What is Theta Fuel (TFUEL)? How does it work in the Theta Network?
While many developers focus on revolutionising financial services with decentralised finance, Theta Labs, Inc. spotted a unique problem that touches the fabric of our daily lives — video content distribution.
Founded by a team of engineers with experiences in the creative and gaming industry, and guided by an advisory board consisting of media experts, including the co-founders of YouTube and Twitch, Theta Labs has achieved milestones to fully develop their project, the Theta Network.
Theta Fuel (TFUEL) is the native cryptocurrency that powers the Theta Network. What is Theta Fuel and how does it work? Before we get into the cryptocurrency, it’s important to know about what the Theta Network is, and what problems they are trying to solve.
If you would like to skip over to the explanation of TFUEL, click here.
What is the Theta Network?
In a nutshell, the Theta Network is a blockchain-powered network of peer-to-peer video content distributors.
The Theta Network is not a video streaming platform, but rather acts like a revamped version of the traditional content delivery network (CDN). In this network, users are incentivised to share their unused or excess bandwidth to relay video content or streams to another user within geographic proximity. This can be done while the user is streaming the said content.
The network was not built to compete against online video streaming platforms like YouTube, Netflix, Amazon Prime, or Twitch, but rather it is designed to help them cut costs, and reduce or even eliminate the middlemen of the industry.
“I’m excited to be part of the next evolution of the streaming space, helping Theta create a decentralized peer-to-peer network that can offer improved video delivery at lower costs”.Steven Chen, co-founder of YouTube
It is therefore possible for content creators, content publishers, viewers, and advertisers to benefit from a decentralised content delivery network. With Theta Network, quality video streams can be distributed at a fraction of the normal cost.
Theta Fuel (TFUEL) is Theta Network’s native cryptocurrency. Most people think of Theta Fuel as something that powers the network, but there is more to the network than exchanging TFUELs. Read more about TFUEL in the upcoming sections.
Invest in the Theta Network: Click here to buy THETA.
What problems does the Theta Network attempt to solve?
Unknown to a majority of people, the current system of content delivery is inefficient. The current model looks something like this:
1. Content creators use their resources to create videos or other content, and then upload their work on streaming platforms.
2. Streaming platform companies that store content have a limited server bandwidth, and cannot fulfill all content requests from millions of users around the world.
3. Third-party servers, known as Points of Presence (POPs) provide additional bandwidth and reach to relay streams from the company’s owned servers to the rest of its own networks. This comes at a price.
4. Users are able to receive data from POPs, but those who are geographically more secluded, or have not paid Internet service providers the premium for higher bandwidth connections will receive poor-quality streams.
5. In order to stay profitable, streaming platform companies must allow advertisers to pay in exchange for impressions.
6. To control advertising costs, the streaming platform must balance between the number of ads served and user satisfaction, unless users pay a premium for ad-less streaming services.
7. Content creators who monetised their content can enjoy ad revenue only after the platform has paid expenses associated with distributing content through POPs.
Solving the last-mile problem using crowdsourcing
In the Theta whitepaper, the developers have recognised a need to streamline the content delivery process so that both viewers and streaming platforms should rely less on centralised data centers that can only build POPs in a limited number of locations.
This “last-mile delivery problem” is actually commonly found in all kinds of logistical systems, where delivery of any item becomes less efficient when users are far away from central delivery points, or when a large and unexpected demand for delivery can strain the limited bandwidth of the delivery system.
In a crowdsourcing model of logistics, businesses could outsource their delivery in the hands of gig workers who can independently deliver products without having to follow standardised paths that many drivers of logistics companies must use.
The likes of Uber Eats and Amazon Flex Programme have proven that this model is more efficient than centralised delivery procedures, and can potentially eliminate the last-mile delivery problem.
Theta is solving this problem for data delivery. Users who are in close proximity to POPs can stream as per usual, however at the same time they can opt to upload segments of the video data that they’ve received from POPs into the Theta Network.
Different users will likely upload different segments of video data, depending on what is currently available in the network. Other network users can capture various data segments and stitch them together (the computer does it for them; users just have to click the Play button).
If you have exposed yourself to some form of decentralised peer-to-peer file sharing technology, such as BitTorrent, this type of data-sharing protocol may sound familiar to you.
What is Theta Fuel or TFUEL?
One of the member groups that make up the Theta Network are users who relay data across the network, called edge nodes. Other member groups are responsible for the transactional and security layers of the network, but we’ll talk about them later.
Edge nodes are incentivized to give up some bandwidth and computing power to share data to the network, all while users consume the content. The reward for this is Theta Fuel (TFUEL), the native cryptocurrency token that holds value, is exchangeable, and is fungible.
Theta Fuel has no maximum supply limit, and has an annual inflation rate of 5%. This may seem a lot, but TFUEL is one of the cryptocurrencies that are not designed for holding or staking. For the latter purposes, another native token of this network, the Theta Token, is introduced. We will discuss this in greater detail in later sections.
Buy Theta Fuel: Click here to buy TFUEL.
The Token Economy of TFUEL
Now, users who have earned TFUEL can use it in any way they wish — from participating in games, donating to favorite streamers, buying gifts, or simply selling them for fiat currencies. However, TFUEL also plays crucial roles in other areas of the network.
You already know that TFUEL is a reward given to edge nodes (basically, ordinary users) for relaying data, which uses real resources such as electricity and computing power (they can’t run forever).
Who gives the TFUEL in the first place? The answer is: the streaming platform. Streaming platforms ‘pay’ edge nodes in TFUEL as the nodes allow the platforms to bypass the centralised data centers.
Streaming platforms then must have gotten some TFUEL elsewhere. They could purchase them from exchanges, but they can also earn them by hosting various events, games, or open shops to sell Non-Fungible Tokens (NFTs) to TFUEL holders.
Advertisers are also important players in the Theta token economy. Streaming platforms sell advertising space to advertisers in exchange for TFUEL. Of course, viewers can pay some TFUEL to streaming platforms to have better viewing experiences with fewer or no advertising.
In this model, where the costly third-party centralised data center is eliminated, a few great things happen:
1. Viewers can enjoy seamless streaming experiences.
2. Streaming platforms can show fewer ads, while increasing viewer engagement with better streaming services.
3. Content creators can earn tokens from gifts and donations, but can also gain revenue by working together with advertisers.
4. Advertisers can rely more on sponsorship programmes, rather than using disruptive advertising techniques.
5. Streaming is potentially more energy-efficient, since data requests, downloads, and uploads can be done within a tighter cluster of nodes in a certain location.
How to Buy THETA
The Theta Network is a promising cryptocurrency project, and they seem to have delivered far more than what has been promised. For example, having raised $20 million in ICO in January 2018, the project ran and did not lose momentum.
Buying the Theta Token is quick and simple through our platform at Easy Crypto. We offer competitive rates with transparent fee policy to get you the most out of your Theta purchase.
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