What Is Energy in Tron Network?

In previous articles in the series dedicated to the Tron ecosystem we have already discussed the resources that are used on the blockchain platform to provide the necessary bandwidth and restore the consumed energy. These resources provide a significant reduction in the cost of transactions, high-quality execution and exchange of smart contracts, creation of new blocks, etc. This is the part of the tasks performed by the resources that is visible to blockchain users. But this visible part is the result of their main purpose: to ensure the stability of the network without overloads.

If you have read our previous publications, you already understand that we are talking about Bandwidth and Energy – resources that no blockchain platform with any cryptocurrency technologies can do without. In this article, we propose to discuss in more detail the Energy resource, which is required to form new blocks, execute transactions and smart contracts. At the same time, it retains the main functions of ensuring network security, in particular – protection from fraudsters.

Why did we start with Energy? Because Bandwidth is provided free of charge to all network participants in equal shares, the volume of which can change. So far, in the Tron ecosystem, the amount of this daily resource provided to ensure transaction throughput is only growing. At the time of writing, 5,000 Bandwidth Points are received daily for each account in the Tron network. This resource, of course, can be renewed in other ways to make transactions cheaper, which is what it is actually intended for.

But the Energy resource is necessary for almost all operations in the blockchain, including smart contracts. It was introduced into the Tron ecosystem to prevent fraud using spam transactions, which hindered the development of dApps for both developers and users of these decentralized applications. Fraudsters were attracted to Tron by the fact that large crypto market participants began to move to this blockchain, which carried out transfers of significant amounts using the USDT stablecoin, tied to the dollar exchange rate. The introduction of Energy stably renews the nodes' computing resources spent by participants in the eco-platform, creates barriers to fraudulent spam transactions for small amounts and protects smart contracts, including financial ones with asset exchange, as well as developers and consumers of decentralized applications.

Energy for Smart Contracts in the Tron Network

Talking about Energy without connection to smart contracts is pointless, because one of the purposes of this resource is to be fuel for smart contracts.

As we reported earlier, Justin Sun initially founded his brainchild as a blockchain for producers and users of entertainment content. The idea of his own cryptocurrency appeared later, although it is not provable. It is quite possible that Justin already had plans for cryptocurrency.

In any case, the first standard that was provided to users was TRC-20, a standard that was reworked to Tron's needs from the first blockchain with smart contracts, Ethereum. The Ethereum network was experiencing scaling issues at the time, and Tron provided a high-bandwidth ecosystem due to the lack of cryptocurrency mining technology. This new standard was written in the same language as the standard of Ethereum, and was fully compatible with the decentralized applications that were developed and used on the Ethereum network. Whatever happened between the founders of these popular ecosystems later, such compatibility was beneficial for both networks, especially when smart contract development experienced an unprecedented boom in 2020 a couple of years later. In addition, the standard of Ethereum has been used as a source for more than just Tron.

To understand the nature of smart contracts, you should know how the blockchain principle differs from a database in the classical sense. In the blockchain, there are no servers where this database is stored, and access has different restrictions for users of different levels. The blockchain database is interconnected information blocks, access to which is available to all participants of the blockchain, that is, it is essentially stored on the PC of each user, and is also constantly updated.

These blocks contain information about all transactions carried out in the blockchain ecosystem. You can determine for yourself which database storage system is easier for scammers to penetrate. Hacking even a few computers will not compromise the security of the blockchain, and it is almost impossible to penetrate all the devices where the blocks are stored.

Just the day before this article was written, Tron teamed up with Tether and TRM Labs to fight against the illegal use of the USDT stablecoin. At that time, by the way, the Tron ecosystem accounted for more than 51% of the total number of USDT tokens in circulation. This indicates a high assessment of the blockchain's security by large cryptocurrency holders.

A smart contract is an agreement between the parties in a digital record. All the terms of the contract are entered into this agreement, starting with the identification of the parties and ending with signs of fulfillment of the terms of the contract for each party. Moreover, a program, not a person, acts as a “notary”. The program also checks the fulfillment of the terms of the contract, and only after it is “convinced” that these conditions are met, it exchanges assets. For example, a reward is due for certain services. This reward, expressed in currency, is blocked for the duration of the smart contract execution by the contractor. After the order is executed, the program checks the compliance of the stated conditions with the real ones. And only if the compliance is complete, the exchange of assets occurs. Otherwise, the reserved amount (or another asset for payment of services) is returned to the party, and the smart contract is canceled. This automatic mode of drawing up a smart contract and monitoring its implementation eliminates the need for an intermediary between the parties. Any asset can be the subject of a smart contract - finance, goods, creativity (any intellectual property), real estate, art and collectibles, etc.

But to carry out all these procedures, a number of transactions are required, which must be paid for by the native Tron cryptocurrency – TRX, regardless of what currency or other assets are involved in the exchange. Therefore, in the Tron network (and not only in it), all transactions are recalculated for the resources required to carry them out. In order not to burn the native currency, special resources are used – Bandwidth and Energy. As mentioned above, Bandwidth for several dozen transactions is “distributed” for free every day, but Energy is not. This resource can be obtained in several ways, below we tell you how to do this.

How to Get Energy in the Tron Ecosystem

The easiest and quickest way to think of is to buy with native crypto. But if you don't have much crypto, it's a shame to spend it on buying Energy, and you can quickly go broke paying for smart contracts with native currency. That's why users are given the opportunity to "freeze" crypto not only to receive TRX rewards when voting.

You can also block TRX to receive resources from the blockchain as a thank you for your cooperation. After all, the tokens you block can be used to provide various network operations during the blocking period. Tron pays for their “rent” with Bandwidth and Energy resources.

Depending on the choice of the staking method - active or passive - the reward will, of course, differ. But to receive Energy, it is not at all necessary to actively participate in the network, for example, in voting with the opportunity to receive TRX . Of course, in this case, passive staking will bring fewer resources, but it will also reduce the time costs, if this is important for the user. But for paying for a small number of smart contracts and transactions, this may be enough - everything depends on the content of the smart contracts.

DApps Developers and Users

There are probably few blockchain users today who do not interact with decentralized applications (DApps). Some of these people are developers, but most are those who use their developments. Sharing these applications is an important area of use for Energy. Since the main component of DApps is a smart contract.

From this it becomes clear that decentralized blockchain applications are launched in a peer-to-peer network, where there is no third party. At the same time, they are subject to the requirements of transparency, accessibility for all participants in the ecosystem, open source code and the presence of a cryptographic token, which in the Tron system is the TRX token of the native currency Tronix.

This means that in addition to saving transaction costs, all transactions between developers and users associated with these applications are ensured with the highest level of confidentiality.

How do you save money? All at the expense of the same resources, in particular – Energy, which is used to pay for the cost of restoring the energy spent on creating, concluding, checking the execution of a smart contract and conducting the final transaction. As we have already said, this can be an exchange of assets, or it can be a return of the agreed and reserved payment to the customer for failure to fulfill the contract.

It is possible to accumulate a sufficient amount of Energy in anticipation of concluding a complex smart contract by blocking the main cryptocurrency and ensure virtually free servicing of transactions related to this smart contract. You just need to know the staking conditions that are in effect at that time in the Tron network - although they rarely change.

And of course, we should not forget about another important reserve of the blockchain – Bandwidth, which provides the necessary throughput for operations related to the smart contract.

Don't Confuse Energy and Bandwidth

Both of these resources are involved in ensuring the security and efficiency of transactions. The difference in their functionality lies in their names. If Energy, as the name suggests, replenishes the energy spent on a smart contract or transaction, then Bandwidth provides the throughput capacity necessary for a transaction.

Bandwidth is a constantly renewable resource, which Tron takes care of by providing each account with a “portion” of it for free every day. All “portions” are equal in volume, which can change, but for now they are only growing. Today, it is 5,000 units.

Each unit of both types of resources has a cost expressed in native cryptocurrency of the Tron blockchain, and any network participant can replenish the supply of resources by paying for them with TRX. But not everyone wants to spend crypto, and it is expensive not only compared to the free "portion".

After all, both types of resources can be accumulated using passive staking. Blocking crypto for a certain period without the ability to spend it gives you the opportunity to accumulate both types of resources. That is, if desired, servicing both basic transactions and smart contracts can become absolutely free if you properly manage the accumulated TRX tokens, as well as the Energy and Bandwidth resources.