What Is Livepeer? (LPT)
The Beginner’s Guide to LPT
Livepeer is a network built on Ethereum for transcoding live and on-demand video.
Livepeer differentiates itself from traditional video streaming services like YouTube by not hosting, storing or distributing video. Rather, Livepeer is building a technology that utilizes excess computing power to more efficiently share video from broadcasters to consumers.
Video streaming is the main source of internet bandwidth use worldwide, with some reports suggesting that it accounts for up to 80 percent of global internet usage. The biggest cost for video broadcasters lies in transcoding, which is the process of converting and reformatting raw video to ensure it can be played across multiple devices and networks, from pocket size smart phones to larger than life billboards.
Livepeer aims to disrupt the video transcoding market by giving broadcasters access to thousands of distributed processors, allowing app developers to create videos within a secure, efficient and affordable architecture.
Central to its ecosystem is the Livepeer Token (LPT) which is used to secure the Livepeer network and coordinate the work responsibilities of those supporting the video encoding process.
Who Created Livepeer?
Livepeer was created in 2017 by Doug Petkanics and Eric Tang.
The Livepeer team did not conduct a token sale to distribute its LPT token. Instead, an initial amount of LPT was distributed between the community, the founders and the early team members, as well as a long term development fund.
How Does LivePeer Work?
Livepeer’s distributed architecture for delivering video content centers around its key role of “orchestrators.” Participants with enough computing power can become orchestrators by dedicating resources to transcode and distribute video on behalf of paying broadcasters and developers.
For example, take an app developer who has created a platform using the Livepeer protocol dedicated to live streaming high school basketball games on demand. The team’s coach who is looking to broadcast the game would simply go into the app and press record, never having to worry about the technical intricacies Livepeer handles behind the scenes.
Meanwhile, Livepeer’s orchestrators, those with excess computer resources, transcode the event for different networks and devices. Orchestrators must first stake Livepeer tokens (LPT) to ensure they perform quality work. It is important to note that while LPT is the protocol token that coordinates how work is distributed on the network, it is not the medium of exchange token to pay for services within the Livepeer protocol.
Livepeer recognizes that not all LPT holders may have the expertise or computing power needed to fulfill the role of an orchestrator. Thus, the “delegator” role was created. Delegators choose to stake their LPT with orchestrators they believe are contributing quality, honest work towards the video transcoding process.
Both orchestrators and delegators earn fees paid by the video broadcasters for their role in ensuring a high quality and secure network. These earned fees, payable in ether, or a stablecoin, such as DAI , are directly proportional to the amount of LPT orchestrators and delgators have staked in the Livepeer protocol. Livepeer also mints new tokens that are shared between delegators and orchestrators every 5760 Ethereum blocks, which Livepeer refers to as a round.
Why Does LPT Have Value?
As the native token of the Livepeer network, LPT is critical for a variety of use cases across its network.
Users may find the censorship resistant nature of decentralized architectures such as Livepeer holds value and stands in contrast to incumbent, centralized services such as Youtube, Twitch and Vimeo. The Livepeer team notes that these services could be subject to pressure from corporations or governments to modify, remove or deny certain videos from being published. However, as a backend technology, Livepeer leaves this responsibility to the broadcasters and application developers that utilize their system.
Additionally, Livepeer’s pay-as-you-go content consumption ethos means that users do not need to pay regular subscription fees towards services they do not use. The Livepeer system also allows content creators to earn more on their creations, as the need for costly intermediaries while sharing videos from broadcasters to end consumers is reduced.
Application developers may also enjoy the benefits of Livepeer. The distributed nature of the network allows them to more efficiently handle network usage spikes on their applications and reduce the need for more expensive transcoding services while scaling videos for a variety of devices and networks.
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Why Use LPT?
Investors may want to consider purchasing LPT if they are interested in contributing towards a distributed approach to video sharing and media as an orchestrator. Its decentralized design would allow them to utilize their idle computer resources.
Because Livepeer uses a different part of the GPU, miners using graphic cards to mine on other blockchains such as Ethereum could earn additional income from devoting their previously unutilized GPU capacity to video transcoding with Livepeer.
Those wishing to support orchestrators delivering transcoding services, while also earning passive income on their tokens through staking, may find value in LPT and the delegator role as well.
Investors that see the potential of the Livepeer use case may also be interested in buying LPT and adding it to their portfolio to have a say in the future adoption of decentralized, peer-to-peer video networks.