As video streaming accounting for an increasing part of Internet traffic today, how to delivery videos with high streaming quality and low costs becomes a big challenge for the industry. Through building an innovative peer-to-peer delivery protocol with decentralized streaming nodes, Theta utilizes the blockchain technology to make itself a next-generation video delivery network.
In today’s world, video streaming is still facing significant challenges. As video streaming has become an enormous market with various segments, the delivery ecosystem evolves a bit slower . The video delivery currently depends closely on Content Delivery Networks (CDN). Due to the limited number of data centers under the network, most of the viewers are not close enough to these data centers. This results in bad user experience on watching the videos. Moreover, CDN bandwidth cost is prohibitive. Using or maintaining the CDN services may cost streaming sites amounts of dollars. Theta is aiming to solve these challenges with its uniquely mesh streaming network with an innovative blockchain.
1. The Mesh Streaming Network
By building a resource-sharing network of the memory and bandwidth, Theta redefines the streaming delivery. In Theta’s network, each user could become both a viewer and a caching node. When watching the favorite streamer or being asleep, users could share their extra bandwidth to relay videos to local viewers. The delivering among these nodes would cost less time compared to the delivery through CDNs. Also, because viewers will work as caching nodes to relay the video resources, the CDN bandwidth cost will be reduced. Close-Distance sharing could effectively improve stream quality and loading times.
Based on this mesh streaming network, an efficient ecosystem is introduced to the streaming market. Caching nodes get tokens for offering the streaming services to viewers, and viewers could earn tokens for watching advertisements. Viewers then use these tokens to gift to their favorite content makers or to buy premium services on the streaming sites. Advertisers can fund advertising activities with tokens, and streaming sites could reduce their CDN costs and improve other services to enhance user engagement. With Theta’s mesh streaming network, more revenue could be generated for video platforms and more contents could be created for users.
2. Multi-Level Consensus and Governance
As we described, the Theta token is necessary to power the entire ecosystem. It gives incentives to users to share their memory and bandwidth. It helps the streaming sites and content creators to participate in the market more actively. Nevertheless, it is quite a different story to build a blockchain associated with a streaming network, compared to other blockchain networks.
There are several problems that needed to be addressed. First, a live stream can have thousands of concurrent viewers and then creates thousands of micropayments per second. This high transaction throughput requirement exceeds the capability of other chains like Bitcoin and Ethereum. When sharing resources as caching nodes, users usually require the rewards to be confirmed quickly so they could keep serving the next viewer. And other streaming functions like gifting to live videos creators also ask for a fast consensus. To solve the problems, Theta applies a multi-level consensus based on Proof-of-Stake (PoS).
Theta allows a small set of nodes (ideally 10 to 20) to form a validator committee. The committee is selected by an election process or a randomized process. These validators will produce blocks at a very fast speed. After the validators reach the consensus, the chain will be examined by thousands of nodes called guardians. Guardians only examine the hash of the checkpoint blocks, whose heights are a multiple of some integer specified by the blockchain. The guardian network reaches consensus when more than 2/3 of the guardians have the same hash for the checkpoint block. Both validators and guardians are required to lock up some amounts of tokens. When malicious activities are performed by the nodes, the tokens they locked will be slashed.
3. New Features of Theta
3.1. Aggregated Signature Gossip
When broadcasting the message, it is not efficient if using a simple all-to-all scheme. If each guardian node sends its signature to all other nodes, the communication complexity would be ultra-high as there are thousands of guardians. Theta applies an aggregated signature gossip scheme to improve the efficiency of broadcasting significantly.
Instead of receiving signatures from all, each guardian node will receive the partially aggregated signatures from its neighbor nodes and then broadcast out this combined signature to its neighbors. Suppose a node has four neighbors, each of which also has three other neighbors. Then the broadcasting would speed up exponentially. It’s like a virus spreading, and each node could then reach any node very quickly.
3.2. Resources Oriented Micropayment Pool
Because there can be millions of viewers watching videos at the same time, the number of concurrent transactions will be remarkably high. Theta implements an off-chain micropayment pool to allow users to make transactions with caching nodes more efficiently. This improves the scalability of the blockchain by reducing redundant interactions on the main chain.
Suppose Alice wants to watch some videos, she would create a micropayment pool and pay deposits in advance. The deposits will be used to fulfill her off-chain transactions. Another collateral is required to deal with the double-spent problem. After that, Alice will receive a proof and is able to watch videos powered by caching nodes and finish all her transactions off chain. The caching node will package all micropayments and submit them on chain to retrieve tokens from Alice’s deposits. If the caching node must quit the service before the video was finished, Alice could continue to retrieve video resources from other peers.
4. Dual-Tokens Economics Model
The Theta blockchain uses a dual currency system to implement proper governance and efficient management of operations. The Thetatoken is used only for staking while the Theta Fuel token is used for operations including micropayments and smart contract operations. Two tokens will work together to improve the stability of the Theta system.
Theta token is the governance token for securing and governing the blockchain. Users need to stake Theta token to become a validator or guardian. The utility token of the Theta blockchain is called Theta Fuel. It serves as a payment medium in transactions such as paying caching nodes and gifting to content creators. It will be traded frequently and has high liquidity in the market. The validator or guardian will get Theta Fuel as rewards to their contributions. The rewards are proportional to the amount of Theta each node stakes relative to the total amount of Theta staked. The expected amounts of Theta needed for staking for a guardian node is approximately 100,000 to 1,000,000 Theta tokens.
Theta token has a fixed total supply of 1 billion and has no inflation. For each Theta token, the holders will get 5 Theta Fuel when the network launches on March 15th, 2019. In other words, there will be 5 billion Theta Fuel in supply at the beginning. After the initial distribution, the Theta Fuel will increase at an initial annual target rate of 5%.
Theta is a native blockchain and open-source infrastructure for the video streaming industry. It creatively builds a decentralized video streaming network and utilizes the spare resources of individuals to solve the challenges the traditional industry faces. Moreover, it applies an innovative consensus layer especially suitable transactions on the video streaming network. With all these novel features, Theta brings an unprecedented and exciting model for the video streaming industry.
 Theta White Paper, https://s3.us-east-2.amazonaws.com/assets.thetatoken.org/Theta-white-paper-latest.pdf?v=1551471339.837
 Why We’re Introducing the Theta Token & Blockchain to Revolutionize Video Delivery, https://link.medium.com/SFZnuOXMNU
 Theta Network: More revenue for video platforms + more content for users, https://link.medium.com/OUOzoMQMNU
 Theta Fuel — The operational token of the Theta Network, https://link.medium.com/xjKxqeQfjU
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