What Is Theta?
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The rise of live video streaming platforms went almost hand in hand with the development of blockchain technology, prompting the crypto enthusiasts at Theta to try to merge both within a single ecosystem named the Theta platform. With that in mind, its developers got the idea to create a video delivery network running on top of the dedicated Theta blockchain. While the delivery network remains a place for decentralized video streaming, Theta blockchain provides an environment for the use of the platform’s THETA token.
With the Theta platform, both of these layers were built with the goal of creating and monetizing a bandwidth sharing model which is supposed to deliver at least some of its promised goals:
- Theta platform does not want the viewers to pay for access to the low-quality video streaming services. The team behind the Theta identified a series of issues with the content delivery networks (CDN) of today. For starters, these networks are described as lacking adequate reach across the globe, with technical issues such as stuttering, pauses, skips and poor video quality still plaguing many geographical regions. Theta aims to resolve these issues by creating a peer-to-peer (P2P) network in which the consumers are rewarded with tokens for sharing their resources and keeping the platform’s performance level at sufficiently high levels at all times. This is particularly important for the increased use of 4K and 8K video and virtual reality (VR).
- Theta wants to offer smooth streaming of high-quality video without incurring prohibitive technological costs. Today, publishers are required to deploy and maintain expensive infrastructure for video delivery. As the publishers need to take the brunt of these expenses themselves, the less revenue trickles down to the content creators, stifling the creativity and innovation in business. With the Theta’s model, the costs of delivering quality video are reduced based on the inclusion of a larger number of participants in the blockchain. This is supposed to allow for more flexibility and innovation in managing revenue streams and content creation.
- With its P2P model, Theta aims to promote decentralization and better reward distribution system. Due to excess centralization, current economic models of operating CDNs are seen as offering fewer rewards for an increasing number of participants. According to the Theta developers, the largest cut of the pie goes to the advertisers and platforms themselves, while the viewers and content creators receive the shorter end of the stick. Within the Theta ecosystem, the viewers can use their tokens to reward the content creators directly. The intermediaries will be cut out from the process and the content creators will have to rely less on advertisers or third-party hosting websites. As this model also aims to reduce the overall costs of delivering video streams, the viewers would arguably spend less money for more content, with more balanced earnings for both content creators and platforms in the long run.
How Does Theta Platform Work?
At the heart of the Theta platform is the mesh network which consists of a series of nodes capable of mutual communication. These nodes link the network together and provide the backbone for the bandwidth sharing scheme offered by the Theta. At the same time, the Theta blockchain allows the nodes to become parts of the network in the first place.
The Theta network is the main component with which the platform aims to challenge standard content delivery providers. The Theta network will use its P2P architecture to either improve the performance of existing content delivery networks or replace them altogether in the following manner:
- The nodes in the Theta network consist of users who are in possession of various types of hardware and resources used for viewing video content.
- All of these nodes can become “caching nodes” in the Theta network, which can both store video and relay its streaming to viewers in any part of the world. This is supposed to reduce the dependence of traditional content delivery systems on geographically dispersed data centers whose remoteness from the customers’ locations can reduce the quality of video streams.
- Instead of this, video data will be cached and relayed by the nodes which are geographically closers to the viewers, as well as high enough in numbers to deliver video without a decrease in quality.
- The “peer nodes” in the Theta network will be able to pull the video stream from each other instead of relying on CDNs.
- The nodes participating in this model will be rewarded with Theta tokens as an incentive to keep on sharing their bandwidth and draw new nodes to the Theta network. If the model eventually succeeds, the Theta team hopes to see as much as 80% reduction in content delivery costs based on the lack of need to maintain expensive data centers.
How Can Theta Improve Security and Video Quality?
Another area in which the Theta platform wants to challenge traditional content delivery models is security. In essence, Theta wants to tackle the problem of security vulnerability to which the systems of interlinked data centers are exposed by the very nature of their design. Their existing infrastructure makes it possible for the attackers to reduce the general streaming quality at the global level by knocking out only a small number of these centers at the same time. Instead of this, the Theta network will be comprised of tens of thousands of nodes, which should make it more resistant to the disruptions of content delivery.
Making the Theta’s node-based system provide the desired levels of performance will also create the need to balance out the quality of individual caching/relaying nodes in the network. Here, the “quality” refers to a node’s varying capacity to perform its tasks related to video delivery and streaming. Also, some nodes may decide that Theta no longer works for them and leave the platform.
The Theta team wants to resolve these potential issues in advance by creating a server and client-based system which would identify the relative proximity of adjacent nodes in its network. Whenever a peer becomes part of the network, the tracker server will take note of the relevant data for that particular location, including its IP address, latitude/longitude and performance parameters.
This model should promote building connections between the closest nodes in the network, instead of connecting remote nodes in a random manner. Paired with the lower dependence on data centers, this system should allow Theta to offer the streaming quality which could challenge the existing content delivery networks in terms of its consistency.
How Does Theta Blockchain Work?
Unlike the Theta network which focuses on the content delivery, the Theta blockchain works in the background to provide a consensus mechanism on the platform and build its reward distribution infrastructure. Since video streaming and delivery require huge data management capacity, no data related to them are stored in the Theta blockchain. The chain will use its variant of the proof-of-stake mechanism, combined with three main technological innovations which it brings to the table:
- Multi-Level Byzantine Fault Tolerance (BFT)
- Aggregated Signature Gossip Scheme
- Resource Oriented Micropayment Pool
These innovations were designed in response to what the Theta developers saw as a potential scalability issue of their platform. This is related to the existence of thousands of contributor and peer nodes which ensure the proper operation of the network. As these nodes are eligible for receiving rewards for their bandwidth sharing, the Theta platform had to be prepared for the management of a large number of related micropayments.
At the same time, its blockchain is supposed to provide infrastructure for other THETA token applications, such as sending of tips to content creators or purchases. To account for the thousands of nodes which can take part in the consensus process, Theta attempts to provide support for a targeted transaction throughput of more than 1,000 TPS.
Theta’s Multi-Level BFT
In order to achieve higher throughput levels, Theta blockchain had to be divided into two main layers. The first one features smaller groups of nodes running on a modified Byzantine Fault Tolerance consensus mechanism. These sets, numbering no more than 20 validating nodes, will constitute “validator committees” whose goal is to generate chains of blocks in the fastest possible manner resembling the one used with the BFT.
The second layer will consist of a large group of “guardian” nodes which will be in charge of maintaining consensus by securing validation at predefined points. This separation of levels is supposed to secure a high number of TPS at no expense of the Theta’s attempt to decentralize its content delivery model.
How Can Theta Improve Its Messaging and Micropayment Systems?
With its Aggregated Signature Gossip Scheme, Theta hopes to reduce the complexity of its messaging system. Instead of increasing communication overhead by allowing “all-to-all” broadcasting among the guardian nodes, this model will allow the nodes to send their signatures only to their closest neighbors. At the same time, the system’s gossip protocol allows for the exponentially increasing signature distribution. By reducing the size of the messages and increasing the efficiency of their delivery among the nodes, the Theta team hopes to kill two birds with one stone: ensure better TPS performance and improve the system’s ability to scale with the rising number of nodes.
Theta blockchain also seeks to expand its micropayment management capacity by implementing the Resource Oriented Micropayment Pool. This feature allows users to create an off-chain micropayment pool which the other users can make withdrawals from via off-chain transactions. In addition to being double-spend resistant, this technology is described as a more flexible solution compared to using off-chain payment channels.
How Does Theta Token Fit In?
Upon the launch of the Theta mainnet, THETA tokens will move away from their role of an ERC20 token which serves as a mere “preview” of its capabilities. After the mainnet goes live, these tokens are to be swapped for new Theta tokens at the 1:1 ratio. The launch of the new Theta blockchain will promote THETA tokens to the role of security, governance and staking providers on this platform:
- Caching nodes can earn tokens for relaying and caching video streams.
- Viewers can earn tokens from advertisers as rewards for their engagement.
- The tokens will be also used to reward content creators.
- Advertisers will be able to fund advertising campaigns with the tokens.
- Premium content, goods and services will be purchasable from the streaming sites with Theta tokens.
- Virtual product trading will be made available with THETA as well.
- An equivalent of a utility “subtoken” on the Theta platform will be its Gamma token. Being described as similar in function to GAS on the NEO blockchain, these tokens should also be used for transactions involving smart contracts and video segment payments. Five billion of Gamma tokens are expected to be created, with five Gamma tokens being given for every THETA token a user holds.
Theta Token Availability
As of February 2019, the THETA token’s market cap stood at USD 82 million, down from its USD 170 million all-time high from June 2018. The total supply of THETA is capped at one billion units, with about 870 million of them being in circulation right now. This supply ratio is supposed to put potential investors at ease, as it should prevent unexpected dilution of the supply pool.
Theta tokens are available for purchasing on cryptocurrency exchanges such as Binance, Bithumb, Huobi, with the trading being particularly popular in Korea. Once acquired, Theta tokens can be stored in any wallet which supports the ERC20 standard. In February 2019, the Theta team lived up to its promise to launch a dedicated Theta wallet prior to the launch of the project’s mainnet. Upon the launch, this Android OS wallet will automatically switch to operating as a Theta mainnet wallet.
Theta Team and Partners
The Theta platform team is led by its CEO and co-founder Mitch Liu. Liu was also a co-founder of the video game streaming site SLIVER.tv which was launched in 2015. SLIVER is similar to the Twitch streaming service and it serves as a precursor to the Theta project which was launched in 2017. Another co-founder of the Theta project is Jieyi Long (CTO), who was also involved in the creation of the SLIVER.tv. Other Theta project team members include Ryan Nichols (Chief Product Officer) and Riz Virk (Head of Corp Development) while its advisory team counts Justin Kan, co-founder of Twitch, among its members.
The Theta project has entered into several strategic business partnerships, including the agreement with Twitch which allows the viewers to earn THETA by sharing their bandwidth. Another important partner of the project is Samsung VR.