What is Threshold Network (T)? How Does it Work?
In the digital world, users have to sacrifice their private data to access different services. Most websites ask users to provide their social security numbers, real-time location data, spending information, and other pieces of information to access different services.
Most internet users have now realized the consequences of providing their private data but they don’t have a reliable alternative. It has now become evident that the algorithms understand human behaviors more than the humans know themselves.
Therefore, different centralized authorities have managed to change the users’ thoughts about different aspects of life through their algorithms. Similarly, some users had to face trouble when their phone numbers, bank accounts, and other information were leaked by hackers.
It clearly shows that internet users are in a dire need of a solution that can prevent these problems. Fortunately, Threshold is one of the leading blockchain networks designed to protect users’ privacy through cryptography.
What is Threshold Network (T)?
Threshold is the first on-chain merger of two existing blockchain networks, Keep Network (KEEP) and NuCypher (NU). Both networks joined hands to introduce an innovative blockchain solution that can truly ensure the user’s privacy. Both networks combined their privacy and structural elements to provide an efficient and more secure platform to the users.
The Threshold network is dedicated to ensuring users’ sovereignty over their digital assets. The platform was primarily launched to tackle the taxation being imposed by countries like India and Russia on digital assets. Threshold Network has also introduced a decentralized autonomous organization (DAO) to maintain decentralized decision-making.
From Keep Network
The Threshold network’s structural elements are taken from Keep Network. The network consists of “Keeps”, the off-chain containers, that encrypt and transmit private data. This technology was previously used for tBTC (one of the most reliable Bitcoin bridges that connect Bitcoin to Ethereum).
From the NuCypher
The network uses NuCypher’s privacy tools to encrypt data without ever disclosing it. In case of unusual activity, the platform can automatically prevent access to sensitive information. Moreover, NuCypher’s Proxy re-encryption tools are also used to transfer decryption rights securely.
Understanding the Features of Threshold Network
tBTC Bridge Protocol
tBTC Bridge is a renowned protocol that connects Bitcoin to Ethereum. tBTC is an ERC-20 token that can be used to buy products and services on Ethereum. The users can easily convert their BTC tokens to tBTC without having to deal with a centralized authority.
This protocol consists of multiple nodes that act as independent entities. Thus, a single user can’t manipulate the system because the network distributes sensitive information across these nodes. Even if a group of node operators tries to access the information, the platform’s cryptography primitive will protect the sensitive data.
Proxy Re-encryption Service
Although there are several web3 platforms working in the blockchain space, they still possess a risk to user privacy. Threshold network is trying to address these concerns with the help of a proxy re-encryption service. The users can easily access their private data without worrying about an external entity getting control of their data.
This technology can be used to provide users with access to the encrypted data without revealing the plaintext to the node operators. For example, users can transfer the ownership of encrypted NFTs through this technology. Similarly, enterprises can use it to share encrypted content with their paid subscribers.
How Does Threshold Network Work?
Threshold Network is designed to protect against single-point failure. It means a single entity can’t manipulate the users’ funds or sensitive data because the network relies on multiple independent entities to distribute the information. The best part is that the network processes the data even if a minimum number of node operators cooperate with each other.
The platform doesn’t disclose the plaintext to the node operators due to which they can’t corrupt the system even if they want to. The network is designed to operate safely and accurately even if there are a few bad actors trying to take control of the users’ data.
Understanding Threshold DAO
Threshold community members have the complete right to determine the network’s future. Threshold DAO introduces a three-pronged governance system to transfer governance rights to the users. This system maintains a proper check and balance system within the Threshold ecosystem as it empowers each user to keep the other two users accountable.
- StakerDAO – The node operators are required to stake their T tokens to validate the transactions. The platform allocates voting power to the node operators based on their size of the stake.
- TokeHolderDao – This DAO consists of community members who hold a specific amount of T tokens. These users have the authority to veto the proposals from StakerDAO. However, their main responsibility is to handle token issuance and other governance aspects within the Threshold ecosystem.
- Elected Council of Keep and NuCypher Representatives – T token holders elect the members of this council. This council mutually decides the staking rewards to encourage more users to stake their T tokens. Furthermore, these members can also Veto the proposals of StakerDao.
T is the native token of the Threshold network that is used to pay transaction fees. Moreover, the token holders can stake their T tokens to become node operators. The node operators receive T tokens as a reward for their contribution. Moreover, the T token holders also get voting rights within the Threshold ecosystem.
With a circulating supply of 8.5 billion tokens, T has a market cap of $409 million. It has a total supply of 10 billion tokens that will be released through rewards. T token ranks among the 100 best cryptocurrencies in terms of market cap.
Threshold Network is a decentralized protocol designed to address the privacy concerns of internet users. It’s a combination of NuCypher and Keep Network designed to protect the digital assets and private data of the users. The best part is that the community members have the right to determine the platform’s future.
If you need more information about Threshold Network, feel free to get in touch with us.