Crypto News & ICO Reviews
This weekend, Binance founder Changpeng Zhao lauded Tron on Twitter for bringing a crypto-powered business model to the storied file-sharing software it bought last summer, BitTorrent.
“The grandfather of Dapp[s] finally finds its decentralized currency and business model. Should be a very interesting case study.”
Zhao’s tweet yielded over 100 retweets and over 500 likes, and a decent thread of comments following what he had to say. Many responders seemed to jump to the conclusion that Tron would make BitTorrent a paid service. Instead, it’s giving users an option to spend some crypto – the new BitTorrent Token (BTT), to be precise – to improve their user experience.
The BTT white paper (PDF) promises a broad universe of possibilities, according to a review by CoinDesk. “By introducing a mechanism for value storage and exchange we aim to greatly broaden the universe of possible participants – either service requesters, service providers or both,” the document reads.
As for whether BitTorrent would move to a paid model, the white paper addresses this directly: “Participation in the BTT transactions is required to be both fully disclosed and optional for end users.”
The more substantive critiques of the move generally argued that BitTorrent wasn’t anything but a decentralized exchange for pirated material. The BTT white paper, however, argues that the protocol could find more uses with a token:
“Optimizing the existing BitTorrent protocol is an obvious first step in the introduction of a cryptographic token but it barely scratches the surface of what is rapidly becoming possible.”
The entities behind BTT – Tron and the BitTorrent Foundation – envision three core business lines that could potentially be decentralized via BitTorrent if a value instrument were to be built into it: content delivery, file storage and privacy-protecting proxy services.
While the list isn’t exhaustive, it hits a lot of the same categories that the Telegram Open Network listed for itself as well. Further, Elaine Ou, a blockchain engineer and Bloomberg opinion contributor, has blogged about past attempts to tokenize bandwidth and data storage (spoiler alert: they haven’t worked out in the past).
Regardless, these new BitTorrent activities still run up against the initial friction for existing BitTorrent users: they have become very accustomed to the protocol delivering its services for free.
That said, the white paper goes to great lengths to explain that it’s not actually free. It contends:
“The system essentially implements a barter economy where individual clients collaborate based on trading pieces of a file they each are trying to download, with delivery bandwidth used as the deciding factor for whom to keep bartering with.”
Civilizing the BitTorrent economy
With the BTT white paper, the company wants to make it clear: BitTorrent users have always paid for their downloads – they pay with bandwidth.
It’s been a barter economy. Just as with the human economy, the idea is that, by adding a fungible token into this barter system, the economy can expand to the benefit of everyone in it.
BitTorrent works by breaking files into lots of parts. So the first piece a user downloads becomes available to another user who wants the same file, but hasn’t downloaded that piece yet. That’s called a “seed.”
It doesn’t always work out fairly, though, as the white paper explains:
“Due to bandwidth asymmetry, files frequently complete downloading long before a peer has been able to upload an equivalent amount of bytes.”
This means that some users can get a partial free ride. If too many of the users sharing and downloading the same file shut their BitTorrent clients down after they have completed their download, it can disrupt a swarm and lead to user-experience gaps.
As the white paper points out, the system still works pretty well on balance. People can generally get whatever they want on BitTorrent because there are so many users.
Still, the company thinks adding a token could make it work just a little better, and grow the service even larger.
Either way, though, a major goal for Tron here seems to be turning a huge user base of decentralized internet users into crypto users, so it can win the adoption game.
Ash Egan, who takes the lead on blockchain and crypto at Accomplice VC, told CoinDesk that he saw the acquisition as a bid by Tron for legitimacy.
“BitTorrent has been well respected and stress tested for 15 or so years,” said Egan. “What better way to legitimize themselves than to make an acquisition of that stature?”
That stature includes a large user base. BitTorrent, which first launched in 2001, claims 100 million people use its protocol each month. The white paper makes clear that Tron and BitTorrent plan to leverage those users to bring people around to using crypto:
“While many new decentralized protocol proposals are suggesting ambitious technical paths forward, almost all are silent on how to address the enormous marketing challenge of building critical mass which is a crucial technical necessity for all distributed systems.”
Crowdsurfing image via Shutterstock/Christian Bertrand