BitTorrent, one of the pioneers of peer-to-peer (P2P) software systems for internet-based file sharing, is reportedly launching its own digital currency.
BitTorrent's Native Cryptocurrency
BitTorrent’s new cryptocurrency will be issued by the decentralized platform’s supporting organization, the Singapore-based BitTorrent Foundation. Notably, the P2P network’s new crypto, the BitTorrent Token (BTT) will be based on the Tron protocol, which was initially proposed and developed by former Ripple Labs employee, Justin Sun.
Crypto enthusiasts know that Tron acquired BitTorrent for $140 million in June 2018, however Tron’s management did not confirm the acquisition until July when it released an official statement:
We are excited to announce that Tron has officially closed its acquisition of BitTorrent… BitTorrent will continue operating from Tron’s new San Francisco location, which is now the center of operations for the company’s global market expansion.
Sun, who is the CEO of BitTorrent, has pointed out on many occasions that Tron aims to introduce blockchain technology to the file sharing platform’s existing 100 million users. The Hupan University graduate, which was founded by China’s wealthiest businessman, Jack Ma, has said he wants to “empower a new generation of content creators.”
Promise To Decentralize The Web, In Favor Of Content Creators
Similar to what many other competing blockchain platforms aim to offer, the Tron (TRX) blockchain network aims to develop a P2P software ecosystem that will allow users to truly own their data. As explained by Sun, the Tron platform will provide content creators “the tools to distribute their content directly to others on the web.”
In August 2018, BitTorrent had announced the launch of Project Atlas, which is an updated version of the file sharing software. Project Atlas users are able to earn cryptocurrency while they share files with other users on the network. As Sun mentioned in a YouTube video published in October 2018, the existing file sharing system requires that users place a file on the server - before being able to download other files. But there’s no monetary incentive for users to place files on the network after they’ve completed downloading what they want.
With BitTorrent’s new crypto token, BTT, users will be able to pay others who send files to them. It will also be possible to pay for more bandwidth (to enable faster downloads) with BTT tokens. The BitTorrent management team believes that file hosts will have an incentive to keep files on the network, which should improve the chances of users finding the files they want to download.
Justin Sun: BitTorrent Token (BTT) WIll Provide Better Incentives
A Tron representative said that the firm will not be receiving any commission or any kind of other payments from transactions involving the BTT token (on BitTorrent). BTT will be a TRC-10 compliant token (which is similar to the Ethereum ERC-20 token), and the total supply of BTT tokens has been capped at 990 billion. This, according to the the token’s whitepaper which was shared with Coindesk.
For all users located outside the US, the BTT token will be available on Binance Launchpad, a listing service for startups trying to raise funds through public token sales. The BitTorrent team also plans to conduct airdrops in order to further distribute BTT tokens.
The Windows-based µTorrent Classic client, which has the largest userbase out of all versions of the file sharing program, will support BTT tokens. Other details shared by the BitTorrent team noted that Project Atlas will be backward-compatible so that people who are not interested in using the BTT tokens are able to use the platform in the same manner they were before.
Notably, more updates regarding Project Atlas and Tron will be announced during the Tron Summit which will be held later this month in San Francisco, California.
BitTorrent Reportedly Refused $170 Million Buyout Offer From NEO
Last year, BitTorrent had been in talks (regarding a possible acquisition) with other firms including the developers of blockchain-based platform NEO. However, BitTorrent’s board of directors reportedly rejected a $170 million offer from NEO’s investment department, stating that the offer was “not more favorable to the company and its shareholders.”
Commenting on BitTorrent’s plans to issue its own cryptocurrency, Meltem Demirors, the chief strategic officer at CoinShares, pointed out via Twitter:
[The] Tron Foundation has a token … they used proceeds from that token sales to buy BitTorrent. Now, BitTorrent is selling a token [callled] BTT. It will be launched / sold on Binance, which also has a token [called] BNB
Do We Really Need So Many Tokens?
Interestingly, Changpeng Zhao (aka “CZ”), the CEO of Malta-based cryptoasset exchange Binance, has said many times that he envisions a world where there will be thousands, if not millions of crypto tokens. This idea however, is difficult to embrace. As well-known crypto critic and renowned economist Dr. Nouriel Roubini has explained, having too many tokens or mediums-of-exchanges (MOEs) will likely only create confusion and is not practical.
Roubini gave the example (earlier last year during a debate with Ethereum co-founder Joseph Lubin) of trying to determine the relative price of goods when there are many different tokens. The New York University professor said it would become very difficult to know how much items cost if there were thousands of tokens, therefore he predicted cryptocurrency projects would fail.
While it’s possible for several crypto projects to survive and deliver products and tokens people will actually use, it seems unnecessary for BitTorrent, which is owned and managed by the Tron Foundation, to launch its own cryptocurrency as the Tron platform already has a cryptocurrency called TRX. Why not just use TRX to transact on Project Atlas?