TL; DR: Theta Network, a decentralized CDN powered by a new blockchain, aims to incentivize users to share bandwidth through token economics. The open-source network and protocol, introduced as a mechanism for video streaming, has potential use cases for multiple content verticals. With the launch of Theta Mainnet Version 1.0, Theta Network is moving out of its experimental stage and onto the market.
The next time you’re told you play video games too often, here’s a rebuttal to consider: Skilled esports players, the gaming equivalent of traditional athletes, are earning thousands of dollars per year in tournament prize money. Gaming is no longer purely escapism; through esports, it’s quickly becoming a billion-dollar industry and global phenomenon, complete with fans, sponsors, and merchandise.
SLIVER.tv, a next-generation esports entertainment platform, makes the experience even more appealing by allowing spectators to record, view, and stream games like Fornite, League of Legends, and CSGO in fully immersive, 360-degree virtual reality (VR) video.
But VR streaming consumes massive amounts of bandwidth. For SLIVER.tv, this became a problem: With fans accessing live gaming events, often in geographical clusters based on the location of live tournaments, about 50% of the company’s monthly costs were going to its content delivery service.
As a solution, the company created Theta Network, a decentralized, peer-to-peer content delivery network powered by an innovative new blockchain.
“As we started developing Theta to power SLIVER.tv, we quickly realized that if the platform can efficiently offload bandwidth from centralized CDN networks, it could have a lot of potential for different video platforms, not just mid-sized esports sites,” said Wes Levitt, Head of Strategy at Theta Labs. “That’s when we had the idea to transform Theta from a subsidiary into a technology to be used by many data platforms.”
Today, the platform facilitates next-generation content delivery through decentralized streaming. The open-source network welcomes developers and partners while incentivizing users through token economics. With the launch of Theta Mainnet Version 1.0 and potential use cases for multiple content verticals, Theta is poised to disrupt the content delivery network in a significant way.
Next-Gen Content Delivery Through End-to-End Decentralized Streaming
The Theta blockchain is a decentralized ledger that supports the Theta token ecosystem, a currency exchange that motivates end users to share bandwidth and storage resources. Developers designed the network specifically for the video streaming industry, which Wes said is the company’s bread and butter. But Theta is also navigating different use cases, such as video on demand (VOD) and software downloads. Streaming the latest “Game of Thrones” episode, for example, is essentially akin to livestreaming because of the number of people viewing the content.
“Video is our entry point, but we want to focus more broadly going forward,” he said. “There’s nothing specific about video that makes this all work — it can be any content delivery, any data delivery, as long as it has the right kind of network topography that makes sense for a peer-to-peer network.”
It wouldn’t make sense, for example, to use a peer-to-peer network for a YouTube video that only one or two people around the world are watching. Content that’s being shared frequently, on the other hand, is a perfect fit.
“We’re looking into use cases for things like software patches or game updates,” Wes said. “If Fortnite puts a game patch out that millions of people are going to download almost concurrently, with a lot of them in a close network area, it makes sense to use a peer-to-peer network.”
Sharing content with peers on the network is a breeze; it doesn’t even require a download. “To use SLIVER.tv as an example, if you jump on the stream that is powered by Theta in the background, you can immediately start sharing that content with nearby peers by doing nothing more than clicking a checkbox to acknowledge that you’ll be sharing on the network,” Wes said.
Incentivizing Stakeholders to Share Bandwidth Through Theta Tokens
Theta is not the first peer-to-peer network out there or even the first decentralized CDN. But it is the first end-to-end solution for decentralized live video streaming to provide technical and economic solutions.
Tokens on the Theta blockchain encourage individual users to share unused computing and bandwidth resources for video streams. If there’s adequate network participation, most viewers will pull streams from peer resources, allowing video platforms to slash their CDN costs.
“The issue has always been how to get people to consistently and reliably contribute to the network,” Wes said. “And that’s why we think when users are incentivized, even if it’s a small amount per video segment, over time it can provide meaningful value if you continue to share over the course of a month.”
Wes said Theta is intended to complement a CDN such as Akamai, not fully replace it. “But if using the same network you can offload 50% or 60% of your content, you can save enormously on your bandwidth costs month to month,” he said.
Theta’s partnerships and initial work with companies such as Samsung VR and CJ Hello illuminated some interesting revenue implications. Once users start earning rewards on Theta’s platform, they could simply treat them as earnings. Or, partners could suggest trading in the tokens for discounted premium content or monthly subscriptions. This mechanism could create robust networks and increase revenue streams.
“Phase two is determining how we use these reward systems to change customer behavior, so they’re more engaged and produce incremental revenues beyond what they would have had before,” Wes said. “That’s what we think is going to be a real game changer.”
A Transparent, Open-Source Network and Protocol
Wes said Theta strives to provide a transparent development process in line with the open-source community. The company frequently releases its code to GitHub, welcoming developers and partners to build on the network.
“I think that comes with the culture around blockchain development, which is deeply ingrained in an open-source, community approach,” Wes said. “Obviously, we’re still a company with a development team deployed by Theta Labs Inc., but that said, every day we’re talking to folks on social media or our Telegram channel about our latest development updates.”
Theta takes the community’s feedback seriously. “It influences our future development, especially in cases where something we thought would incentivize the user turns out different than what they were looking for,” Wes said.
The organization also consults with a team of strategic partners, company investors, a media advisory council, media advisors, and blockchain advisors. Notable members of these advisory groups include Steve Chen, Co-Founder of YouTube, Justin Kan, Co-Founder of Twitch, and Travis Skweres, founder of CoinMkt — one of the first U.S. bitcoin exchanges.
Theta employees, many of whom came from SLIVER.tv, run a tight ship. “I think the biggest thing that has made us successful in a short amount of time is that we’re a small team of about 25,” he said. “Because we work closely, we’ve created an agile, fast-moving environment where if things break, we pivot and quickly fix them.”
Project Update: The Launch of Theta Mainnet Version 1.0
On March 15, 2019, Theta will launch the production version of the Theta blockchain, known as Theta Mainnet. Until now, users have been experimenting on a test network, but couldn’t actually earn monetary units. “Starting on March 15, the actual incentives will be built into the system and users will be directly rewarded for what they’re contributing to these video platforms,” Wes said.
Theta originally expected to launch the platform earlier, but initial work with Samsung VR, MBN, CJ Group, and others provided early feedback necessitating additional extensions. Waiting until March 15 also ensures that all major exchanges will support the token swap. Finally, the extra time has allowed for more code audits and security and scalability testing.
“We’re all heads down making sure everything’s running smoothly out of that launch,” Wes said.