Theta is a blockchain platform that is developing a decentralized video streaming and delivery network. On its platform, Theta Token (THETA) is the native token used to reward users of the network for sharing their unused memory and bandwidth to become video caching nodes.
A handful of centralized Content Delivery Networks (CDNs) currently provide the backbone infrastructure for delivering video streams for television, movies, sports and other digital content. CDNs typically build data centers called Point-of-Presence (POP) servers in multiple locations around the world that serve videos to viewers. But the number of POP servers in the world is limited and most can’t serve all viewers; especially those in underdeveloped regions.
This so-called “last mile” delivery problem creates a bottleneck in the streaming delivery pipeline and often leads to a poor viewer experience, characterized by frequent re-buffering and choppy streams. The problem will become even more severe in an era of 4k, 8k, 360° VR, and light-field streams. The bandwidth required to serve streams of such high quality is significantly higher than a simple 720p HD stream.
Live video streaming already makes up over two-thirds of all internet activity, and it’s expected to jump to over 80% by 2020. Traffic for virtual reality videos and 360° video streaming content is also expected to grow 61x by 2020.
Theta’s solution is to create a decentralized video mesh network that incentivizes viewers to share unused bandwidth and computer resources. This will allow them to deploy a video delivery infrastructure that efficiently relays video streams. Theta aims to solve three challenges in the video streaming industry:
1. Poor video stream quality caused by the “last mile” delivery problem, particularly in developing countries.
2. High bandwidth cost of video content delivery for CDNs.
3. Inefficient video streaming ecosystems and poor transparency between influencers, users, and advertisers.
The project is being developed by Theta Labs, which is a subsidiary of SLIVER.tv; a U.S.-based eSports and entertainment platform. SLIVER.tv has been at the forefront of developing next-generation video streaming technologies for VR and 360° videos since 2015.
The company’s mission is to leverage blockchain technology to create the world’s first decentralized video streaming and delivery network. Its live eSports streaming platform will be the first dApp built on top of the Theta network, and it’s bringing more than 5 million unique monthly visits to the network. SLIVER.tv is also the first platform to fully integrate Theta Tokens for purchasing premium services, goods and virtual items.
How Theta Works
The Theta Network can be thought of as a “world cache” of videos that’s powered by the memory and bandwidth resources contributed by its viewers. Anyone can turn their device into a “caching node” that’s a part of Theta’s video delivery mesh network. To encourage users to contribute their computing power and bandwidth resources, caching nodes will receive Theta Tokens as a reward.
Theta expects caching nodes to accomplish three things:
1. They will be geographically much closer than POP servers, which will greatly reduce data packet round-trip time and improve stream delivery quality, thus addressing the “last mile” delivery issue.
2. A sufficient number of caching nodes will significantly reduce the bandwidth costs for CDNs (estimated 40-80% reduction).
3. Caching nodes will make the delivery of next-generation streaming technology like 360° videos much more practical.
Creating a fully decentralized architecture is Theta’s long-term goal, but that’ll require a sufficient number of users to participate, which may take some time. To start, Theta proposes a hybrid architecture that works with existing CDNs and caching nodes.
The caching nodes will augment CDNs with more caching layers for end viewers who are geographically far away from POP servers. A subset of caching nodes will pull the stream from POP servers and viewers will in turn pull the stream from nearby caching nodes, guaranteeing better quality streams.
The Theta blockchain will initially use a proof-of-work (PoW) consensus mechanism and then switch to a proof-of-stake (PoS) mechanism based on the Tendermint protocol when its mainnet goes live. The switch to PoS will offer numerous advantages to the platform, including less wasted resources, increased scalability, and great versatility to create economic incentives.
To further reduce the computational burden of caching nodes, validating nodes and caching nodes will be separated. By separating the two, caching nodes and viewers won’t need to perform any extra computations. This will also enable a wide range of devices (e.g. mobile phones, laptops, IoT devices, etc.) to operate as caching nodes.
Resource Oriented Micropayment Pool
Theta is implementing a “Resource Oriented Micropayment Pool” to address the scalability and throughput requirements of a global video delivery network. Users can create a double-spend resistant micropayment pool that other users can withdraw tokens from. Since the micropayment pools are off-chain, users can buy videos from several caching nodes without having to initiate time consuming on-chain transactions.
Micropayment records will be used to track what Theta calls “proof of engagement.” Every payment record carries the ID of its associated video. The information is permanently recorded on the blockchain and can be used by advertisers as a reliable engagement metric.
Proof of engagement will be useful for advertisers who want to pay viewers for their attention. It can also be used by content creators to track their earnings based on the number of views they receive.
Smart Streaming Contracts
Theta supports specialized smart contracts called incentive contracts, which can be used to facilitate reward distribution and collection between participants in the Theta ecosystem. Incentive contracts are executed by validator nodes and will have many uses, including:
Advertising – Advertisers can use incentive contracts to reward viewers and streamers as their ads are shown and watched. The distribution of ad revenue will be based on proof of engagement.
Paid/Premium Video Content – Incentive contracts can be used to support premium content on the Theta network. In the future, a viewer may send tokens to an incentive contract to gain access to paid content.
Subscriptions – Subscription streaming services like Netflix, Hulu, or Amazon Prime can continue using their payment models on top of Theta’s decentralized video streaming network by using incentive contracts to collect payment.
Theta vs. Conventional CDNs
Theta wants to develop a new blockchain for video delivery and streaming with tokens that work as a reward mechanism to motivate stakeholders to participate in the network.
Its hybrid architecture uses both a P2P network and CDNs for video delivery. It combines the pros of both worlds to provide users with the high scalability of a P2P network and the high availability of a CDN delivery system.
Theta has reportedly performed tests that show its hybrid mesh streaming technology can reduce CDN bandwidth usage by 40-80%, which could translate to billions of dollars in bandwidth cost savings for popular streaming websites.
The deployment of Theta’s mesh streaming technology is also very lightweight and frictionless. The first version of Theta’s client video player is a web/HTML5-based player that employs the WebRTC protocol for stream delivery among peers. Streaming sites can simply embed the player onto their webpages and instantly gain access to millions of user nodes connected to the mesh network.
Theta is currently the only end-to-end solution for decentralized video streaming that provides incentives for all users within the network.
Theta Tokens (THETA)
Theta Tokens (THETA) function as an incentive mechanism which motivates users to share their unused memory and bandwidth to become video caching nodes for the network. The tokens will have the following uses:
– Users can earn tokens by caching and relaying video streams.
– Viewers can gift tokens to support their favorite content creators and streamers.
– Viewers can use the tokens to buy premium products and services.
– Advertisers can use THETA to fund ad campaigns.
– Viewers can also optionally earn THETA from advertisers as an engagement reward for their attention.
Theta Tokens are ERC20 compliant and are already live and fully integrated into the SLIVER.tv platform. The ERC20 tokens will be swapped for native Theta Tokens (1:1) once the Theta blockchain is launched in Q4 2018.
THETA Trading Volume, Price and Market Cap
The total supply of THETA caps at 1 billion tokens. More than 65% of the available supply is already in circulation. The rest are locked for a vesting period of 6-12 months. The tokens are distributed as follows:
– 30% (300,000,000 tokens) was sold to investors in a private ICO
– 25% (250,000,001 tokens) is in a mining reserve
– 22.5% (224,999,999 tokens) is in the Theta Labs reserve
– 15% (150,000,000 tokens) is set aside for network seeding and strategic partners
– 7.5% (75,000,000 tokens) is set aside for advisors and employees
THETA’s public ICO was canceled after Theta Labs managed to reach its funding hard cap ($20 million USD) in a private sale. THETA was officially launched in January 2018 at $0.15 USD with a market cap of $80 million USD. Its price has managed to remain quite stable since its launch.
Buying, Storing and Selling THETA Tokens
THETA tokens can be acquired from OKEx, Huobi, Binance, Gate.io, and IDEX. It’s an ERC20 token, which means it can be securely stored in wallets that support that token standard, including MyEtherWallet, MetaMask, Exodus, and Jaxx. Hardware wallets like Trezor and the Ledger Nano S should also work. You may need to input THETA’s token contract address in your chosen wallet to see your balance.
An official wallet is still under development. A prototype will reportedly be released in late Q4 2018, and a full wallet will be released with the launch of the Theta mainnet.
Liquidity of Theta Tokens
THETA has relatively good market liquidity. A decentralized streaming network could revolutionize the existing streaming infrastructure. If successful, Theta could attract the giants in the video streaming world (e.g. Amazon, HBO, Netflix) and completely change how we watch video content.
Theta Labs has already formed strategic partnerships with SamsungVR and Aelf. The former is spearheading the Theta Media Advisory Council, a select group of early partners who are providing input on the direction of the native Theta blockchain launch. Notable members of the advisory board include Justin Kan, co-founder of Twitch; Steve Chen, co-founder of YouTube; and Ma Haobo, the CEO of Aelf.
The project appears to have the backing of some big names in the video streaming world, and that seems to be inspiring investor confidence. This project is worth keeping an eye on.