The founder of controversial cryptocurrency Tron has bought peer-to-peer file transfer giant BitTorrent for an as-yet undisclosed sum.
BitTorrent’s management staff has since confirmed that the buy took place, which has been crosschecked by various media outlets with unnamed company stakeholders.
No public information on the deal – including and, most importantly, the purchase price – has been released, but the fact that the deal took place is making waves across the cryptocurrency world. At the center of the hubbub is Justin Sun himself, who occupies a status in the cryptoworld somewhere in the wide gulf between visionary and scam artist, depending on whom you ask.
BitTorrent’s roots extend all the way back to the primordial internet of 2001. New York computer programmer Bram Cohen created the protocol and the associated program that would become BitTorrent as a way to seamless transfer files in a peer-to-peer format. He was a veteran of the ultimately doomed MojoNation project after dropping out of the State University of New York at Buffalo. MojoNation can be viewed as a proto-BitTorrent, in that it allowed files to be broken up into encrypted chunks and spread among a network of computers. Cohen’s contribution was tightening the core MojoNation idea to allow fast downloading of large files from a variety of sources. The more popular the program, the faster the ultimate download. The biggest innovation was Cohen’s tit-for-tat system. This eliminates file leeching by requiring content to be shared in order to download. Again, the more sharing you do, the faster your personal download speeds.
BitTorrent soon gained a substantial amount of notoriety for its ability to greatly improve the sharing of pirated content, especially large files, like movies and song files. Cohen maintains this was never his intent, although for the vast majority of the techno-geek world, BitTorrent is shorthand for piracy.
Valuing BitTorrent has always been a tricky proposition due to its host of not-quite-legal uses. Cohen founded BitTorrent Inc. in 2004 with $8.75 million in raised capital. Although the company boasted over 170 million users per month at one juncture, the company struggled to make money and attempted a variety of ventures.
The outside-in view from tech watchers like Wired magazine was that BitTorrent faced a very sticky problem – when your main clientele consists of pirates, it’s difficult to get them to pay for anything. To remedy that situation, BitTorrent attempted a variety of music and file-sharing services, none of which really took off. The beginning of the end for BitTorrent successor company DSJ was clear from the start – the business got off the ground by promising shares for a $10 million promissory note, which the company was unable to pay when it came due in October 2016. The company subsequently closed most of its office space and laid off a large proportion of its staff, but it continued to create new products, like BitTorrent Live.
Sun Is Rising
If BitTorrent has always enjoyed a good deal of notoriety in the tech community, Justin Sun appears to be a great fit as the new headman.
Sun really exploded onto the cryptocurrency scene under the wing of Alibaba founder Jack Ma. Ma selected then-26-year-old Sun to study at his Jack Ma Hupan University for entrepreneurs – a university with an acceptance rate reportedly lower than Princeton. He subsequently became the CEO of Chinese voice streaming app PEIWO, which boasts more than 10 million users, and he is a chief representative and advisor at Ripple Labs, which is the force behind top centralized cryptocurrency and banking protocol Ripple.
Then came Tron. Tron (TRX) is a cryptocurrency that aims to be a platform, similar to Ethereum, but with a focus on content storing and sharing. TRON’s total supply is huge, even by cryptocurrency standards – 100 billion TRX. However, the coin’s market cap is equally impressive. As of June 2018, Tron boasted a total market cap of almost $3 billion, putting it in the top 10 of all cryptocurrencies by market as measured by CoinMarketCap.com.
Read our guide to Tron TRX
Tron – and Sun, by extension – is a polarizing presence in the cryptocurrency industry. Portions of Tron’s white paper were allegedly plagiarized, which Sun has chalked up to improper translations.
“Our original version of the white paper is in Chinese and we have a very detailed reference to the latest Chinese version,” Sun wrote on Twitter in response to the plagiarism accusations. Volunteers translated the English, Korean, Japanese, and Spanish versions. The translations missed numerous important details, not just references.
That explanation has failed to satisfy some crypto watchers, particularly since Tron also allegedly cribbed bits of code from other projects.
Sun has also drawn criticism from overhyped partnerships and quasi-partnerships on Twitter. In some cases, Tron critics note, Sun has inappropriately hinted that Alibaba may soon become a Tron partner, although no official link between the two beyond Sun’s enrollment in Ma’s university has yet come to light.
In short, Sun has earned a reputation as a selfless promoter, and he rarely disputes that moniker. The controversy centers around whether Sun is overhyping a coin with a colossal market cap, a possibly plagiarized white paper, and few big, tangible partnerships. It’s easy to visit cryptocurrency forums and see reams of users skeptical of Tron’s promises – and incredulous that the coin still commands top billing in a very crowded crypto field.
Details and Devils
Details are scant on what exactly Sun wants with BitTorrent, which has a storied list of problems generating revenue. On the surface, BitTorrent and Tron seem to share a common affinity with file-sharing protocols, and so there may be a connection there that’s yet to be explored. BitTorrent, after all, could be considered the grandfather to the decentralized file sharing now possible through blockchain systems. It’s also equally possible that BitTorrent was a relatively cheap big name in the tech space, almost tailor made for a Sun tweet announcing another quasi-partnership.
Reactions to the buy on the Tron Reddit forum were – not surprisingly – largely positive, although some users questioned why Sun bought BitTorrent personally instead of guiding the Tron Foundation to do so.
However, a healthy undercurrent of skepticism surrounded the possibility of tokenizing BitTorrent.
“Why would I pay to get something I already get for free? Yeah, it would be nice to get paid to seed, but I already do it… for free,” said one user, echoing the problem BitTorrent has faced many times – unsuccessfully – in the past.
“Won’t this bring serious lawsuits to people seeding copyrighted content, with an incentive to get paid?” another user asked. “I mean, lots of people can get away with it now cause they use their own resources, but as soon as you become a ‘business’ for sharing copyrighted content you are gonna get hit hard with serious penalties.”
It’s too early to say what the future holds for either BitTorrent or Tron. The purchase price has still yet to be disclosed. While it’s legally interesting that Sun bought BitTorrent personally instead of through the Tron Foundation, that doesn’t mean that there isn’t some kind of integration plan in the works.
Whether that integration proves successful at finally monetizing peer-to-peer sharing, however, remains anyone’s guess.