How BitTorrent Chain is advancing blockchain interoperability.

The need for seamless asset transfers has been challenging the blockchain landscape across various networks. The BitTorrent Chain (BTTC) attempts to provide a scalable, high-volume, and low-fee exchange layer between Tron and Ethereum Virtual Machine (EVM)-based chains. Cointelegraph Research recently released a report that explores BTTC as a peer-to-peer and explores the broader BitTorrent ecosystem.

BitTorrent's evolution: from P2P file sharing to blockchain innovation

In the year Launched in 2001, BitTorrent was a game changer in the world of peer-to-peer (P2P) file sharing and accounted for one-third of Internet traffic within a few years of its initial release. However, as the Internet evolved, the limitations of BitTorrent's incentive structure became apparent, causing BitTorrent usage to decline.

In the year The acquisition of BitTorrent by Tron in 2018 marked the beginning of a new chapter. Tron expands BitTorrent's horizons beyond file sharing by integrating blockchain technology. This has led to the creation of new systems such as the BitTorrent Filesystem (BTFS) and more recently the BitTorrent Chain (BTTC). The BitTorrent (BTT) token is a utility token for each of the networks.

BitTorrent file system

BTFS is a decentralized file storage system that rewards users with BTT tokens for long-term file storage. It addresses the limitations of the original BitTorrent protocol, which relied heavily on altruism. The original protocol often succumbed to the tragedy of sharing—when individuals put their own interests ahead of the interests of the whole—and users stop sharing files after their downloads are complete. BTFS, on the other hand, incentivizes miners to keep files longer with BTT token rewards as an incentive.

Currently, more than eight million storage miners are active on the network, and more than six pebbytes of data are stored. The implementation of BTFS has been successful in the BitTorrent ecosystem and the development of BTTC has laid the foundation for further blockchain integration.

BitTorrent Chain: Connecting blockchain networks

BTTC was created to address the need for seamless asset transfer between different blockchain networks. It is designed as an extensible interoperability layer that connects Tron and EVM-based chains. Using a proof-of-stake-sidechain network from Cosmos' Tendermint software stack, BTTC has achieved high transaction volume and low fees. Validators hold the BTT on Tron, and cutoff conditions are applied to ensure the integrity of the network.

BTTC facilitates asset transfer across multiple chains including Tron, Ethereum and BNB Smart Chain. It uses a lock-and-mint model for these transfers, tokens are locked on a chain and generated on BTTC. The network processes approximately 7,000 transactions per second with a three-second block time. Average gas charges are less than $0.01. Security and reliability are maintained by 12 active verifiers, supported by more than 6,200 stakeholders (Figure 1).

– 12 BTTC validators in total shareholding. Source: Shipping Scan.

To further improve the user experience, BTTC includes a relay service that accelerates asset extraction across different blockchain networks. Under normal circumstances, the need for checkpoint verification to withdraw assets from BTTC to another blockchain involves a delay of 15 to 30 minutes. Relayers are independent service providers who facilitate quick exit by handling cross-chain communication and pre-paying the necessary gas charges on the target chain. They do this in lieu of a service charge, which is typically 120% of the cost of gas for exit transactions.

BTT token

The backbone of the ecosystem is the BTT token, which is linked to BTFS and BTTC operations. In the year It has a fixed supply of 990 trillion tokens in 2022, following a renewal from the initial 990 billion tokens (Figure 2).

Each year, approximately 7 trillion BTT tokens are distributed as shares and verification rewards, which is 0.7% of the total BTT supply. This distribution encourages active participation from users, offering an attractive annual yield of 17.65% to those who invest their BTT tokens.

Currently, 39.9 trillion BTC are held in stock, which is 4% of the supply. In addition to inclusion, BTT serves as the main currency in BTFS to reward storage miners who store data on the network. The BTFS system generates approximately 7 billion BTT in organic protocol revenue per day, and miners receive an incentive of around 7.5 billion BTT per day.

– BTT supply sales program. Source: Binance Research

Future directions

Looking ahead, BTTC is expected to play a central role in Tron's upcoming initiatives, particularly its integration with the Bitcoin ecosystem. Future developments include the expansion of capped Bitcoin assets on the Tron and BTTC networks, collaboration with Bitcoin Layer-2 projects, and the creation of a Layer-2 solution that integrates Tron, BTTC, and Bitcoin. This allows Tron and BTTC to look at the security and liquidity of Bitcoin with the speed and cost advantages of BTTC's staking system.

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