5/11/20242 min read

Simply put, Livepeer enables the use of distributed computers to handle the transcoding of resource-intensive video streams, which are often costly.Livepeer aims to significantly reduce the cost of hosting streaming video in applications by distributing transcoding work across its network.

Livepeer is a decentralised service designed to minimise the infrastructure costs of streaming or on-demand video applications. It is not a consumer-facing video platform per se. It is not a decentralised alternative to Twitch or YouTube. Instead, it is a behind-the-scenes solution for application creators that distributes the task of transcoding video (or converting it from one format to another before playback) among participating computers on a network. It can reduce resource costs by up to 50 times compared to traditional centralised video transcoding methods.

How does Livepeer work?

Livepeer relies on its ‘coders’ or people who add computers to the network to handle transcoding requests from application developers on demand. These people exchange their computing resources (CPU and GPU power and bandwidth) in exchange for payment in cryptocurrency, and Livepeer also refers to these users as ‘video miners,’ which is consistent with the mining terminology used for block creation work on many other blockchain platforms, such as Bitcoin.

Developers who use Livepeer's network to fuel their video applications must pay LPTs for transcoding and distribution services, and LPT holders can sell their tokens to business coordinators in order to become principals, thereby earning a smaller share of the fees and rewards for their participation in the network without being directly involved in the transcoding process.

What's so special about Livepeer?

Video streaming is expensive for application developers. It's one of those hidden costs that consumers may not directly see or understand, but which can be passed on to them in the form of service fees, increased ad placements or the sale of their data.

By minimising the cost of distributed computing, Livepeer can enable new types of video-driven applications and business models. On the other hand, people can contribute their computing power and earn fees and rewards in the process.

What can be done with Livepeer?

Livepeer is not a consumer-facing service, so users who watch videos that have been transcoded on the Livepeer network may have no indication that the service is involved.

For application developers, Livepeer provides a potentially cheaper alternative to centralised services, thereby reducing the computational costs required to implement video functionality in their services. For network participants, there is an incentive to plug computers into the network and/or use LPT tokens to ensure mobility.

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