- Theta was launched in 2017 by Mitch Liu and Jieyi Long.
- Theta is both a blockchain and decentralised high-quality video streaming platform that allows users to share unused bandwidth with each other.
- Since its launch, the network has garnered institutional adoption from the likes of Google and entertainers (like Katy Perry) using the network to create content.
- Unlike other Proof of Stake (PoS) networks, Theta incentivises various types of participation. Users are not limited to staking as a way to earn rewards. They can share bandwidth and resources, or create content.
Streaming has taken over the Internet.
With an estimated 82% of global internet traffic coming from video streaming, more people than ever are choosing to consume video over other forms of content. But the infrastructure of the internet hasn’t adapted to meet the needs of today’s users and their growing demand for high-quality content at near-instant load times.
Using blockchain technology, the creators of Theta believe they have found a solution where anyone can stream high-quality media from anywhere in the world.
Does their idea stack up? Let’s uncover what the Theta network is, and how its unique incentive structure could actually solve the Internet’s bandwidth problem.
What is Theta?
When users want to stream a video over the Internet, a number of factors could affect its quality. Bandwidth, server proximity, and even the time of day are just a few things that could send an HD video down to choppy, standard quality.
Content delivery networks (CDNs) are being pushed beyond their limits to consistently deliver high-quality content, to a high volume of users.
That’s what Theta wants to change.
Founded in 2017 by Mitch Liu and Jieyi Long, Theta is a decentralised blockchain built for the new era of Web3 video, media, and entertainment. It optimises high-quality video streaming for a global audience.
Theta achieves this through an incentivised network of computers, that rewards participants for sharing unused bandwidth and other computing resources with the wider network. As more users join Theta and willingly share their spare bandwidth, the network’s overall available bandwidth increases. This should improve the quality of all videos hosted on the network.
Outside of this, the network has two native tokens. THETA is for governance and TFUEL is mainly used for paying transaction fees on the network. It’s also open-source, opening up the possibility for building future decentralised services and applications (DApps) on the network.
What is THETA Token?
THETA is the network’s utility token.
It functions as a governance token, whereby users can use THETA to vote on proposed changes to the network.
The max supply of THETA is capped at 1 billion and will never increase. At the time of this writing, all coins are in circulation.
What is TFUEL?
TFUEL is Theta’s infrastructure token. TFUEL is rewarded to any users who contribute positively to the network. This includes:
- Validators who help to secure the network
- Users who contribute their spare bandwidth to the wider network
- Participants who assist in relaying video streams to other users
The token is also used by network participants for tipping content creators and for purchasing premium content.
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How Does Theta Work?
Theta operates as a dual network. The Theta Blockchain is the open-source infrastructure where transactions and staking occur, and security is maintained. The Edge Network is the user-facing platform that delivers media assets to viewers.
By moving content delivery from a centralised server to a peer-to-peer network, Theta aims to reduce the cost and resources needed to consistently deliver high-quality video content. It plans to achieve this through a unique consensus mechanism to uphold security and tokenomics that incentivise every type of participant on the network.
The Theta community consists of the following platform and blockchain participants.
- Content Creators: Produce media content on the network
- Advertisers: Place ads on the platform and sponsor content creators
- Viewers: Consume content and tip creators
- Nodes: Computers or servers that work to improve video quality, resolution, and delivery speed
Modified Byzantine Fault Tolerance (BFT)
To maintain network security, the Theta blockchain uses a Modified Byzantine Fault Tolerance (BFT), which is a type of Proof of Stake (PoS) consensus mechanism the Byzantine Generals Problem in a decentralised network.
The Byzantine Generals Problem is a logic puzzle that highlights how difficult it is for decentralised parties to completely agree on a consensus without the help of a trusted, central party. In the puzzle, four army generals must mutually agree on the next move to make against the enemy without ever making direct contact with each other.
Theta’s consensus protocol is slightly different from a traditional PoS system. Validators propose and process transactions on the network. Guardian nodes act as an extra layer of security, ensuring that any blocks proposed by validators are accurate.
Both node types are required to stake THETA in order to participate in consensus. Validator nodes (typically companies or enterprises) need to stake a minimum of 200,000 THETA, whereas Guardian nodes (individuals or smaller enterprises) only need to stake 1,000 THETA.
Similar to other PoS blockchains, those who stake more hold proportionately more voting power when confirming block accuracy.
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After validators propose and process new blocks of transactions they are then checked for accuracy by 1000s of community-run Guardian nodes. The nodes monitor the network for malicious activity or non-functional Validator nodes. They are rewarded for successfully and accurately verifying transactions.
These users/nodes are the backbone of the Theta Edge Network, a decentralised platform for data storage, delivery, and smart contract execution.
Edge nodes are rewarded in TFUEL for sharing their unused bandwidth or relaying video streams to viewers on the platform.
At the time of this writing, the network consists of over 130,000 nodes globally.
How is Theta Different From Ethereum?
Both the creators of Theta and Ethereum want to leverage blockchain technology to solve real-world problems.
Ethereum acts as a platform of possibility, similar to a computer. A computer doesn’t solve problems on its own but can become a powerful tool when in the right hands.
Ethereum gives its users the tools and infrastructure to participate in trustless transactions. And it allows developers to build their own systems and services on the network. By making the blockchain more accessible for everyone, Ethereum hopes it will become a Web3 hub for the creation of useful applications that solve real-world problems.
The creators of Theta are focused on trying to solve one very specific problem: affordable, accessible, high-quality decentralised video streaming.
While Theta is open source like Ethereum, allowing users to create and develop apps and services, its primary goal is to optimise video content, ensuring that anyone worldwide can access high-quality video through peer-to-peer bandwidth sharing.
Advantages & Disadvantages of Theta
Theta is aiming to disrupt the video streaming industry, growing a respected reputation since its launch in 2017. Let’s look at why proponents find Theta valuable, as well as some issues that the project is currently dealing with.
- Decentralized Video Streaming: The network is unique in that it's the first decentralised video streaming platform. Decentralising content delivery could lead to enhanced streaming speed for all viewers on the network, reducing the load the traditional CDNs experience when relaying video.
- Low Cost, High Quality: Not needing to rely on a centralised server to deliver video could reduce the costs of streaming in the long term. Viewers plagued by low quality would not have to pay a corporation for more bandwidth/network speed. Viewers who don’t have the local infrastructure to facilitate HD streaming consistently could rely on the shared bandwidth on Theta.
- Open-Source: Theta is also open-source, allowing developers to create DApps and solutions for the media and entertainment industry. This is facilitated through the use of smart contracts.
- Industry Partnerships: Theta has gained the support of industry leaders like Google and Samsung, along with mentorship from co-founders at YouTube and Twitch. Media personalities like Katy Perry have released NFTs on the network, all of which could help accelerate network adoption.
- Staking: For a fee, users can earn rewards by participating in securing the network. Validators propose and process transaction blocks and Guardians work to confirm their accuracy. Nodes are rewarded for their activity in TFUEL.
- Incentivised Participation: Users are not limited to staking as a way to earn rewards. They can share bandwidth, relay streams to others, and potentially earn TFUEL through content creation. With multiple reward streams, users are incentivised to regularly participate in maintaining the network.
- Centralisation Concerns: While the network itself is decentralised, Enterprise Validators nodes are large, centralised corporations. There are also only 20-30 validator nodes in total. With this much validating power concentrated among a handful of corporations, is it extremely important for Guardian nodes to remain community-run and not tied validators in any way.
- First to Market: While Theta is the first decentralised video streaming platform, there could be competitors that emerge to challenge its status. Theta will need to continue to grow its base of users while proposing new features to improve the network.
Who Created Theta?
In 2016, Mitch Liu and Jieyi Long joined forces to form Theta Labs. Liu with his background in gaming startups, along with Long's experience in VR live streaming, started developing a blockchain video streaming solution.
In November 2017, Liu and Long announced Theta and the launch of its native token through Medium. The pair eventually released a whitepaper that outlined how the network would work as a distributed video streaming platform.
The small team held a private THETA sale later that year, selling 30% of the total supply to various entities and individuals ($20 million at the time) as an ERC-20 token. The token was later publicly released for trade in 2018.
That following year, the Mainnet launched allowing users to stream high-quality content and share their unused bandwidth for rewards. Previous holders of the ERC-20 token were given THETA at a 1:1 ratio.
A Brief History of Theta
2016 Mitch Liu and Jieyi Long form Theta Labs. Blockchain development begins 2017 Liu and Long announce Theta. 30% of the THETA token supply is sold across various private sales as an ERC-20 token. 2018 THETA is publicly released for sale across crypto markets as an ERC-20 token. 2019 Theta Mainnet 1.0 goes live. 2020 Theta Mainnet 2.0 goes live, expanding the capabilities of the Edge Node Network 2021 Mainnet 3.0 releases in July, introducing smart contract capability. 2022 Mainnet 4.0 went live in December. It introduced horizontal scaling to the network through a multi-layered, multi-chain solution. Its whitepaper explains:: “Each platform or Web3 business can have their own subchain that is highly customizable and comes with the transparency, security, and credibility of a public blockchain.”
The Simple Way to Buy, Sell and Store THETA & TFUEL in 2023
The easiest way to buy THETA or TFUEL is through a brokerage like Caleb & Brown. We make purchasing Theta assets easy and accessible whether you use fiat currency or crypto. Trusted by over 21,000 investors across 100 countries, our dedicated team of experts works around the clock to carry out all your crypto trades. If you’re ready to dive in and make your first THETA or TFUEL purchase, open an account with us for free today.
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Selling your Theta assets with Caleb & Brown is as simple as buying. You can sell or swap your assets for any of the 100s of assets available through our brokerage.
Should you decide to exchange your THETA or TFUEL for fiat currency, there are $0 withdrawal fees as well.
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There are multiple ways of storing Theta assets, from a cold wallet, hot wallet or with a custodian. Individual risk tolerance and preferences will determine the method employed by most users.
Many of these storage methods can seem complex, especially if you are not tech-savvy. Caleb & Brown provides end-to-end custody solutions for hassle-free storage and peace of mind investing. We have a battle-tested security infrastructure, through the leading asset security platform Fireblocks. All clients receive a free security consultation to ensure they follow security best practices.
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What’s News For Theta?
Theta’s Mainnet 4.0, also known as The Metachain, launched on December 1, 2022.
This upgrade focused on introducing scalability and interoperability to the network. For the first time ever, it allows users to create, operate, and manage their own subchains. This ecosystem also uses the new TNT20 token for governance and transactions.
With this new structure, Theta could potentially host an unlimited number of subchains.
Why does THETA have value?
THETA maintains its value as a governance and staking token. Holders of THETA can use it to vote on proposed changes to the network. They can also stake the token for rewards.
Why does TFUEL have value?
TFUEL maintains its value as a reward for network participation. Users can earn TFUEL through staking, sharing bandwidth, or relaying video streams. It is also a microcurrency exchanged between viewers and creators. Lastly, TFUEL is also needed to create and execute smart contracts.
How is the Modified Byzantine Fault Tolerance (BFT) different from a traditional Proof of Stake model?
Theta’s consensus mechanism is slightly different from a traditional PoS.
Transactions proposed by validators go through an additional stage of review by individual, permissionless Guardian nodes. Having this extra step of security works to ensure bad actors are quickly discovered and removed from participating in the consensus process.
Invest in THETA With Caleb & Brown
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If you are ready to take the next step and invest in THETA or TFUEL, contact your crypto broker today.
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Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided.