As meme friendly Dogecoin showed us that the next hot cryptocurrency can come from almost anywhere. While the majority will undoubtedly be volatile, I don’t think we’ve seen the latest crypto craze, and I’m sure other growth tokens will emerge. It will be important to break them down into two pots: those that have real uses, such as: Ether, and those that are artificially inflated, like Dogecoin, which may be able to stay, although they don’t currently have a unique technical advantage over other tokens.
The one I want to talk about here is called Theta token (CRYPTO: THETA), which is used in the decentralized theta network to improve the inefficiencies associated with streaming video. Is your dollar investment worth it?
How does the theta blockchain work?
The theta blockchain is a decentralized infrastructure designed to improve the streaming and delivery of videos.
Companies or websites that provide streaming video content have traditionally put everything together in one central system. This might be handy at first, but if enough viewers try to access the content and put pressure on the system at the same time, the stream can become slow and choppy. To remedy this, streaming providers are opting for a content delivery system where they distribute a group of servers so that viewers don’t put as much pressure on a single access point and ensure a smoother stream. However, this can be costly.
The theta blockchain seeks to disrupt this model by essentially creating a peer-to-peer network that leverages users’ computers to take advantage of their unused bandwidth. When someone tries to view content that is available on the theta network, some of the data that serves that content comes from the main server it is hosted on, while other comes from the theta network.
Many in the industry don’t see theta as a competitor to other video streaming sites, but rather as a way to improve the installation behind the system and reduce the cost of streaming.
“Theta’s innovation will disrupt today’s online video industry just as the YouTube platform disrupted traditional video in 2005,” said Steve Chen, YouTube co-founder and advisor to Theta. “One of our biggest challenges was the high cost of delivering video to different parts of the world. This problem only gets worse with HD, 4K and higher quality video streams.”
In addition, Theta has formed several large partnerships. For example, Samsung plans to include the e-sports streaming network Theta.tv in future Galaxy S20 smartphones and possibly bring other Theta-based content platforms to its own smart TV platform as well. Big companies like Sony and Creative Artists Agency also support Theta as well as several venture capital firms.
There are two types of tokens used in the theta network.
- The first is called TFUEL. This is how Theta pays people to add bandwidth to their computers on the network. That’s right – if a person uses their computer to share content with someone who is viewing it on the theta network, thus helping to improve streaming quality and loading time, they will be compensated in full or partial TFUEL that is currently available for is trading approximately $ 0.34 per token.
- The second is the theta token, known as the network’s governance token. Theta tokens are more like stocks, and holders of these tokens will supposedly be responsible for the direction of the future project.
Interestingly, Theta Token arguably had a better run than Dogecoin. Currently trading at $ 10.74 per token, the coin was up more than 17,000% from its price earlier this year at one point this year. It recently had a total market value of around $ 10 billion, making it the 20th largest cryptocurrency on May 14th.
Is it more like Dogecoin or Ethereum?
You can probably guess that I consider Theta Token to be Ethereum rather than Dogecoin. While it had the kind of start-up that Dogecoin had, I think it was a lot quieter and less meme-powered. Also, in addition to having a real and unique utility like Ethereum, Theta Token also has a firm supply of 1 billion tokens, all of which are currently in circulation. This is good for investors as it can create more demand. While the theta token is likely to be volatile and there is certainly no guarantee, I see a lot more potential with this one than with other tokens that have been highly valued.
This article represents the opinion of the author who may disagree with the “official” referral position of a Motley Fool Premium Consulting Service. We are colorful! Questioning an investment thesis – including one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.