The Long-Term Bullish Case for TRON (TRX)

TRON (TRX/USD) is an ambitious project. Just like Cardano, it is in the early stages of development with little to show for. Thus, if you’re interested to buy the altcoin, know that TRON won’t likely reach its fullest potential in the next five years or so. For those who can wait, this presents an amazing investment opportunity.

Justin Sun, the founder of TRON, created the cryptocurrency to disrupt the global entertainment industry, which is currently worth $1 trillion. Using blockchain technology, Sun envisions a decentralized network that cuts out the middleman (Google, Facebook and YouTube). This enables content producers such as app developers and video creators to receive payment directly from their audience. This is a lofty aspiration so the next logical question is whether TRON can execute on it.

To answer this question, we looked under the hood of TRON and what we saw was promising. The altcoin’s robust and scalable blockchain along with its attractive compensation models can actually steal the thunder of Internet giants like Google, Facebook and YouTube. In addition, data privacy issues can make TRON a viable alternative as a content creation platform.

In this article, we present the long-term bullish case for TRON.

Robust and Scalable Blockchain

Even though TRON is in the early stages of development, it has already built the foundation robust enough to tackle the colossal global entertainment market. An altcoin that seeks to disrupt a trillion-dollar industry must be able to handle thousands, if not tens of thousands, of transactions per second at breakneck speeds with zero transaction fees. That’s TRON in a nutshell.

In a tweet, Justin Sun revealed TRON’s capabilities by comparing them against Ethereum’s (ETH/USD). Sun claimed that TRON can handle 10,000 transactions per second (TPS) in contrast to Ethereum’s 25 TPS. Also, TRON charges zero transaction fees.

TRON vs. Ethereum

Source: Twitter

In addition, a 2018 Abitgreedy article studied the transaction speed of various cryptocurrencies and discovered that TRON takes an average of five minutes to complete a transaction. At that point, TRON handled 1,500 transactions per second. With optimizations that brought the TPS up to 10,000, TRON should be able to complete transactions in a minute or even less. Our computation appears to be right on the money.

Users expressed their excitement on Twitter over TRON’s surprising transaction speed.

TRX Twitter reactions

Source: Blokt

With the technological foundation in place, the next challenge for the cryptocurrency is to attract content producers to use the decentralized network. This is where TRON truly shines.

Attractive Compensation Models

Centralized systems like YouTube have absolute control on how much they pay content creators. It’s even worse on Facebook where you don’t make a single cent for your content while the company generates nearly $17 billion in revenues a quarter. Censorship is also a big issue because these internet titans can shut you down for good and take away your source of income.

In other words, content producers are at the mercy of tech giants. This is what TRON wants to change.

As mentioned, the cryptocurrency was created to eliminate the middleman. When you do that, money, in the form of TRX, flows from consumers directly to producers. No one, not even the TRON network, takes a cut out of your income. Here is where it gets very interesting to content producers.

Currently, a YouTube star can earn as much as $18 per 1,000 views from ads. That number should be a lot higher but YouTube keeps 68% as profits.

If you’re selling your app on Google Play or Apple’s App Store, you only receive 70% of the payment. The giants take 30% as profits.

If you’re an instructor, uDemy takes as much 50% of the profits for every user who enrols in your online course.

The charges are ridiculous. If you’re a content creator, it is a no-brainer to move your operations to a platform that allows you to keep 100% of your revenues.

Content Control With TRON

Also with TRON, you are in control of how you want to charge your customers. You can create premium content for fans who want to support your work. Viewers can unlock premium content on a per-post or subscription basis. On top of that, the video below shows the wide array of possibilities on how content producers can earn using the TRON network.

https://www.youtube.com/embed/RtqMcU3F93A  

This model can apply to all types of digital content including podcasts, ebooks, photos, etc. With the recent acquisition of BitTorrent, even seeders can get rewards from file sharing.

This is the TRON envisioned by Justin Sun: an ecosystem where content creators get all the rewards for the value they bring. As a long-term investor, you begin to understand how the demand for TRON can exponentially grow as more content creators flock into the network.

Uproar on Data Privacy

With the emergence of blockchain technology, centralized systems like Facebook are shooting themselves in the foot by leaking or selling user data. For instance, the Cambridge Analytica scandal, where data of 50 million users were harvested without consent, revealed that user data can be easily accessed on social media channels. As a result, trust in Facebook’s commitment to data privacy plunged by 66%.

Confidence in Facebook’s data privacy measures

Source: CNBC

In addition, a recent leak exposed hundreds of millions of Facebook and Instagram user data including account names, IDs, and even passwords. These types of events have led 90% users polled to be very concerned about internet privacy.

It’s clear that people are alarmed about online security but many feel powerless to do something about it. This is where TRON can come in and lure users away in massive numbers from centralized systems.

In a recent interview, Justin Sun talked about the implementation of zk-Snarks to TRON’s ecosystem. With this upgrade, TRX users have the option to shield their transactions. This protects user data by keeping transactions private. In the podcast, Sun quipped:

Justin Sun quote on data privacy

Source: Cryptoglobe

With shielded transactions, Justin Sun has put TRON in a great position to be a viable alternative for those who are fed up with centralized networks mishandling or selling data for personal gain.

Bottom Line

TRON may be in the early stages of development but it is positioning itself to disrupt the $1 trillion global entertainment industry. With a robust and scalable network, TRON has the ability to handle tens of thousands of transactions per second. This lays the groundwork for millions of content producers to leverage the TRON network and provide value to consumers while keeping 100% of the profits. As the final nail in the coffin of centralized systems, TRON has implemented shielded transactions to keep user data private.

As a long term-investor, you have to understand that the business models of tech giants like Facebook and Google are not sustainable. Whether fueled by greed (100% income) or frustration (data privacy), there will likely be a mass exodus of users from centralized systems into new platforms that effectively tackle these issues. This is our long-term bullish case for TRON.

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.