What Is Tron (TRX) And How Does It Work?

Over the years, Tron has become at the forefront of the crypto boom on the Internet and managed to unite investors and developers around one major project. In today's article, we will tell you about one of the most successful cryptocurrencies, which you can apply in your everyday life. Yes, it is all about Tron, so stay tuned so you do not miss out on valuable information.

What Is Tron?

Tron is a blockchain-based digital platform primarily designed to host entertainment applications. Its main goal was to create a global system for the cost-effective sharing of digital content.

Tron was launched in 2017 and has its roots in Asia, as the creator, Justin Sun, is Chinese. Tron first gained significant attention in the next year when the developer company Tron Foundation acquired the peer-to-peer (P2P) file-sharing platform BitTorrent. This deal allowed Tron to tap into a platform with millions of active users. By August 2023, Tron boasts over 180 million accounts. And, according to Binance, the number of users on the Tron network surpassed 290 million as of February 2025. Today, the Tron blockchain is used not only for exchange and for interacting with dApps but also for creating products and projects, from financial to gaming.

Tron stood out from other blockchains of its time due to the unique features: assistance in developing decentralized applications (dApps), smart contracts, and a Delegated Proof-of-Stake (DPoS) consensus mechanism. Due to its low transaction cost and high TPS, Tron has found the utilization in the payment and DeFi space.

At the core of the Tron ecosystem lies the native cryptocurrency, Tronix (TRX).

How Does Tron (TRX) Work?

TRX works on a decentralized platform that uses blockchain and peer-to-peer technology; this P2P model eliminates intermediates between content creators and consumers, thereby speeding up transactions. It uses cryptographic keys in modules according to the protocol, and such encryption controls access to the network and its tokens. As was mentioned, Tron runs on a DPoS consensus mechanism. This allows the platform to process up to 2,000 transactions per second (TPS), making it one of the fastest blockchains.

Additionally, Tron’s low transaction fees, equaling 0.75 TRX (approximately $0.1125), lead to daily transfers. Tron uses a "bandwidth points" system to determine whether a user needs to pay for an operation. When a person makes a transaction, 1 point is burned for every byte of data. To make it clearer, each account receives 600 free points daily, enough for 1-2 transactions. A nice bonus is that creators on the platform do not pay fees, so it is more attractive for developers.

TRC-20 Key Features

The Tron platform operates on a three-layer TRC-20 protocol, similar to Ethereum’s ERC-20. The TRC-20 mechanism extends the functionality and allows developers to create and issue tokens on the Tron network. Let’s break down each layer in more detail:

• Core: this is the foundation, which includes account management and smart contracts that developers utilize to build financial projects. These include decentralized exchanges (DEXs), lending platforms, and profit-generating opportunities. At this layer, the consensus mechanism processes instructions and sends them to the Tron Virtual Machine (TVM).

• Application Layer: programmers use this layer to create products based on the TRX, like wallets and applications, expanding functionality and increasing user engagement in the blockchain space. A significant focus at this layer is the creation of dApps, covering a wide range of use cases, including gaming, social networks, DeFi, and more.

• Storage Layer: this layer suggests storing complex data, such as blockchain transaction history and smart contract status. It ensures a high level of security and information integrity.

This makes it a versatile crypto within the ecosystem.

USDT And Tron

Tron is a blockchain that runs many coins and tokens, and one of the most popular examples of this connection is Tether’s (USDT). It started issuing coins on the Tron blockchain in 2019. This measure allowed the transfer of the stablecoin with minimal fees and high speed.

USDT TRC20 became popular for several reasons. Firstly, USDT is pegged to the US dollar, due to which it has minimal volatility. Secondly, as mentioned earlier, TRC-20 is rapid and scalable up to 2,000 TPS, enabling fast operations of any volume. Moreover, on the Tron network, you can save on fees, as they are practically free.

Tron developers and team members aim to expand the ecosystem, which includes increasing the use of USDT and other coins. In the future, we can expect the ecosystem to strengthen and expand by bringing in new audiences.

Pros And Cons Of Tron And TRX

Now that we have fully explored all aspects of the Tron, take a look at the table below to see all the advantages and disadvantages of this blockchain:

Aspects	Characteristics
Pros	Characteristics - High transaction speed (up to 2,000 TPS). - Low fees (around $0.1125). - Active ecosystem development (dApps, DeFi, NFT). - Strong community support and partnerships with major companies (Samsung, ChainGPT, Opera, etc.) - Popularity of the TRC-20 standard for USDT.
Cons	Characteristics - Centralization of the network (criticism towards Tron Foundation’s management). - Dependence on the founder Justin Sun’s reputation. - Competition with other big blockchains (Ethereum, Binance Smart Chain, etc.) - Limited decentralization (fewer nodes compared to Ethereum or Bitcoin). - Risk of regulatory restrictions (due to ties with USDT and stablecoins).

Tron has created and continues to improve a global entertainment network that gives an opportunity to content creators to bypass middlemen when selling their products. Also within investing, Tron is one of the most stable cryptocurrencies in terms of price; it is almost always going up. This system remains an interesting option for those looking to create new business projects, and it can also serve as a reliable storage solution for important data.

What do you think of Tron? Write about it in the comments!