’s founder, publicly criticized TRON for copying Ethereum’s code, stating, “Ctrl+C+Ctrl+V is much higher efficiency than keyboard typing new content.”
- Poor Security and Pseudo-Decentralization:
TRON utilizes the DPoS consensus algorithm, where 27 super nodes are elected to handle transaction blocks and maintain network security. Although anyone can become a candidate for super nodes, many believe that the monopoly of tokens by large holders ensures that these super nodes are almost predetermined, leading to the network’s primary rewards flowing into their accounts. Furthermore, because there are few nodes maintaining network security, it resembles a centralized database, and the ledger data may be vulnerable to tampering.
FUTURE DEVELOPMENT OF TRON (TRX)
From a trading and investment perspective, TRX and its founder Justin Sun have acted as a double-edged sword. Positive news often triggers a favorable price reaction, but after an initial surge, the price tends to drop as TRX is often used like an “ATM.” Therefore, being sensitive to news and closely following relevant topics is key for trading TRX.
- Controversy Surrounding Justin Sun:
TRON’s founder, Justin Sun, has a mixed reputation due to frequent over-promotion. Examples include engaging in online feuds, canceling a meeting after winning a lunch with Warren Buffett, and hosting a “beauty pageant” after acquiring the Huobi exchange, which was criticized as “actress marketing.”
Moreover, it’s essential to recognize the strong personal association TRX has with Justin Sun. As an industry veteran, he has prepared for potential risks early on, including legal and political challenges. However, a black swan event similar to the FTX implosion could pose significant risk to the token’s price.
- Broader Market Outlook:
Many in the crypto community are optimistic about a bull market opportunity following Bitcoin’s halving in 2024. If history repeats itself and a collective boom occurs, TRX will likely rise with the tide and may challenge higher price levels. The extent of this growth will depend on the strength and duration of the bull market.
In a stable or relatively unchanged environment, a cautiously optimistic outlook on TRX prices is warranted. The biggest tail risk remains tied to the founder and the stability of TRON’s ecosystem, particularly the stablecoin situation.
CONCLUSION
As one of the top 20 cryptocurrencies, despite some issues, TRX remains a target for short-term speculation and long-term investment. As long as systemic risks are avoided, TRX’s overall trend is expected to outperform most non-mainstream coins. However, due to the unique nature of TRX, its ecosystem, and its founder, it’s difficult for TRX to sustain a prolonged bull market.
Founded in 2017, TRON has developed over five years. In its early stages, TRON stood out among other public chains with low performance and high costs due to its efficient network performance, scalability, and extremely low transaction fees. With the strong marketing skills of its founder Justin Sun, TRON quickly established its brand and became a leader in the public chain sector. However, with the emergence of Solana, AVAX, ATOM, and Ethereum Layer 2 projects, TRON’s core advantages are being eroded. The public chain sector will face increasing competition, making TRON’s future development worth watching.
>>> More to read: What is Solana?
FAQ
- What is TRON (TRX)?
TRX, the native token of the TRON blockchain, was founded by Justin Sun in 2017. Similar to how ETH functions on Ethereum, it can be used for staking, proposal voting, and gas fees.
- What is TRON (TRX) ecosystem?
- TRON Ecosystem Wallet
- TRON Explorer
- TRON Ecosystem dApp
- TRC20 USDT
- TRON SR
- What are the risks associated with TRON (TRX)?
Accusations of Copying Ethereum & Poor Security and Pseudo-Decentralization
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