BitTorrent (BTT-USD) might seem like a relic from a past era. But that’s not the case. While BitTorrent is the name of the well-known file-sharing protocol, it’s also an operating company. That operating company pivoted to crypto, and launched a token, the BitTorrent or BTT for short.
BitTorrent is not a new token. In fact, it’s been trading for three years now. Back in 2019, it initially started trading around $0.001 per token. It would spend the next two years trading around a tenth or a twentieth of a cent, with not much going on.
Between February and April of this year, however, the price of BTT suddenly launched 10x. It went from a tenth of a cent to a full cent ($0.01) in the space of six weeks. As of this writing, BTT has given back much of its gains and fallen back to around $0.00425. Still, that’s good for a fully diluted market capitalization of around $4.2 billion, and the #42 rank for most valuable cryptocurrencies. That’s not bad at all for the token of a website that reached its commercial peak more than a decade ago.
BitTorrent: A Legacy Internet Brand
If you were a teenager in the early 2000s, BitTorrent was a huge name. Up until 1999, when you wanted to listen to a specific song, you’d have to drive to a store and buy a copy of a physical CD. That was expensive and a hassle. Who wanted to pay $15 for one good song and a bunch of filler anyway? Everything changed in 1999 with Napster, which allowed folks to directly download songs from other users for free.
Napster would go on to implode in a sea of lawsuits and questionable manageable decisions. However, it planted the seed for peer-to-peer file sharing services. While the copyright lawyers got Napster taken care of, a host of similar services rushed to fill the void, such as BitTorrent.
BitTorrent soon became the leading file-sharing service. As internet speeds improved, people started trading video games and full-length movies with each other in addition to music. At one point, BitTorrent reached 170 million active monthly users. And peer-to-peer networks were estimated to use as much as half of all internet bandwidth in the late 2000s.
BitTorrent: Evolving Into Crypto
BitTorrent’s usage and commercial visibility would soon dim, however. That’s because legal services would steal much of the thunder from peer-to-peer networks. Spotify (NYSE:SPOT) provided all the music users could ever want, on demand, either for a low monthly fee or for free with ads. It was a better user experience than having to find downloads for each album on BitTorrent and risking the legal liabilities and potential viruses that came from obtaining files that way. On-demand video streaming has boomed as well. Peer-to-peer still exists, but it’s no longer the top dog in the media space.
So what was BitTorrent to do? BitTorrent, the file-sharing protocol, can keep doing its thing. However BitTorrent, the private company that oversaw development of said protocol, needed to go in a new direction. Thus, cryptocurrency outfit Tron acquired BitTorrent, Inc. in 2018.
This set the stage for BitTorrent to pivot into cryptocurrencies. The strong base in peer-to-peer technology naturally fits with cryptocurrency. You see that in some of BitTorrent’s new efforts, such as its DLive video streaming platform. DLive is a Twitch rival where streamers can play video games, talk about politics or entertain viewers on camera and receive monetary donations from users. DLive, in turn, takes a cut of the donations.
The decentralized nature of peer-to-peer and cryptocurrency seemed to make this a perfect match. DLive was particularly exciting for BTT owners. That’s because BTT has a claim on everything on DLive; 5% of all DLive donations are passed on to BTT stakeholders.
DLive Runs Into Trouble
Unfortunately for BTT owners, DLive’s rise came to an abrupt halt this year. For awhile, DLive’s fastest-growing content category was in political video streaming. Previously, YouTube, Twitch and other mainstream platforms banned various political commentators for violating their terms of service around hate speech. These personalities instead started streaming on DLive and generated huge viewership. One prominent streamer by himself was reportedly earning six-figures annually from DLive donations.
After the events of January 6, however, DLive banned most of the more controversial right-wing political commentators. While this went against crypto’s live and let live attitude, the company came under intense political pressure. Indeed, Congress started investigating DLive for the role extremist videos it hosted may have played in the unrest in Washington. In any case, this stunted DLive’s growth. If you look around the website now, most of the live streams — even the featured ones — have rather low viewership numbers, generally well below 1,000 concurrent users.
BitTorrent Verdict
As far as the price of BTT goes on a day-to-day basis, that will likely be based on how bigger cryptocurrencies fare. At #42 in the crypto market cap ranking, BitTorrent simply isn’t large enough to chart its own course, at least not yet.
That said, if BitTorrent is going to succeed, it needs to find some use for the token that takes off. DLive’s rise and then abrupt loss of momentum is an interesting example of the difficulty in creating new businesses on the blockchain. While there is less regulation than elsewhere in the tech universe, cryptocurrency companies still run into novel legal and societal problems as they expand their businesses.
BitTorrent gets credit for innovation and trying to bring real functionality to the crypto universe. However, it’s too early to tell if the former piracy king will be able to find profitable ventures that don’t push the envelope too far.
On the date of publication, Ian Bezek held a long position in SPOT stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.
