Tron is one of the largest blockchain-based projects dedicated to establishing a truly decentralized internet. Founded in 2017 by H.E Justin Sun, Tron is a digital platform that aims to curb the cost of sharing digital content and revolutionize the global entertainment system.
Tron challenges the media industry including some of the biggest “Over the Top” or OTT platforms with its slogan “Decentralise the Web” and its focus on eliminating the corporate middlemen from the process of consuming media.
So, now that we know the ‘why’ behind the creation of the Tron blockchain, let’s get to the ‘how’ and explore how does Tron work? What is it used for?
Connecting your Tron Address to ZenLedger For Your Crypto Tax Forms
- To import your Tron transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit the ADD COIN button.
How Does Tron work?
The Tron blockchain is compared to the Ethereum platform as its building blocks—decentralized applications (dApps), smart contracts, and tokens—are inspired by it. As it is built on already-tested features, Tron’s design is also inspired by Ethereum offering a fine user experience. Even Tron’s native currency was based on the Ethereum ERC-20 token but after migrating to its own network in 2018, Tron’s native currency, TRX was deemed a separate coin.
Tron blockchain functions on a delegated proof-of-stake (PoS) consensus mechanism. In this mechanism, 27 super representatives validate the transactions and they are charged with the duty to maintain the transaction history. These super representatives are changed every six hours and get rewarded for their services with Tronix (TRX) token, Tron’s native currency produced by the mechanism. A new block is added to the network every three seconds and those who validate the transactions and help in the formation of a block get 32 TRX tokens as a reward.
The Tron blockchain works on three basic principles.
- First, it is a decentralized digital platform
- Second, no authority controls the data on the blockchain and it is totally free
- Third, content creators get TRX as a reward for posting their content
Creators on the network can create their tokens, which can be used within the creators’ dApps. Besides, these new coins are supported by the main TRX token.
In the final stages of the network development, Tron plans to include the support of games on the network. Even the games will be completely decentralized and the creators would receive rewards from the gamers directly if they enjoyed the game.
Now that how does Tron work is out of the way, let’s now take a look at the TRX token and what it actually is.
Tron Cryptocurrency Explained
As we’ve mentioned before, Tron’s native currency is called Tronix or TRX. It was introduced to the cryptocurrency market in January 2017 via a private sale of 25.7 percent of the initial token supply. Following that, an initial spin offering (ICO) for 40 percent of the supply was offered in August 2017.
In the beginning, the TRX tokens were Ethereum network-based but in 2018, the tokens were moved to the Tron blockchain. The TRX coins cannot be mined by the general public. Alternatively, the PoS consensus-based network counts on the users who stake their TRX coins, which is maintaining a balance of Tron in a crypto wallet that powers transactions.
TRX has multiple functions. It can be used as an investment, a store of value, or traded for other tokens. However, the primary function of TRX is on the network as a native currency fueling the creation of dApps. The TRX token can also be locked away to gain a reward called ‘Tron Power.’ With this, you get voting rights over decisions on the network. The longer you lock away your coins, the more TP you receive. TRX gained mainstream attention when Tron acquired peer-to-peer content sharing platform BitTorrent.
With Tron cryptocurrency explained briefly, let’s move on to the buying procedure of TRX.
How to Buy Tron
Some investors view Tron as a good investment while some use it to gain rewards by staking it. Anyway, buying it is simple and straightforward. Here are the steps:
Open an Online Account:
Before buying any cryptocurrency, you have to open an account with a crypto exchange or a trading platform such as Coinbase, eToro, Kraken, or more.
Buy a Wallet:
Once you have opened your online account, you’ll need a secure wallet to secure your coins. You can leave your coins on the exchange but in case the exchange gets hacked, you might lose your coins. There are different types of wallets such as a Hot wallet, Hosted wallet, a Cold Wallet, and a Decentralized wallet.
Hot wallets are connected to the internet and offer the least amount of security. In a Hosted wallet, your coins are held on a crypto brokers exchange but you retain control of your coins. Whereas a cold wallet is a hardware wallet that offers the highest levels of security. It is not connected to the internet so it can’t be hacked but it can be misplaced. Lastly, a Decentralized wallet allows you to send and receive coins from around the world and it eliminates the third-party risk. Choose a wallet that is secure, intuitive, and easy to use.
Make Your Purchase:
With the online account and wallet set up, add funds to your crypto exchange account, make the purchase, and transfer your coins to your secure wallet.
The Bottom Line
Tron differentiated from other blockchains with its Asia-focused market strategy and this strategy is proving successful. The Tron network has an incredible community of avid supporters. This unique cryptocurrency project is making all the various technologies inspired by other projects work seamlessly.