BitTorrent Chain has become the fundamental infrastructure connecting the entire BitTorrent ecosystem since its launch. Let’s now examine its features and performance.
Key Takeaways
- BitTorrent Chain is the fundamental infrastructure promoting multiple BitTorrent products like the original BitTorrent torrent tracker, BTFS file storage system, and DLive streaming platform.
- BTTC is a cross-chain multi-layer protocol providing seamless asset interoperability between Ethereum, TRON, and BNB Chain, rather than a classic chain.
- $BTT token is used not only for gas fees but also for faster file distribution on BitTorrent, rewarding validators, paying for BTFS storage, purchasing BitTorrent X services, serving as collateral in JustLend DAO, acting as a permanent asset in SUN, and functioning as legal tender in Dominica.
- Designed to leverage BitTorrent’s user base, BTTC and $BTT may face challenges as fewer users participate in file sharing due to BitTorrent’s loss of market share in internet traffic.
- Despite losing significant market share, BitTorrent remains valid and widely used in absolute terms. The team can respond to market challenges by playing into the DePIN trend and integrating Bitcoin into BTTC.
What is BitTorrent?
The answer to this question is more complex and entertaining than it seems. BitTorrent includes the original BitTorrent client, BitTorrent Chain, $BTT token, BTFS file storage system, BitTorrent Speed torrent client, and DLive streaming platform.
Torrent Tracker
Initially, BitTorrent was a distributed data transfer protocol launched in 2001, allowing simultaneous file downloads from multiple sources to increase speed. This system connects file-sharing participants known as peers (receivers) and seeders (senders). Peers become seeders and start sharing after downloading a portion of a file.
Despite its popularity and millions of users, BitTorrent faced financial challenges because it was distributed for free and often used for unauthorized content sharing. However, the platform continuously explored innovative monetization strategies, such as the 2007 entertainment store and the 2013 initiative to compete with iTunes and Amazon. Although these efforts did not yield high profitability, BitTorrent’s technical updates and paid tiers demonstrate its commitment to evolving and providing value to its users. The emergence of free alternatives using the same open-source technology highlights BitTorrent’s significant impact and influence in the digital world.
BitTorrent Chain
The lack of an effective business model led to Justin Sun purchasing the BitTorrent protocol and brand for $140 million in 2018. Tokenization became the solution to the monetization problem. In February 2019, BitTorrent introduced BTT as a native TRON-based token with the TRC-10 standard. This was followed by the launch of its blockchain, BitTorrent Chain (BTTC), in December 2021.
Unlike traditional blockchains, BTTC is not an independent chain but a cross-chain multi-layer protocol providing seamless asset interoperability between different blockchains like Ethereum, TRON, and BNB Chain. The precise definition of BTTC would be a heterogeneous cross-chain interoperability protocol created by TRON, using a PoS consensus mechanism and ensuring EVM smart contract compatibility.
BTTC’s architecture includes a three-layer system:
- Root Contracts (Staking Layer). This layer manages smart contracts on chains like TRON, Ethereum, and BNB Chain. These contracts use token mapping to bind tokens on these chains to BTTC through deposits, allowing BTTC to support over 100 different tokens via the BTTC Bridge.
- Delivery (Validator Layer). This layer is responsible for block validation, selecting block producers, and creating checkpoints. Validators stake $BTT on the TRON chain and collect blocks from the block-producing layer into a Merkle tree.
- BTTC (Block Producer Layer). This layer aggregates transactions into blocks. Block producers are periodically shuffled, and the produced blocks are validated by Delivery nodes. Checkpoints consisting of Merkle tree hashes of block clusters are processed on TRON, BSC, and Ethereum.
BitTorrent File System (BTFS)
BTFS is a decentralized file storage system where users can rent space on the network to store their data and offer their device’s storage space in return for tokens. You can interact with the BTFS system through BTFS Finder, a file search engine. Note that BTFS halved storage miner rewards from 15 billion BTT to 7.5 billion BTT as of June 25, 2024.
BitTorrent Speed
BitTorrent Speed is an upgraded torrent client that rewards seeders with $BTT tokens. The client automatically offers $BTT tokens to seeders for higher download speeds. The longer you seed, the more $BTT tokens you can earn, providing a financial incentive to share files. Currently, only the Web version is available, integrating RainberryTV, a free-to-use streaming platform with a torrent search engine, 20 live channels, and over 100 content partners.
DLive Protocol
DLive is a content streaming protocol where viewers can earn $BTT tokens for watching. Streamers can purchase exposure for a small fee and receive donations from their viewers, creating a mutually beneficial ecosystem. BitTorrent acquired DLive in 2019. The platform’s lenient approach to content moderation attracted various free speech groups, far-right activists, and gamers, making it a popular alternative to stricter platforms like YouTube and Twitch.
BTT Token
$BTT token was launched in February 2019 on the TRON blockchain as a TRC-10 token, with a total supply of 990 trillion tokens.
17% of this supply was allocated to investors, 43% to developers and project partners (BitTorrent Team, BitTorrent Foundation, and TRON Foundation), 19.9% for ecosystem development, and 20.1% was distributed to users via airdrop. BitTorrent users received 10%, while TRX holders were allocated 10.1%, vested over six years.
With the introduction of the cross-chain compatibility protocol BTTC, the $BTT token was upgraded to the TRC-20 standard on the TRON network. Token contracts were also deployed on Ethereum and BNB Chain using ERC-20 and BRC-20 standards. The token underwent a revaluation process, where old $BTT tokens were exchanged for new ones at a 1:1000 ratio, increasing the total supply from 990 billion to 990 trillion while maintaining its market value.
According to public data, most of the token supply has been released, with additional tokens to be distributed by 2025 and partnership tokens unlocked by 2028.
Initially, the $BTT token was only used to pay for faster file distribution on the BitTorrent Speed application. However, with the launch of BTTC, $BTT became essential for network operations and gas fee payments. Since then, the utility of $BTT has expanded and is currently used for:
- Paying gas fees
- Rewarding validators
- Paying for file storage on the BTFS network
- Purchasing various services on BitTorrent X products
- Serving as collateral in JustLend DAO
- Acting as a continuous asset on the SUN platform
- Functioning as legal tender in Dominica
Market Performance and Network Usage in H1 2024
In the first half of 2024, $BTT’s performance largely mirrored $BTC’s movements, reflecting broader market trends. During Bitcoin’s growth periods, the $BTT token also experienced upward momentum. However, when Bitcoin’s bullish trend paused and entered a sideways movement period, altcoins, including $BTT, began to decline.
As is often the case, the price of a native token is correlated with network usage. Fundamentally, the token’s incentivizing power increases, motivating users to utilize the underlying network and related products. The opposite is rarely true in crypto.
Regarding the growth of new addresses, the indicator plateaued over the past six months. Momentum is needed for growth to continue. Let’s examine the obstacles to growth and what could provide this momentum.
However, in the first half of 2024, BitTorrent Chain reached several significant milestones:
- Listing on Bitfinex, Mercado Bitcoin, and Bitci Exchange.
- Official partnership with HTX DAO.
- Integration with DEXTools.
Challenges for BitTorrent to Overcome
In absolute terms, BitTorrent remains popular. It has over 170 million active users exchanging software, music, movies, and other digital content. BitTorrent Inc. announced in 2020 that its software was installed on over 2 billion devices. According to SimilarWeb, the company generates significant annual revenue estimated between $15 million and $25 million.
However, relatively speaking, BitTorrent has seen a significant decline in usage, once a major force in internet traffic. In 2004, BitTorrent accounted for an impressive 35% of all internet traffic. At that time, peer-to-peer file sharing was the primary driver of internet traffic, as no other service offered significant bandwidth. Recent data from Sandvine’s 2024 Global Internet Phenomena Report reveals that cloud storage, video, and streaming services have far surpassed BitTorrent. The rise of platforms like YouTube, Netflix, and TikTok has greatly diminished the importance of peer-to-peer file sharing. Even in the realm of digital piracy, streaming has overshadowed BitTorrent, causing it to lose most of its market share.
BitTorrent maintains some relevance among fixed access devices, constituting 4% of upstream traffic. However, it has been surpassed by cloud storage applications, FaceTime, Google, and YouTube. On mobile devices, BitTorrent no longer ranks in the top 10.
Designed to leverage BitTorrent’s user base, BTTC and $BTT may face challenges as fewer users participate in file sharing. The incentives provided by the $BTT token for rewarding users for file sharing become less attractive as the once-strong BitTorrent community diminishes. As internet traffic shifts towards cloud storage and streaming, the need for decentralized file-sharing protocols like BitTorrent decreases, challenging the viability and market performance of BTTC and $BTT.
How Can BitTorrent Find a More Suitable Market?
Despite losing significant market share relatively, BitTorrent remains valid and widely used in absolute terms. The team has continuously responded to market challenges by integrating streaming services into its ecosystem and expanding use cases for BTT and BTTC. These efforts ensure that BitTorrent adapts to changing user needs and technological trends.
The First DePIN Project
As you may be aware, DePin is the latest buzzword in the crypto world. It stands for Decentralized Physical Infrastructure Network. The concept involves using blockchain technology and token incentives to create decentralized networks of physical devices. The idea is to allow individuals and communities to contribute to and benefit from these networks instead of relying on centralized companies or governments.
The DePIN trend has yet to fully emerge, and it will be hard to find a better market candidate than BitTorrent, a pioneer in file sharing, when the second wave begins.
Bitcoin Integration into BTTC
TRON, the Layer-1 blockchain supporting BTTC, is considering a Bitcoin Layer-2 solution to support a wrapped version of Tether (USDT). In February, Justin Sun outlined a roadmap for this solution, which we can observe as a fundamental part of BTTC.
Sun stated, “This integration will directly connect TRON to Bitcoin, providing access to over $55 billion in value, bringing financial vitality to Bitcoin.” Sun noted that the plan would likely involve creating a wrapped version of USDT, and TRON already hosts more than half of USDT’s $104 billion issuance across multiple blockchains.
Although the plan is still in the concept stage, the BTTC Bridge will likely play a significant role. This integration is expected to attract new users to the BTTC ecosystem and expand its use cases, particularly in decentralized finance. Imagine receiving rewards in $BTC for streaming and file sharing.
Conclusion
BitTorrent Chain (BTTC) continues to be vital infrastructure within the BitTorrent ecosystem, connecting various products like the original torrent tracker, BTFS file storage, and DLive streaming platform. Despite losing market share to modern services like cloud storage and streaming platforms, the original BitTorrent torrent tracker remains widely used, maintaining relevance with over 170 million active users and significant annual revenue. The $BTT token and BTTC have expanded their use cases by offering new incentives.
BitTorrent has integrated streaming services to follow current market trends and continues to explore new use cases for $BTT and BTTC. The initiative to launch a Bitcoin L2 leveraging the BTTC Bridge could provide significant liquidity and attract new users, enhancing BTTC’s role in decentralized finance. By adapting to technological changes and leveraging its extensive user base, BitTorrent Chain aims not only to maintain relevance but also to thrive in the evolving digital landscape.
