Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


How valuable is TRON (TRX)?

The folks behind TRON (TRX); the TRON Foundation, have an interesting means of combating the menace of ERC20 Tokens.

The Foundation is burning (destroying) its own ERC20 Tokens. For example, the Foundation claims to have burnt 99 billion ERC20 Tokens at its website. Moreover, those ERC20 Tokens are reportedly worth one billion TRX.

The effort has apparently met with some success, 40 exchanges and wallets have reportedly recycled TRX ERC20 Tokens for TRON (TRX). The Foundation is burning ERC20 Tokens to get people to use TRON’s blockchain-based operating system.

Why is TRON (TRX) burning ERC20 Tokens?

TRON is trying to discourage use of its biggest competitor; Ethereum, by burning ERC20 tokens.

To explain, ERC20 Tokens are Ethereum (ETH) compatible which means it can easily convert them into Ether (ETH). Ethereum is a blockchain-based operating system like TRON.

The TRON Foundation is trying to discourage Ethereum use and encourage TRON use. To that end, it is encouraging exchanges to list TRON (TRX) and discouraging ERC20 use.

Discouraging Ethereum use is necessary for TRON because of Ethereum’s popularity. For instance, 94 out of the top 100 blockchain platforms utilize Ethereum, CCN estimates. Furthermore, up to 250,000 developers could be using Ethereum tools, cryptocurrency researcher Kevin Rooke claims.

Therefore, to be competitive the TRON Foundation needs to destroy Ethereum. However, there is no guarantee burning ERC20 Tokens will achieve that goal.

Is TRON (TRX) better than Ethereum (ETH)?

The TRON Foundation claims its payment solution is better than Ethereum.

Notably, the Foundation boasts that TRON has a transactions-per-second (TPS) rate of 2,000. Markedly, the TRON Foundation estimates current versions of Ethereum will only process 25 transactions per second.

Bitcoin (BTC), on the other hand, is not even competitive. The TRON Foundation estimates Bitcoin (BTC) will only process three to six transactions per second.

If these claims are true, TRON has solved the dreaded blockchain scalability problem. The problem is the speed and volume limits that will prevent most cryptocurrencies from becoming widely used payment solutions.

For example, the king of credit cards, Visa (NYSE: V) claims its network will handle 65,000 transactions a second. Moreover, Vodafone (NASDAQ: VOD) claims its M-Pesa mobile money (unencrypted digital currency) processed 529 transactions a second in December 2016.

Will TRON (TRX) compete with Ethereum?

To compete with companies like Visa and Vodafone cryptocurrencies will need TPS rates of at least 1,000 per second. The TRON Foundation claims its TRON network offers a rate double that.

Obviously, the next challenge for TRON is to demonstrate decentralized applications (DApps) that operate at the 2,000 TPS rate. In detail, a DApp is an application that performs a task or tasks in TRON’s blockchain. A TRON-based game or a job-platform will be obvious examples of TRON Dapps.

Notably, there are several TRON DApps in existence. The applications listed at TRON’s DApp page include a fund and several games.

A DApp will need a high TPS rate to keep from crashing. For instance, nobody will play a game that crashes if more than 20 people try to logon at once.

Will TRON (TRX) make money?

Unfortunately, there seem to be no commercial uses for TRON (TRX) in existence. For example, nobody is offering TRON remittances.

Remittances, cash wired by individuals to people in other countries are big business. In particular, the World Bank estimates that $613 billion worth of remittances were sent in 2017.

More importantly, Ripple (XRP) has showed that cryptocurrency remittances will work.  Ripple claims remittances are being sent to 40 countries through RippleNet remittance corridors.

Other potential uses of TRON (TRX) include payment for audio and video content, games, phone minutes, microloans, and e-commerce. Particularly, Statista estimates that Netflix (NASDAQ: NFLX) generated $3.907 billion in revenues in 2nd Quarter 2018.

That figure was up from $3.7 billion in 1st Quarter 2018 and $2.785 billion in 2nd Quarter 2017. Therefore, Netflix revenues grew by $1 billion in just 12 months.

Under those circumstances, blockchain platform for delivery of video content could generate large amounts of cash. An obvious use of a TRON blockchain video platform will be selling videos to people in emerging nations such as Kenya and Colombia.

Is TRON (TRX) a Good Speculative Cryptocurrency?

I think TRON (TRX) is a good speculative currency because it is cheap. In particular TRON had a Coin Price of 2.4¢ on 16 October 2018.

In addition, TRON achieved a Market Capitalization of $1.607 billion and a 24-Hour Market Volume of $105.550 million on the same day. There was a Circulating Supply of 65.748 billion TRX and a Total Supply of 99 billion TRX.

TRON (TRX) was the 11th most valuable cryptocurrency on October 15, 2018, according to our friends at CoinMarketCap. I think TRON is a good speculative play because it is cheap but has a lot of potential.

TRON (TRX) could take off and rival Ripple (XRP) in value if the TRON Foundation successfully shows some commercial applications. Until then watch TRON carefully because it has the potential to explode in value or collapse.