Why Should I Invest in Theta?
Before I begin to explain the positive aspects of the Theta Network (and token), I always recommend every investor do his/her own research. There are ample resources about Theta online, from interviews with the CEO, to videos and blogs of deep dives/analysis, as well as Theta’s very own fantastic official white paper (which I highly recommend!) and official website ThetaToken.org.
Utility and Function
Again, before explaining Theta Network, as an overview, similar to investing in a businesses, utility and function are the most important aspects of a blockchain/crypto project, from an investor perspective. There are thousands of blockchain projects but not all have a real purpose, a real world usage, or a high enough demand/need for that network.
The Theta Network is a decentralized Content Delivery Network (CDN) designed to help large video platforms (YouTube, Netflix, Twitch) save significant amounts of money by cutting operating costs. The white paper states that 40% of video networks’ operating costs go toward CDNs which are the de facto method for video sites to deliver content to users. Theta aims to “offload” bandwidth from these inefficient centralized legacy data delivery systems (CDNs) in favor of a more efficient “mesh network” of home/office computers whom will share their unused bandwidth. Think of this as AirBnb or Uber for home internet. In exchange for sharing unused bandwidth, users will be rewarded with tokens based on how much data they stream to their neighbors.
This mesh network solves the “last mile” data delivery problem by creating digital bridges and highways between users/computers. A good analogy is to think of the main highways in a busy city, and to imagine hundreds of mini highways connecting these major highways together, with thousands of different on-ramps and off-ramps, so that more cars can flow freely to their desired destinations without being bottlenecked in any one area. Theta’s decentralized CDN works alongside traditional CDNs and is more efficient than the current standalone system of CDNs pumping video to each individual household over long (or short distances) with several different network connection/relay points. The incentive for individuals to share their internet bandwidth is that they will be rewarded in tokens with real world value which can be exchanged for fiat or used toward network services such as subscriptions, premium content, donating to streamers, or avoiding advertisements.
This model has been proven to work through the Theta Network’s testnet (beta) trial. Data showed a significant increase in user engagement within the platform, as well as up to 80–90% of CDN bandwidth offloading which saved the network (Sliver.TV — parent company to Theta Labs) a significant amount of money which would go toward CDN costs. Please see Theta’s official blog post for more information on the results of their testnet https://medium.com/theta-network/theta-testnet-initial-results-8175e9fdd7b3.
Best Real World Use Case of all Crypto Projects!
Yes, it’s true! Beyond Bitcoin, Theta has the best immediate real world use case of all the thousands of crypto projects. Video accounts for 2/3 of all internet traffic. There is a constantly increasing demand for higher quality video, as well as the potential for VR content to become more popular. Theta can save video networks tens to hundreds of millions of dollars, but it also gives everyday consumers the ability to earn crypto money using their computer and internet connection. Most people don’t have the ability to mine Bitcoin because it requires expensive hardware and extremely low cost energy which is only available in a few parts of the world.
As an example, there is another popular project with a similar high function utility to Theta called Elastos. I will explain why it has good utility, but why Theta has even greater utility. Elastos aims to utilize ‘(individual) smart devices linked through their peer to peer network, to create one global supercomputer with one operating system for the entire network’. The reason Elastos falls short of Theta, by comparison, is that it requires computing power in addition to bandwidth. Also, more people care about watching videos, earning tokens (money), and getting better access and content on their favorite video platforms than contributing to supercomputing (unless it pays more, which will be difficult for Elastos to pull off). Elastos is a great project but has a higher difficulty to become a highly adopted blockchain for consumers and enterprises because the crowdsourced supercomputer concept is even more complex than Theta. I only share this example to provide some contrast and perspective into the blockchain space and a similar/related concept/competitor.
Also, Theta is a global project benefiting every country in the world where internet is used to deliver video. One of the reasons the founders of Sliver.TV started the Theta Network was to help them deliver better video streams to their user base in the 3rd world. This exciting project has the ability to help deliver a better video experience to the world while also empowering consumers by allowing them to earn tokens, make money, and better engage with their favorite video platforms.
Team + Major Partnerships
Theta has partnered with two major Korean conglomerates MBN and CJ Hello, the American equivalents to Time Warner and Comcast. Theta also partnered with Samsung VR (Samsung Next, the VC arm of Samsung is an investor) for their testnet run of their VR streaming capability, and currently run a channel on Theta’s Mainnet via Sliver.tv.
The Theta team has been transparent about their growth within different Samsung subsidiaries. They are working with the “Visual Display Group” on integrating Theta protocol within Tizen OS, Samsung’s Smart TV operating system (which also has the largest market share). The Theta team also partnered with a top tech graduate school in Korea, an equivalent to Stanford/MIT, to teach a blockchain course and help foster the next generation of blockchain developers.
According to Strategy Analytics market research, “Samsung’s Tizen platform remains the largest smart TV operating system globally by sales, followed by LG’s WebOS and Android TV, according to Strategy Analytics. The research firm said that 21% of smart TVs sold in 2018 ran Tizen, 12% were powered by WebOS and 10% used Android TV.” Samsung has about 20%, and LG ~%10 of the TV marketshare. Theta is integrating their tech into both Samsung and LG smart TVs and set top boxes (as seen in this official Theta video!)
Last but not least, the CEO and CTO are both highly successful entrepreneurs who have already built and sold multi million dollar tech/gaming companies, and own a total of four patents related to VR/esports. When analyzing investments I look for utility, a rock solid use case, and a strong team and organizational structure.
Theta investors include Samsung, Sony, Blockchain.com, CAA, DHVC, Sierra Ventures. A few big name advisors to the project are Steve Chen (co-founder of Youtube) and Justin Kan (co-founder of Twitch). All of their team, advisors, and investors are listed on their official website at thetatoken.org.
The Theta team has been doing an excellent job in global expansion, not just focusing on one market. They have made major inroads in Korea with Samsung, MBN, Pandora.tv, and CJ Hello, as well as globally via their parent company Sliver.TV. They have an excellent multi-pronged strategy based on a their original company need which spawned Theta: serving increasingly high quality video to the 1st world and 3rd world via a unique but highly practical and efficient, mutually beneficial, novel data distribution network.
Theta Network is severely underexposed compared to many of the other blockchain projects. Theta has been around over a year and has gained a small but mighty name recognition, for multiple reasons.
- It is difficult to understand the technology, let alone the value proposition, especially as a vertical.
- There are more popular and hyped projects. Theta is not on any American exchanges, it’s still in development. Theta will be ready for full growth in 2020 per their most recent roadmap. In other words, there was not a lot of catalysts to move the stock. This leads to the last reason…
- The general crypto market has been ice cold. Bitcoin has failed to rally. Crypto investment infrastructure is being built at a rapid pace with institutional exchanges and custody, and increased trading derivatives globally. 2019 was a slow year, but the market didn’t dry up or disappear. Lot’s of people wanted to think crypto was dead, that’s not the case, there is a real demand for this technology.
Twitter is one of the most popular social media platforms among crypto researchers and investors. Based on Twitter mentions, as well as volume from CoinMarketCap, Theta is still under the radar of the average, and even institutional, investor. Lot’s of people within the Theta community have asked big investors or influencers what their thoughts are on Theta and they say they will have to take a deep dive. While Theta is listed on the very top 3 exchanges in the world (Binance, Huobi, OKEx), its volume is still low compared to the better known household names like EOS, Tron, Ethereum, Monero, Litecoin, etc.
This is good from an investor perspective; if you have truly done your due diligence and believe in the future of this technology, then you are early to the party. As you read that last sentence, you may be thinking, “or I’m a complete dummy if I’m listening to you!” The entire crypto market has been experiencing a downturn since January of 2018. In addition to the bear market, valuations in crypto are already skewed as there is a lot of speculation and hardly any real world utility: everyday payments for goods, major corporate or governmental utilization, and other serious blockchain applications other than speculation.
The technology is not just proven through mainnet functioning (cost savings plus increased platform engagement), but also through the long history of public and private torrent trackers. Theta is basically live torrenting, or live video (torrent) streaming. The main issue with torrents was in game theory and cooperation. Users would “leech” (download and turn off the program to avoid uploading) which in evolutionary psychology is known as “defecting.” The more people who share/upload, the more sources there are for new users to download from multiple sources.
Theta has brilliantly created a dual incentive, for video networks to save money offloading bandwidth to individual users, and for users to earn money using their bandwidth to serve as a “mini-server” (caching node) and share data with their neighbors. In other words, this is a similar model to torrent, but using blockchain as a ledger to track how much data is moving between hands, basically as an accounting system. Please note, video does not transmit through the blockchain, the blockchain has corresponding traits tagged in the video to track what data goes where, but not actually to transmit video through the blockchain. The DLT (blockchain/ledger) is also used to prevent fraud and outside manipulation to the network/payment system that is commonly seen with centralized applications (hackers, malware, internal theft).
The above reasons are why Theta is underexposed within the technology and crypto communities and has a difficult barrier of understanding for the average crypto investor. Theta is a complex technology which requires an understanding of network infrastructure, video delivery, consumer behavior, game theory, blockchain, and an entirely new content delivery model.
The largest CDNs are Amazon and Akamai. Akamai has an $11 Billion dollar market cap. Akamai has ~30% of the world’s video delivery market share. Therefore, according to rough valuations, if Theta can capture 10% of that market share, it could potentially be valued at $1 Billion dollars. Theta, like Akamai, is platform agnostic as a video delivery network. However, the edge it has is increased analytics and granular feedback compared with Akamai and other CDNs. Theta also has platform integration which increases engagement, whereas Akamai is a static delivery pipeline, Theta is a dynamic data delivery network. The possibilities are endless!
There is a ton more information I did not cover here, purposefully, such as “tokenomics” and more in-depth mechanisms on how the blockchain consensus model works. This article aims to provide a deep introduction to the Theta project as well as provide reasons why it is a valuable investment against the many other crypto projects. If you like it, please like, comment, and share!
Official Website — ThetaToken.org
Official Telegram — t.me/ThetaNetwork
Disclaimer: This blog is for educational purposes only. Do not use any information provided by myself or this blog as professional/financial/legal advice or personal suggestion.