tl;dr Summary: Started in 2017, Livepeer is a live video streaming network protocol that is decentralized, scalable, and a cost-effective alternative to the current centralized cloud-based offerings by Amazon or Google.
Understanding Livepeer
At present, 82% of all internet bandwidth is used by video streaming. A lot of this content uses centralized media servers and is distributed using centralized Content Delivery Networks (CDNs).
A content delivery network is a network of media servers across the globe whose goal is to provide seamless and uninterrupted media content to users around the world. Some of the popular CDNs are Akamai, Microsoft Azure CDN, Cloudflare, Fastly, and CloudFront.
According to Livepeer, doing live video streaming or broadcasting for individuals or small groups in a P2P (peer-to-peer) fashion is expensive given the prohibitive computational and bandwidth requirements. Particularly for transcoding, which is required to create videos in different formats depending on the end-users device and bandwidth.
It can cost at least $4500 to purchase one professional media server license or $500/month to run a single cloud media server. For large broadcasts like a musical event, a publisher would have to buy a large amount of capacity on every CDN for just a few hours of the event.
Livepeer was conceptualized, and created to address these very issues. Using the power of blockchain, it has created a decentralized, P2P solution running on Ethereum, where nodes contribute their own hardware and bandwidth towards streaming live videos making it very scalable and thus effectively solving the problem of increased cost with the nodes getting incentivized in return.
The net effect is that Livepeer could reduce the cost of video streaming by 10x for its users.
Components on Livepeer
Livepeer provides the underlying infrastructure for dApps, service providers, and broadcasters to share videos or live streams with end-users.
There are four components to this infrastructure:
- The Livepeer Media Server
- The Livepeer Network
- The Livepeer Token
- The Livepeer Protocol
Livepeer Media Server:
The Livepeer Media Server is at the heart of the technology. It is an open-source server that takes in input video streams and converts them into different formats and bitrates depending on the end-users device and network bandwidth.
Being open-source is important since most media solutions in the market are proprietary, monopolized by a few companies, and expensive. Even the other open-source alternatives are either incomplete or lack support.
Developed with blockchain technology using tokenomics has allowed for the development of the media server to be completely self-financed by the protocol and in a community-centric environment.
Livepeer Network:
The nodes (like validators in PoS) that run the Livepeer Media Server communicate using the protocol form the Livepeer network. These nodes can be in one of four states at any given time: publishing, consuming, relaying, or inactive.
A publisher/broadcaster node publishes a stream to the network to be transcoded according to user requirements. A consuming node is where a stream is being consumed by an end user, whereas a relaying node participates in the distribution of live video and passing of protocol messages.
The protocol manages the routing procedure for requesting a stream and the transcoding and verification jobs to the proper nodes.
Livepeer Token:
Although the broadcasters pay to use the network in ETH, the native Livepeer token is used for staking by nodes. Like any other token in a PoS (Proof of Stake) type network, this token is also part of the reward and penalty mechanism within the protocol.
Livepeer Protocol:
The protocol specifies the various roles of the nodes, transaction types, the consensus mechanism and the token distribution mechanics. For details on the protocol, refer to the project overview document.
Current State of Livepeer
Since last year, Livepeer has shown a dramatic rise in its usage. The minutes of video transcoded by its protocol saw a record high in Q1 of 2022 and breached the 30 million mark.
The graph also shows a steady rate of increase in its adoption for transcoding services amongst applications and developers.
To maintain this healthy growth, Livepeer plans to add features like object recognition and scene classification capabilities into its repertoire. Besides this, they are also looking at other use-cases like video fingerprinting and song title recognition.
Rising Ethereum gas prices recently prompted Livepeer to migrate to Arbitrum allowing the community to interact with the protocol at significantly lower gas fees, increasing the profit margins and network participation amongst nodes.
Livepeer Inc. also raised a $20 million B-1 series in January 2022 that it intends to use to increase functionality and expand its community presence further. This year they have sponsored various hackathons like Web3Con, NFTHack, and ETHRio, with Q1 2022 seeing 72 projects funded by them.
