Earlier this month, a Binance blog post announced support for a long-rumored Tron-backed token for the BitTorrent filesharing platform. Binance is the world’s most active cryptocurrency exchange, with volume over the past month in excess of $21 billion. Acquiring a listing on Binance is often seen as hugely important to legitimizing projects and helping them reach a wide audience of cryptocurrency traders. By becoming one of the first projects to debut on the new Binance Launchpad, the BitTorrent token (BTT) will instantly become highly visible and easily accessible to Binance’s enormous userbase.
The token itself is intended to be used for attaining preferential download speeds when using BitTorrent, as well as for rewarding content creators and other contributors to the network. BitTorrent is used by more than 100 million each month, with some estimates claiming it accounts for as much of 21% of all upstream internet traffic. If the new BitTorrent token is used in conjunction with just a fraction of activity on the network, BTT can easily become one of the most utilized cryptocurrency tokens.
Despite the obvious potential for success, Tron’s planned new token has attracted some heavy criticism. This is nothing for new for Tron, a project that has long divided cryptocurrency enthusiasts. As we explained back in October, Tron is hailed as one of crypto’s most exciting projects and derided as mere marketing hype in equal measure. For Tron’s many critics, the new BitTorrent token launch is an unnecessary attempt to generate more cash for the project and its controversial founder, Justin Sun.
Some of the most pointed criticism has come from Simon Morris, BitTorrent’s former chief strategy officer. In a recent interview with Breaker Mag, Morris described Tron as “basically a marketing machine layered on a very thin veneer of technology,” while characterizing its prominent figurehead Justin Sun as a clueless Trump-like leader with a knack for canny marketing tactics:
“It’s very clear that Justin is very strong at marketing. He has a very nice personality from a marketing point of view. He doesn’t have a technical bone in his body. He wouldn’t understand, technically, anything. But the approach that bothered me was, the very sort of Trumpian approach—if you get caught in a lie, the answer is you double down on the lie. [It was] the endless doubling down on lies that made me think it wasn’t going to be a fit.”
Morris has no issue with the concept of a BitTorrent token. During the Breaker Mag interview, he explained that utilizing automated auctions for download queue priority could increase BitTorrent’s network speed by as much as 40%. Morris’ issue is instead with Tron’s ability to handle the level of network activity which BitTorrent experiences:
“The transactional capacity we [were] looking at was needing hundreds of transactions a second just to get started. It’s simply not there. You hear all the bullshit out there, oh, this does 10,000 transactions a second. It’s all crap. We were going to melt Tron. Literally destroy it.”
Morris suggests that Tron will instead utilize some form of central server to handle BitTorrent’s incredibly high transaction volume. This could then be characterized as “a Lightning Network for Tron,” similar to the long-proposed Lightning Network system which aims to increase Bitcoin’s transaction efficiency by processing transactions without broadcasting them to the entire blockchain.
Posting to the official /r/Tronix subreddit, Justin Sun confirmed BitTorrent token transactions will not occur completely on-chain:
“Our project whitepaper was published on Jan. 3rd, a full week before the online article, and answers some of the very questions posed by the former employee. In the whitepaper, we write: “BitTorrent Inc. will deploy an ‘on-chain/off-chain exchange,’ which exists to facilitate the transfer of tokens between a high-performance private ledger and the public Tron blockchain.”
In plain language, that means we are taking a hybrid approach. Why? Transferring files using the BitTorrent protocol involves splitting them into tiny pieces for exchange with many peers. Each exchange requires a micropayment, which is made off-chain. When the exchange is complete, these payments can then be anchored by on-chain consensus — a common approach on many blockchains today.”
But if the proposed new tokenized system is effective at speeding up the BitTorrent network and generating new revenue for the company, does it really matter whether it runs on the decentralized Tron blockchain network?
Morris thinks that this does matter. While major social networks such as Facebook and Twitter have utilized BitTorrent to distribute network updates, and Blizzard has allowed gamers to download World of Warcraft using the protocol, its primary use case has long been seen as piracy. Despite attempts from Internet Service Providers (ISPs) and powerful media producers have to throttle or block the network, it has survived. Morris depicts BitTorrent’s resilience as being completely dependent on its decentralized nature. In a series of Medium posts published in December, Morris is unequivocal in stressing the importance of decentralization to BitTorrent’s survival:
“…the open and decentralized architecture of both the technology and the community meant that it was essentially impossible to shut down Bittorrent file-sharing. Other file-sharing systems came and went, always crippled by some centralized Achilles-heal, but Bittorrent persisted. While there have been endless legal, regulatory and technical attacks on different parts of the Bittorrent ecosystem, the ecosystem has remained impervious and still operates today much as it did over a decade ago.”
Having worked on BitTorrent for a decade, Morris is certainly very knowledgeable on the protocol’s strengths and weaknesses, both before and after Tron purchased it. However, having left BitTorrent soon after Tron’s acquisition, some would caution that he may be simply a bitter ex-employee with an axe to grind. And that is how Tron seem to see things in a response to Morris’ claims in the Breaker Mag interview:
“Morris appears to have little insight into BitTorrent operational plans since his departure… Actions and execution will prove louder than the words of a disgruntled former employee.”
Highly upvoted Reddit posts have made clear that there is a lot of negative sentiment toward Tron’s latest venture. The most upvoted post of the past 7 days on the /r/BinanceExchange subreddit begs the exchange to reconsider including the new BitTorrent token on the Binance Launchpad. Characterizing Tron and Justin Sun as “marketing hustlers… who barely understand any tech,” the submission was cross-posted to other cryptocurrency-focused subreddits, with a vast majority of responses agreeing with the author’s sentiment.
Others to have chimed in with criticism include Doge coin creator Jackson Palmer, who depicted the new BitTorrent token as “a scammy ICO” on Twitter.
But the market has reacted positively to Tron’s move. Tron was trading at just under $0.02 per token on January 1, rising to above $0.03 on January 10. The pump has tailed off since then, but Tron is still at a level not seen since last August.
And Binance CEO Changpeng Zhao has also expressed enthusiasm for the project via Twitter.
The BitTorrent token is scheduled to launch this Spring, with current Tron holders receiving an airdrop of BTT tokens. Whether this proves to be a watershed moment for cryptocurrency adoption or empty marketing hype is a question that should be answered soon after. For now, Tron and Justin Sun are again proving themselves the most divisive topic in crypto.