What is Theta? (THETA)

The Beginner’s Guide

Theta is blockchain protocol that seeks to incentivize a global network of computers to operate a decentralized video streaming platform.

Today, content delivery networks (CDNs), geographically located networks of operators, are paid to deliver video stream content to end-users. Due to being restricted by their locations, existing CDNs can’t keep up with increasingly high-quality streams.

Theta allows its global pool of users to relay videos by offering their spare bandwidth and computing resources and rewards them for doing so.

As more users join the Theta network, more bandwidth is available, thus improving the streaming quality of the videos on the network.

Central to running the operations on its blockchain, Theta boasts two native cryptocurrencies, THETA coin, for voting on changes to the protocol, and TFUEL, for executing transactions.

Theta is also open-source. It claims that this increases the potential for anyone to create new applications and services on top of it.

What is theta

Who created Theta?

Theta was founded in 2017 by Mitch Liu, who founded startups in mobile gaming and online advertising, and Jieyi Long, who previously worked on VR live streaming technologies.

Notably, Theta’s board of advisers include Steve Chen, YouTube co-founder, Justin Kana, Twitch co-founder, and Rakuten Viki and CJ Hello, senior executives from Verizon.

The Theta team held a private token sale in 2017, raising the equivalent of $20 million by selling 30% of the 1 billion unit supply of its THETA cryptocurrency.

How does Theta work?

Theta is a network powered by three groups of participants:

Enterprise Validator Nodes – Companies who stake THETA tokens for the right to process transactions on the network. Current Validator Nodes include Google and Samsung.
Guardian Nodes – Users who perform work to ensure that the transaction blocks proposed by the Enterprise Validator Nodes are accurate.
Edge Node – Users who either share their bandwidth or relay video streams over the Theta network in return for TFUEL.

The Theta network also allows developers to build decentralized applications on top of its blockchain. Examples include royalty distribution applications and crowdfunding mechanisms.

Theta network users can download an official Theta Wallet app to hold or stake their THETA and TFUEL tokens.

Theta also has built a micropayment system for video streaming purposes that allows content viewers and creators to send and receive THETA via the official wallet app.

Modified Byzantine Fault Tolerance (BFT)

Central to Theta is the modified BFT, a proof-of-stake (PoS) governance mechanism that keeps the distributed network of computers running Theta Network in sync.

Theta’s consensus mechanism differs from traditional PoS in that both validator and guardian nodes participate in the consensus mechanism, adding an extra level of security to the protocol.

These nodes must stake THETA tokens in order to help power the blockchain, produce blocks and vote on changes. Validator nodes are required to stake a minimum of 10,000,000 THETA while Guardian Nodes need to only stake 100,000 THETA.

Of note, voting power is determined by the amount of THETA staked.

Why does THETA have value?

THETA is the cryptocurrency powering the Theta Network and it can be staked by those wishing to become Validator or Guardian nodes.

THETA allows nodes to validate transactions, produce blocks, vote on changes to the network and earn TFUEL as a reward.

Further, TFUEL is used to pay for transactions on Theta and is used as the micropayment currency when users pay Edge Nodes for sharing a video stream.

Lastly, developers wishing to publish a new application on the Theta Network use TFUEL for the deployment and operations of their smart contracts.

Like many other cryptocurrencies, the supply of THETA is limited, meaning that according to the protocol's rules, there will only ever be 1 billion THETA.