What is Tron, Tronix, and TRX?
Tron aims to be a decentralized entertainment ecosystem. To achieve its aim, it is expanding decentralized digital content applications by making it easy to create and deploy. The Tron mainnet was launched in 31st May 2018 and the native coin is called Tronix (TRX). The project also launched a child token ecosystem, with TRC10 and TRC20 tokens (similar to Ethereum’s ERC20).
TRX can be used by consumers to pay for content they want to access on the Tron network. In return, content producers can exchange their earned TRX for other cryptocurrencies or use it to pay for services on the Tron blockchain provided by entities such as DApps (see below).
Tron Virtual Machine (TVM) was also launched shortly after the launch of Tron mainnet. TVM is a custom-built blockchain system, enabling Tron developers to implement and experiment developing Decentralized Applications (DApps) on Tron. With a low setup cost and the accessibility of TVM, many TRC10 tokens were created.
So, what are TRC10 and TRC20 tokens?
With TRC10 tokens, Tron developers can create their own custom TRC10 token, making it incredibly easy to launch their DApps or Initial Coin Offering (ICO) on the Tron mainchain. It is so simple that the only requirement to creating your own custom TRC10 token is to spend 1024 TRX and go through a few simple steps on the Tronscan page.
Just as ETH transactions cost GAS, transactions involving TRC10 tokens cost Bandwidth Points (BP). BP is obtained when TRX holders freeze their TRX in an applicable wallet. By freezing their TRX, their TRX will be held for 3 days on the Tron chain, and in return, TRX holders will gain BP to be used to power transactions or other activity.
TRC20 tokens can implement extra logic not possible with TRC10 tokens. A key difference is that transferring a TRC20 token consumes both BP and Energy. TRC10 is not supported in TVM and smart contracts yet. In the future, Tron may provide the tools to migrate from TRC10 to TRC20.
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