An estimated 80 percent of the companies that raised funding via initial coin offerings (ICOs) have been called scams by researchers at the Satis Group. But Justin Sun, the 28-year-old CEO of Tron, wants to prove that his company is different.
Sun, a Chinese entrepreneur who became wealthy as the creator of Peiwo, China’s version of Snapchat, has been working on a sometimes hard and ambitious battle to earn trust for the year-old Tron and its TRX cryptocurrency. Tron raised $58 million in an initial coin offering (ICO) in September 2017.
Last summer, Sun acquired BitTorrent, the 15-year-old file-sharing company that is one of the biggest decentralized networks in existence for $140 million. He wanted to take advantage of blockchain, the decentralized ledger that is both secure and transparent, and combine it with the decentralized file-sharing app, offering crypto rewards to those who share their computers for file sharing.
And this week, Sun appeared on stage with former basketball star Kobe Bryant at the NiTron Summit, which drew more than 1,000 attendees. Tron has also created a $100 million fund to convince game developers to make games that use Tron’s protocol and its TRX cryptocurrency. The promise is to create a crypto network that is both fast — at 2,000 transactions per second — and reliable.
I interviewed Sun backstage at the NiTron Summit, where he said he wanted his company to become the major blockchain platform that could one day be the decentralized alternative to the centralized internet networks of Google, Facebook, and Apple. But to make that happen, Sun has to get mainstream people like the 100 million BitTorrent users to trust cryptocurrency, even after a coin market slide that has wiped out billions in value, including taking Tron’s TRX market value down from near $20 billion to $1.6 billion today.
Here’s an edited transcript of our interview.
VentureBeat: Are you happy with how the conference is going?
Justin Sun: Yeah, definitely. We should have more. We get more developers on board. Everybody creates more trust with each other.
VentureBeat: What do you think the attraction is? What is everybody wanting to hear from Tron?
Sun: First, the Tron difference compared to other crypto and blockchain–we want to serve users better. In recent days, most of the decentralized blockchains are just communities, self-governed. There are no services or support at all from the founders. But now, with Tron, we’re trying to support developers. Not only with things like this conference, but also with fundraising and investment, or helping them find traffic. We’re helping them distribute their apps and get users. We’re answering their technical questions and helping them launch smart contracts so they can more easily deploy their apps.
All these solutions help developers get on board. It’s very professional. We want to provide world-class support to our developers. That’s one of our biggest advantages. At the same time, we’re trying to organize developers to work together and help each other as well. Building a strong developer community is also one of our goals.
VentureBeat: A lot of people wanted to hear more details here about how the integration with BitTorrent was going to work. Is that clear enough now? Can people basically go to work now?
Sun: The idea, the first step, is to find a better solution for the BitTorrent protocol itself, to improve the efficiency of the protocol. Right now the BitTorrent protocol–most of the time, people seed for goodwill. They don’t have an incentive to seed. Trackers and swarms become obsolete very quickly after people abandon them. So the first step is to make BTT (BitTorrent’s cryptocurrency) available to the people who contribute to the network.
The second step will be a move to decentralized storage plans, decentralized CDN, decentralized live streaming. But this is the first step. Right now we have 800,000 to 1 million already testing the BTT. We’re supposed to launch to 20 million users in Q1 with the test mode. In Q2 we’ll move to production mode, so other people can enjoy the protocol.
VentureBeat: The currency itself, then, when users get it, what can they then use it for?
Sun: At first we’ll give it away to BitTorrent users. They’ll all get tokens for testing. From there, we’ll do several things. Overnight, 100 million of new users will find out they get crypto. Most of them, they haven’t experienced crypto before. The old crypto market is maybe 10 million people, something like that.
Second, they’ll find out that if they spend tokens on bandwidth and transfer, their download speed will be faster. They’ll find more swarms and seeds. Those resources will be available. Sometimes you download a torrent and you find out a movie is great, the content is great, but there aren’t any people seeding it. You can’t download it. But with this, a lot of people will be continuously seeding. It’s a mutually beneficial environment. In the future, if you contribute to shared storage or shared CDN, you can get even more rewards.
This is truly a sharing economy. You share your computer resources and you get crypto. Then you can spend that crypto to get more resources.
VentureBeat: There are some obstacles in there, and I wonder how you’re going to clear them. People may have this currency, but do they need some sort of wallet or a login account to use it? Do they have to then trust that that’s going to be safe and learn how to trade or otherwise make use of it?
Sun: For most BitTorrent users, we’ll put their tokens into a hybrid solution. Most users don’t need to know about blockchain to use the tokens. We have an auto-feeding mechanism that will automatically use the token. The moment they need to learn about blockchain and crypto is when they try to claim the tokens. If you want to go to an exchange to trade them for other crypto or fiat money, at that point you need to learn more about cryptocurrency and blockchain. But you have a motivation to learn at that point, because you want to make money.
I can give a good example of how we’re adopting this new technology. When Tencent first introduced WeChat and WeChat Pay to elderly people, they used this trick. You know the Chinese tradition of the red envelopes, where you give good-luck money to each other. I might give my mother $15 of good-luck money through WeChat Pay, and she wants to put that in her bank account, so she learned how to use WeChat. That’s how WeChat got a lot of older people to use it. Tencent has a billion active users in China now. Most Chinese, even the elderly people, use it, and one of the big reasons is they had that incentive to use it.
It’s the same with BitTorrent. Before this, people might look at crypto and wonder, “Well, do I have any use for this at all?” But once they have money in crypto, they want to learn how to spend and store it. We just have to give them the right incentives.
VentureBeat: Buying BitTorrent is probably the most confidence-building thing you’ve done. But then you have all this doubt on the other side of things. The main thing you need to do when you create a currency is get people to trust it, and there are all these things that curb that. We’ve had all this bad publicity around ICOs, where 80 percent of them are scams. You’ve had a problem where people have said the white paper was copied from others. There’s some bot trading that happens. These things hurt the credibility of the effort. How do you address that and keep your momentum going to build your credibility?
Sun: Trust is very important in the crypto environment.
For Tron and BitTorrent, what we’re doing is focusing on the community. That’s why we have our Discord group, with more than 3,000 developers. We answer their questions day and night. We’re holding our Tron Accelerator competition. Everyone can discuss their different apps. We’re also building communities on Facebook, Twitter, and Reddit, and all the other major platforms. We have developers and opinion leaders in different environments and channels. That’s one of the biggest differences for us. It’s why we held this event, to bring the community together.
I believe that Tron is a more community-focused environment. Also, when it comes to the kind of misunderstandings you talked about, I can give two examples. The first example, some people have said that our technology is similar to Ethereum. We’ve been giving the community very good feedback on that. We’re distinct from Ethereum. We use a deep host mechanism that’s 200 times faster than Ethereum.
Also, for the virtual machine, we use the Ethereum tag because we want Ethereum developers to migrate to the Tron ecosystem. They’ll get a very convenient environment to migrate their code. Right now, if an Ethereum developer wants to migrate to another platform, they need to rewrite their code. Other platforms don’t use the same environment as Ethereum. Tron is fully compatible with Ethereum. They can use their original code, pass several tests, and fully deploy on the Tron ecosystems. We hope that community members will see that we care about our community when it comes to migration costs.
The second example, recently some community members have had some misunderstandings about Tron’s accelerator. They think we’ve given big prizes to a mysterious winner, about $200,000. We’ve explained the situation to the community. We’ve provided this developer a full Github rec, and the award was $20,000. We’ve provided all of our developers with documentation and a full list of developers who’ve received awards, explaining how much they’ve been awarded and why. We’re creating transparency and mutual trust in the environment, which is very important for developers.
VentureBeat: How important do you think games are for the platform? I know you did the $100 million fund. How is that going?
Sun: The first application of the blockchain is for games. Most people don’t know that. They’ve even said that blockchain doesn’t have any use for games. But if you look at the Tron blockchain, games are tremendous there. We have three to five application uploads into the Tron network every day. That’s why I was talking about 2,000 apps this year in my speech. We see massive adoption.
Most of the blockchain games on the Tron network, they’re giving rights back to the players. You can own your own custom characters. You can sell those custom characters to other players, or trade with each other. Meanwhile, developers feel inspiration because they can control their own games. If you publish your game on iOS or Android, it’s controlled by Apple or Google. They take their cut and they control your publishing. They can delete your game if they want to. But for Tron right now, you can build your traffic volumes and you don’t have to pay a middleman to distribute your game.
Some people have talked about how some of the games out there involve gambling, but that’s a very small portion. It depends on the speed of growth.
VentureBeat: The kind of games that will attract a mass market, what do you think of there? The funny thing I was thinking about, Sonic the Hedgehog is about running through loops and all that, but he’s always picking up coins, too.
Sun: [laughs] The games that are doing the most interesting things around blockchain are games that need to be transparent and earn the trust of their users. Gambling games are popular on blockchain right now because gambling needs that transparency. You need to know that if you win, you’ll get your money.
Another example would be idle games. Tron Goo is a new one. I played a lot of Idle Clash, but right now Tron Goo is definitely better, because when you train your soldiers, you can use and fight over real cryptocurrency. You can earn the money you spend back. In the future it might be possible for players to trade things like weapons and equipment back and forth. In something like World of Warcraft, where you have a huge collection of equipment, you could trade all those items online. It’ll be fascinating to see.
VentureBeat: Is there anything you would welcome as far as regulatory action, and anything you would worry about in that area?
Sun: We’re ready to fully embrace regulation here. We’ve just hired our first head of compliance, who previously worked for the SEC for almost eight years. We want to make sure we’re fully regulated in not only the United States, but also China, Korea, and Japan in the future. Blockchain is like a new operating system. We believe the world will need to embrace the blockchain, and we’re very optimistic about how it will be regulated. The SEC, I think, also sees the blockchain as a good opportunity for innovation in the United States. I’m hoping that this year the SEC will license and regulate coin-based exchanges. This year will be the year of full regulation.