What is TRX

The Beginner’s Guide

Launched at the height of 2017’s crypto mania, Tron has since galvanized a global group of investors and developers around a vision for how cryptocurrencies could reshape the internet. 

But if the goal of using blockchains to create a distributed web was common among projects launching at the time, Tron distinguished its offering with communications that resonated, even as criticisms about its technology persisted. 

For instance, Tron was rare among cryptocurrencies launching in 2017 in that it did not seek to advertise any advances in cryptography or network design. 

Rather, the basic building blocks of Tron – decentralized applications, smart contracts, tokens, delegated proof-of-stake consensus – were pioneered by other projects prior to its launch. Tron even went so far as to make components of its technology compatible with Ethereum (ETH) (which sparked accusations it went too far in borrowing its ideas).

Tron would further differentiate with an Asia-focused go-to-market strategy that heavily relied on publicizing its creator Justin Sun and translating its technical documents into a wider variety of languages than generally targeted by cryptocurrency projects. 

Tron went on to gain greater mainstream attention in 2018 when the non-profit spearheading its development, the Tron Foundation, acquired peer-to-peer networking pioneer BitTorrent. 

This acquisition preceded the launch of a BitTorrent token on the Tron blockchain in 2019, a move that gave Tron the ability to market a new cryptocurrency to millions of existing users.

How does Tron work?

Initially created as a token based on Ethereum, Tron finally migrated to its own network in 2018. 

The process involved investors trading in their ethereum tokens for Tron’s TRX cryptocurrency. (The ethereum tokens were subsequently destroyed.)

General Architecture 

Like Ethereum (ETH), Tron uses an account-based model, meaning the cryptographic keys its protocol issues can control access to both TRX and TRX token balances.

The Tron blockchain then routes the exchange of this data through three layers: 

Core Layer – Computes instructions written in Java or Solidity (a language designed for Ethereum) and sends them to the Tron Virtual Machine, which executes the logic.

Application Layer – Utilized by developers to create wallets and applications powered by the TRX cryptocurrency and compatible with the software.

Storage Layer – Designed to segment blockchain data (the record of the blockchain’s history) and its state data (which preserves the status of smart contracts). 

Delegated Proof-of-Stake

To reach consensus on its ledger, Tron uses a system in which a rotating cast of 27 “super representatives” are entrusted to validate transactions and maintain the system’s history. 

Super representatives are chosen every six hours, and if chosen, earn the ability to collect new TRX generated by the protocol. 

Blocks are added to the blockchain every 3 seconds, and those who produce a valid block are awarded 32 TRX for their efforts. A total of 336,384,000 TRX is awarded annually.

In addition to super representatives, users can operate three types of nodes on the Tron blockchain – witness nodes, full nodes and Solidity nodes. Witness nodes propose blocks and vote on protocol decisions, while full nodes broadcast transactions and blocks. 

Solidity nodes sync blocks from full nodes and provide APIs.

More details on the network’s block production and super representatives can be found here.

Staking TRX on Tron

To vote on super representatives, Tron users need a network resource called “Tron Power.” 

Users receive 1 Tron Power for every 1 TRX they chose to “lock” in an account that is prevented from spending its associated cryptocurrency. (Upon unfreezing the cryptocurrency, users lose their Tron power and the ability to vote). 

Tron Power cannot be traded like TRX or other tokens issued on top of the Tron blockchain. 

Effectively, the process works the same as staking on blockchains like Tezos or Cosmos, where users earn rewards by locking up funds. (Note: Be aware, this may not be possible using a custodial exchange like Kraken).