Memories die hard in the cryptocurrency market, where a digital token known as Tron has almost doubled in value over the past month.
Like many of the startups that surged in value before crashing during the digital-asset market bubble, the company features a young entrepreneur, questions about usage of its main product and a lot of hype. Tronix or TRX, as the token launched in 2017 is officially named, has a market value of about $1.6 billion, making it the ninth-largest virtual coin, as measured by data provider CoinMarketcap.com.
At the center of all the excitement is Justin Sun, a 28-year-old who founded Peiwo, a popular Snapchat-like app for China with millions of users. He then started Tron by using much of Ethereum’s computer code and using parts of other startups’ white papers to write his own. Sun bought the popular software file sharing application BitTorrent for $120 million last year. Demand for the coin has surged since the company recently announced plans for a new BTT token, which runs on the Tron and BitTorrent networks.
“A lot of people wrote off Tron as all hype/marketing and no substance, but they made a lot of noise with the BitTorrent acquisition, and now I think it’s an open question of whether they will be one of crypto’s most high profile ‘fake it til you make it’ success stories,” Ryan Selkis, chief executive officer at researcher Messari Inc., said in an email. “It’s been wild to watch.”
The spotlight is getting even more intense. A Tron sponsored conference in San Francisco that begins today features former NBA star Kobe Bryant as keynote speaker, along with Sun and an executive from Swisscom AG, a $25 billion telecommunications company. Sun’s Twitter account now has 737,000 followers, just a tad short of Ethereum founder and crypto guru Vitalik Buterin, with 832,000 followers.
“We want to become the most famous brand in the world,” Sun said in a phone interview. “The first cryptocurrency they will think of is Tron.” While the smallest units of Bitcoin are called satoshi, after its anonymous creator, Tron’s smallest units are called sun, after its creator. Sun wouldn’t disclose what percentage of the Tron cryptocurrency he owns.
Back in 2012, Sun, who has a bachelor’s from Peking University and a master’s from the University of Pennsylvania, heard about Bitcoin and invested a full year of college tuition in the cryptocurrency. As Bitcoin’s price skyrocketed, he cashed out and founded Peiwo. Tron also raised $70 million in an initial coin offering that Sun says sits largely untouched.
The goal is to turn BitTorrent’s 100 million monthly users into users of cryptocurrency, Justin Knoll, head of the BitTorrent token project, said in a phone interview. At first BTT could be used to speed up downloads of movies and tip performers, but eventually for other things, like paying for file storage, he said. BitTorrent is profitable and generating around $25 million in revenue a year, Sun said.
The company is focused on increasing the number of distributed apps, such as games, running on its network. While it right now has 107 Dapps to Ethereum’s 1,347, according to tracker DappRadar, that number should increase at Sun recently announced an up to $100 million fund for developers creating Tron gaming apps.
Tron is also expanding into serving corporate customers, and has service provider agreements with the likes of Oracle Corp. and Swisscom, so their customers could use its network, Sun said.
Tron claims it has much faster transaction times than Ethereum because it uses a different mechanism for verifying transactions: Its 27 super representatives produce the blocks that are in turn voted for by the cryptocurrency account holders. Ethereum, meanwhile, currently verifies transactions using computers called miners, although it’s moving to a similar proof-of-stake system.
“Converting to PoS is a huge effort,” Sun said. “It’s like moving a building a block away. It might be easier to tear down the building and rebuild it. It doesn’t work that way. For Ethereum, it may cost them a year or two to migrate, and that seems optimistic.”
Sun’s official biography lists him as a protege of Alibaba Group Holding Ltd. Chairman Jack Ma, and some analysts see similarities between the two men. Sun, who operates now mostly from San Francisco, is a recent graduate of Ma’s Hupan University program for entrepreneurs.
“One point that comes to mind is role models,” Lex Sokolin, global director of fintech strategy at Autonomous Research LLP, said in an email. “The aspiration for someone like Sun is less Steve Jobs or Elon Musk, and more of Jack Ma. The former is a myth of a Promethean genius, summoning a tech product into the world. The latter is a humble, persistent, and unstoppable action hero, executing faster and better than everyone else.”
But keep in mind that Bryant is being paid in cash rather than Tron for his appearance, unlike many of the celebrity endorsers during the heart of the Bitcoin bubble.