Neflix, Hulu, and Amazon Prime are big names that have shaped today’s global video streaming industry. Now Theta, a blockchain-based software protocol and cryptocurrency platform, aims to create decentralized video-streaming that could disrupt those models.
With Theta, video content delivery is faster because computers on the network can harness their combined power for greater efficiency. Theta also lowers the cost of content delivery. The streaming industry is expected to grow by over 12% to $932 billion by 2028 from $419 billion in 2021, and Theta may have a big role to play.
THETA coin is the governance coin that enables users to vote on changes to the protocol; TFUEL is a native token for executing transactions.
This article takes a look at Theta, its potential as a disruptor in live-streaming technology, how THETA coin and TFUEL crypto work, and why they might be of interest to investors.
How Does Theta Work?
Content delivery networks (CDNs) like Netflix and Hulu, are restricted geographically, and many are finding it difficult to meet the demand for high-quality streaming. Theta has a global pool of users with spare bandwidth, and they are rewarded for joining the Theta network and sharing their computer power. As more users join, there is more bandwidth, and the streaming quality of videos improves.
The current, centralized live-streaming platforms act as a middleman between content creators and their audiences. One of the key concepts behind Theta is to cut out the middlemen to lower costs for consumers and provide higher revenues for content creators.
The network runs on its own blockchain, but it also has two native cryptocurrencies, THETA coin and TFUEL. Theta crypto enables changes to the protocol, and TFUEL is a gas token used for executing transactions.
Theta uses a peer-to-peer (P2P) protocol to help participants who engage in content sharing (or distribution in general) get paid for it in real-time. Because Theta is an open-source project, users can build decentralized applications, or dapps, as they can on the Ethereum network.
Theta blockchain has three types of nodes — Edge Nodes, Guardian Nodes, and Validator Nodes.
• Edge Nodes: Those who stream and share their Internet speed with Theta.tv. Edge nodes are paid in TFUEL for their contribution.
• Guardian Nodes: Users who ensure that the transaction blocks proposed by the Validator Nodes are accurate.
• Validator Nodes: These are companies that stake Theta coin to gain the right to process transactions on the network. Google, Samsung, Sony, and others have all staked at least one million Theta to do so.
Theta uses a proof-of-stake (PoS) consensus mechanism called modified Byzantine Fault Tolerance (BFT), which is different from traditional PoS systems. Under the modified BFT system, validators and guardians work together to verify transactions and keep the network in sync, a process that may ensure greater security.
Advantages and Disadvantages of Theta
To recap, let’s consider some of the pros and cons of the Theta platform and THETA crypto.
With Theta, computers on the network can harness their combined power for greater speed and efficiency in video streaming. This decentralized system may help lower the cost of content delivery.
Also, Theta uses a proof-of-stake (PoS) consensus mechanism that is based on collaboration between nodes and may keep the platform more in sync and therefore more secure.
Theta is an open-source project, so users can build decentralized applications, or dapps, as they can on Ethereum.
With board members from companies that are known to be industry leaders, Theta technology is well-positioned to impact the streaming industry.
Some of the platform’s primary disadvantages have to do with THETA crypto. The distribution of coins is more centralized because the original sale of tokens was not open to the public. This raises questions about the economics of how Theta crypto can increase in value as people join the network. About 30% of the tokens are owned by early-stage investors, and if they were to cash out it could negatively affect the price.
As it stands, Theta has relatively low volume and liquidity. So it’s possible that another decentralized system could emerge that uses Bitcoin, say, which is high volume and high liquidity, rather than the less-liquid Theta token.
• Decentralizes video streaming, enhancing speed and efficiency.
• Theta coin distribution is more centralized, which could impact value
• Potential to improve quality and cut streaming costs by 80%.
• Relatively low liquidity
• Open-source protocol allows for dapp development.
• Competitors could emerge
Who Created Theta?
Theta was founded in 2017 by Jieyi Long, a virtual reality and live-streaming expert, and Mitch Liu, an entrepreneur who founded startups in mobile gaming and online advertising. The two created a website, Theta.tv, where visitors view content and get paid in TFUEL.
Theta’s board of advisers includes digital communications royalty with names like Steve Chen, co-founder of YouTube; Twitch co-founder Justin Kan; Jonathan Wong, director of product at Rakuten Viki; and Kyle Okamoto, chief network officer at Verizon Digital Media.
Why Does THETA Have Value?
First, Theta can be staked by users who want to join as Validator or Guardian nodes on the network. The more you stake, the more voting power you have.
Theta can be traded for many other digital currencies. And by investing in Theta you are investing in the network’s potential to make an impact in the video-streaming world.
Judging by the growth in the streaming industry Theta should continue to attract investors, barring any serious competition. A recently awarded patent to Theta Labs for the decentralized CDN model may help solidify its position as a successful entrant in this space.
Price of THETA
As of Feb. 23, 2022, Theta was the 43rd largest crypto. It has a value of $2.77 with a total market cap of $2.76 billion and a circulating supply of 1 billion. In April of 2021, Theta reached an all-time high of $14.38.
Why Use THETA?
The Theta platform, and therefore THETA crypto, could be fueled by the growing markets for digital media and online video games. If so, there could be significant long-term potential for investors. It’s likely that today’s internet will not be fast enough for future demand with 8K streaming, multiplayer synchronous video-gaming, and immersive augmented and virtual reality experiences.
Although CDNs on centralized networks can compensate for a while, decentralized networks may avoid the problem of internet outages.
Theta’s decentralized network means that anyone can become an edge node and contribute computing power to the network. If one edge fails, there are many others still in the network that can keep the network up and running.
Another reason to consider THETA’s value is its partnerships with companies that focus on e-sports, an industry that is seeking faster internet speeds for sports streaming.
That said, the future of streaming is very hard to predict; and it’s impossible to say which technologies may gain the upper hand with users. The advent of Web3 innovations, which are gaining traction, could be a gamechanger in this space.
How Can I Buy THETA?
Buying Theta (THETA) can be harder to find than other types of crypto, so you may have to do a little research. Be sure to review how crypto exchanges work, and make sure the exchange you choose allows trades in the cryptocurrencies of your choice.
Step 1. Choose an exchange and fund your account.
Once you’ve set up an account on an exchange, you can fund your account with a wire transfer from your bank, or even with a credit or debit card transfer (but check with your bank in the case of restrictions. Fees may apply.
Step 2. Set up a wallet to store your assets.
Just as you might keep money in a physical wallet, cryptocurrencies are held in digital “wallets.” Your wallet is essentially a contractual agreement via the blockchain that you own X amount of THETA or other crypto. (More on how to store your crypto below.) Be sure to select a crypto wallet that supports THETA.
Note that some crypto exchange accounts come with a custodial wallet.
Step 3. Trade THETA!
After you’ve funded your account, you can start trading. Once you’ve executed the trade, you can transfer your holdings to your wallet, unless your exchange provides you with a custodial wallet. You may want to leave your holdings there if you plan to keep trading.
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Similar to trading securities, there are crypto fees to consider when trading crypto. Be sure to understand all the associated costs that may come with trading crypto on one platform versus another, or using one form of payment versus another.
How to Sell THETA
Once you’ve decided to sell your THETA, the next step is deciding whether you plan to cash out for a fiat currency like U.S. dollars (USD) or trade another type of crypto.
Step 1. Decide what to trade.
If you’re exchanging THETA for USD, the steps may be different than if you’re buying another form of crypto like BTC, ETH, DOT, ADA, etc. Also, some exchanges may not do a direct trade from THETA to USD — or they may require you to complete a more extensive KYC identification.
Step 2. Find the best price.
Crypto prices fluctuate by the minute, so do your research beforehand so you know a good offer when you see one.
Step 3. Make the trade.
Complete the trade and move your crypto (or cash) to your wallet, unless you plan to keep trading on the exchange.
Step 4. Keep taxes in mind.
Remember that crypto gains are subject to taxes. Be sure to consider the tax implications of selling Theta coin, and consult a professional as needed.
Does THETA Have Staking?
THETA can be staked; in fact, that’s where its value lies. Users need at least 1,000 Theta coins to stake. Once you have 1,000 THETA in your wallet, you can stake up to 10,000 and be rewarded with TFuel tokens.
Theta’s open-source, decentralized blockchain may meet growing demand for faster and better-quality live streaming. It’s possible that blockchain technology could potentially disrupt the systems architected by current industry leaders. But the rise of Web3 technology introduces a swath of new factors that make it hard to predict who the leaders will be in future.
Theta can also be valuable to investors because users can stake the crypto in order to earn rewards.
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