Authored by: @hetty-rowan

Earn with videos

We all know very well how to find our way to Youtube. A giant in video streaming. But Youtube has a very centralized limitation. A content creator does not see much in return from the advertisements that are viewed. You are annoyed by the many advertisements, but accept it because you think the content creator earns something from it. Unfortunately, it is processed in this centralized system in such a way that the content creator doesn't get to swallow most of the advertising earnings, YouTube does that itself.

But we have a new option to go to!

What is Theta (THETA)?

Theta (THETA) is a blockchain-powered network built specifically for video streaming. Launched in March 2019, Theta mainnet 2.0 functions as a decentralized network in which users share peer-to-peer (P2P) bandwidth with each other. Thus, Theta allows users to simultaneously watch videos and earn tokens for passing video bandwidth to other users who are also watching the same content.

This may sound strange, but you can compare it with other models in a sharing economy, such as renting out your home through Airbnb or renting a scooter from Felyx. Theta users choose to allocate their free bandwidth and computer resources to pass video on to other users. This can be done on any PC, any smart TV and any smartphone.

It is important to know that Theta itself is not a video streaming platform. So it is not the same as, for example, YouTube or Netflix. Theta can be integrated by video streaming platforms to lower their costs of delivering videos. We'll show you exactly how Theta works later in this article.

The problem

Well, you might be thinking, "What's wrong with the current way of watching videos?". There are a number of things that are not going well with the current situation.

But part of it you probably won't notice. In the western world we are a bit spoiled for that matter. Here we are used to streaming our videos effortlessly in Full HD. However, this is not the case in other countries. Much of the world has trouble streaming videos and Theta is capitalizing on that.

A second problem that you probably don't have much to deal with is that the current system causes huge startup costs for video streaming platforms, because they have to manage all the video processing hardware themselves. The processing of data is done by the central streaming service and not by the community.

A third problem is that video streaming platforms sit as a third party between every interaction between the content creator and the viewer. If you watch an ad on a video on YouTube, YouTube earns more than the content creator. Even if you send a donation through Twitch to a streamer, Twitch will get a big chunk of it.

Because the video streaming platform eats a piece of the pie, the content creator gets less. In addition, the viewer gets nothing for watching videos and sharing his data with the streaming platform.

The current system is therefore centralized and inefficient according to Theta and they therefore offer a solution.

The solution

Theta does things differently, namely through a decentralized and peer-to-peer way of delivering videos. A number of pillars are important here:

Viewers will receive the TFUEL token as a reward for sharing excess bandwidth.

Higher quality and smoother streaming of videos thanks to a more efficient decentralized network.

Reduced video processing costs as video streaming platforms no longer have to invest in expensive infrastructure.
In the image below you can see how Theta tries to achieve this.

How does Theta work?

The Theta blockchain is a purpose-built blockchain designed from the ground up for the transmission of video and data. The project has been going on for several years, but is now really getting off the ground. But how does Theta actually work?

Consensus mechanism

The crypto project Theta does this through a unique consensus mechanism, which is the "Modified BFT consensus mechanism". This consensus mechanism is a variation of the Proof of Stake mechanism.

This consensus algorithm consists of three types of nodes, namely a commission of up to 30 Enterprise Validator Nodes and a second tier of thousands of Guardian Nodes and Edge Nodes run by the community. Like other PoS algorithms, users can stake their token with the Theta blockchain.

The Enterprise Validator Nodes are managed by major institutional institutions such as Google, Samsung, Sony and Binance. The Guardian Nodes are nodes that are set up by the users of Theta. For this, the user must have at least 1000 THETA and a good internet connection.

Validator Nodes propose and create new blocks in the blockchain, while Guardian Nodes seal blocks and also check for malicious or non-functional Validator Nodes.

In addition to the Validator and Guardian Nodes, the Theta community members also host the Theta Edge Nodes, which make up the Theta Edge Network, a fully decentralized data delivery network. The Edge Node allows users to pass video streams through the Theta network and earn TFUEL in return, by providing support for THETA.tv and other upcoming video streaming platforms using the Theta network.

Anyone can create an Edge Node. This does not require the user to have a minimum number of THETA tokens and also not a good internet connection.

On-chain transactions can handle anywhere from 500 to 10,000 transactions per second. Bandwidth sharing does not happen on the blockchain, but off-chain, which means that the transaction costs are very low.

Smart contracts

Since the launch of the mainnet 2.0, Theta's network has also enabled the support of smart contracts, called Turing-complete smart contracts.

Turing-complete smart contracts have a number of use cases in video streaming and beyond. Some of these applications are:

Token investments in streamers.

Automated distribution of TFUEL rewards between platforms, streamers and users. Non-Fungible Token creation representing the content creators. In addition, the Theta Virtual Machine is compatible with Ethereum, making it easy to transfer smart contracts from Ethereum to Theta. For example, work is already underway on decentralized exchanges (DEXs) and swap pools that operate on the Theta blockchain.

Tokenomics from THETA & TFUEL

You have seen the term 'THETA' and 'TFUEL' used interchangeably above. That's because the Theta blockchain has a dual token design.

The THETA token is the governance token of the Theta protocol. This crypto is used to stake as a Validator or Guardian node, contributing to the block production and protocol management of the Theta network. By staking and executing a node, users earn a proportionate share of the new TFUEL generated by it.

There will be up to 1 billion THETA tokens in circulation and there may never be more.

The TFUEL token is the operational token of the Theta network. TFUEL is used for on-chain operations, such as making payments to Edge Nodes for sharing their bandwidth in a video stream, or for implementing or interacting with smart contracts.

TFUEL is similar to the "gas" of the Ethereum network. There are currently 5 billion TFUEL tokens, but a fixed percentage of tokens are added every year.

In the Theta mainnet 3.0. is a new concept for TFUEL introduced which includes staking and burning of TFUEL. According to Theta, this will significantly increase the network's capacity and use case.

Both THETA and TFUEL are pre-mined token. This means that tokens have already been mined prior to launch. Therefore, the distribution of the tokens is very important. A token should not be too centralized, especially if it has governance applications.

• Private Sale: 30%, at a price of 0.067$ per token.
• Team: 7.49%
• Advisors: 1.23%
• Partners: 12.5%
• Network Seeding: 12.5%
• Theta Labs Reserves: 36.28%

The distribution of the tokens is certainly not completely decentralized, but a large part of the cryptocurrency keeps a much larger part for the team, so in that respect the distribution of the tokens is above average.

Team

The team, but especially the advisors of Theta are probably a big reason for the success of the crypto. The team itself consists of experts in blockchain and a background in games and video streaming.

Theta's team of media advisors includes big names in the streaming platform industry, such as Steve Chen, co-founder of YouTube, Clifford Morgan, CEO of GFUEL, and Justin Khan, co-founder of Twitch.

Roadmap

Theta is constantly changing and with a view to the launch of the mainnet 3.0, there is a lot on the roadmap of the ambitious crypto project. Theta mainnnet 3.0 is scheduled for April 20, 2021, but the following are also planned:

• Q2 2021
  Mainnet 3.0 launch: Elite Edge Nodes, staking and burning TFUEL;
  LINE Dapp launches with Theta integration
  Official Theta app released for Ledger wallet and Trezor wallet;
  V2 Edge Compute with comprehensive video transcoding;

• Q3 2021
  Edge Caching new use cases (game patches, software updates, etc.);
  Edge Compute new use cases (Machine Learning, AI, other compute intensive tasks);
  V2 Edgecast fully decentralized streaming DApp;

• Q4 2021
  Beta of Edge Storage / IPFS Integration
  V2 Advanced Smart contract developer platform

Conclusion

Theta is a working blockchain with a working product; something you don't see very much in the crypto market. Theta is also an ambitious project that is continuously being worked on, as can be seen from the roadmap for 2021.

The market for streaming services is huge. Companies like Netflix, YouTube and Twitch have been doing really well for a long time, but Theta is here to 'disrupt' this industry.

One point of criticism could be THETA's token distribution, but that too is already better than what we see in many other crypto projects.

In addition, Theta can count on strong competition from other crypto projects that have the same goal. A crypto that also aims to create a decentralized video platform are Livepeer (LPT) and LBRY (LBRY).

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