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China Rates TRON as the 2nd-Best Cryptocurrency: What’s Behind the Optimism?

Last Updated March 4, 2021 2:54 PM
Joseph Young
Last Updated March 4, 2021 2:54 PM

A government agency in China has rated TRON, the third largest decentralized application (Dapp)-focused crypto project, as the second-best crypto asset in the world behind EOS.

The Center for Information and Industry Development (CCID) under China’s Ministry of Industry and Information Technology rated TRON highly in several categories including applicability and technology.

While TRON secured 96.8 points in technology and 24.6 points in applicability, Ethereum, the most valuable smart contracts protocol in the global market, fell short at 73.8 points in technology and 29 points in applicability.

Why is TRON So Highly Rated?

Since October 2018, within four months, the daily transaction volume of the TRON blockchain network has increased from 130,000 transactions per day to 1.7 million transactions by over ten-fold.

TRON Transaction Volume (Source: TronScan.org)

The TRON blockchain network is able to maintain a large transaction capacity due to the structure of the network that relies on a group of nodes called Super Representatives that play a vital role in TRON’s Delegated Proof of Stake (DPOS) consensus mechanism.

Unlike Ethereum or Bitcoin that rely on the Proof of Work (PoW) consensus algorithm which requires miners to verify transactions by using electricity and ASIC miners, blockchain networks like TRON and EOS are more dependent on a certain group of nodes or network representatives voted by other nodes.

There exists a tradeoff between decentralization and scalability in blockchain development; for a blockchain network to achieve high transaction capacity in a short period of time without second-layer scaling solutions, it has to compromise on the level of decentralization on its network.

The common criticism against EOS and TRON is the relatively low level of decentralization in contrast to Ethereum or Bitcoin.

Previously, Ethereum co-creator Vitalik Buterin said about transactions per second (TPS)-focused blockchain projects:

“When a blockchain project claims ‘We can do 3,500 TPS because we have a different algorithm,’ what we really mean is ‘We are a centralized pile of trash because we only have 7 nodes running the entire thing.’”

With that said, the upside of operating a scalability-focused blockchain network is the ability to attract DApps and developers with favorable data-processing environments.

According to Justin Sun, the founder and CEO of TRON, the blockchain network recently surpassed both Ethereum and EOS in the total number of new users at over 164,000.

As Dapp.com previously reported , TRON has been aggressively promoting its Dapp ecosystem with a large budget to accommodate developers and projects.

In a 2018 report, Dapp.com researchers revealed that the project has spent $100 million on TronArcade and has launched a $2 billion initiative called Project Genesis to grow its Dapp market.

“TRON is the most ambitious in the dapp field, with a $2 billion Project Genesis launched in the second half of the year. In addition, it spends $100 million on TronArcade to promote its dapp ecosystem,” the report read.

China’s Ministry of Industry and the CCID have shown their preference of scalability-focused blockchain projects in the past several months. It is likely that TRON’s active user base, large transaction capacity, and the rapidly growing number of Dapps appealed to the government.

TRON Expects Accelerated Growth

In the months to come, TRON CEO Justin Sun said in an interview with Huoxing that he believes the crypto market has achieved a bottom and it could lead to an increase in the adoption of the blockchain by Lightning Network and BitTorrent users.

He said :

I think it has already hit the bottom, and the bear market is over…

For this year, I think Bitcoin will fluctuate between $3,000 and $5,000. The opportunities for market breakthroughs this year include the explosion of the DApp ecosystem, the large-scale application of the Lightning Network, and the three major opportunities for BitTorrent’s 100 million users to enter the cryptocurrency market.

Click here for a real-time TRON price chart.