TON, or The Open Network, is a unique community-driven blockchain with a lot to offer. Founded by Telegram, TON was created to onboard billions of users and allow for quick, inexpensive and energy-efficient blockchain transactions. All of its features were developed with everyday users in mind.
In addition to offering ultra-fast transactions, tiny fees and easy-to-use apps, The Open Network is known for its flexible architecture and scalability. It is also environmentally friendly. Before you invest in Toncoin, the network’s native token, use this guide to learn more about the history of TON and its uses.
What Is Toncoin?
Toncoin (symbol: TON) is the token native to The Open Network (TON), a decentralized Layer 1 blockchain network. Previously known as Gram, Toncoin can be used to pay transaction fees, settle payments or validate transactions using TON blockchain’s proof of stake (PoS) consensus model.
What Is Telegram?
Telegram Open Network is an abandoned blockchain developed by Telegram, a cloud-based instant messaging service. After the project was abandoned, it was transferred to the community and renamed The Open Network.
History of Toncoin
In 2018, Telegram released both a “lite paper” and a white paper for the Telegram Open Network. Originally called Gram, the project was in active development until 2020. During its time in development, TON raised money through private sales of Gram tokens. In April 2018, Gram broke records for the second-largest token sale of all time, raising $1.7 billion. Additional large billion-dollar sales were made to companies around the world after the token gained more publicity.
Gram started getting a lot of attention, which began to create several challenges for the network. There were several scams on Twitter prior to the token’s initial coin offering (ICO). Telegram founder and CEO Pavel Durov quickly made an announcement that the company would create an official method of participating in the ICO.
Gram initially attempted to conduct public sales under U.S. jurisdiction, so Telegram had to follow all SEC (Securities and Exchange Commission) regulations. The initial purchase agreement was to provide investors with tokens upon TON’s launch. The goal was to prevent the SEC from viewing Gram tokens as securities. Unfortunately, the SEC saw the initial investors as underwriters, and Telegram’s offering of Gram in exchange was considered an unregistered distribution of securities.
While Telegram fought the SEC, it ultimately lost in court. In May 2020, founder Pavel Durov ended Telegram’s participation in the blockchain’s development and started issuing refunds to the initial investors.
At this point, TON had a dedicated following and the worldwide decentralized community of crypto enthusiasts and developers saw the potential of the blockchain. Because TON was developed as an open-source project and the code was easily accessible on GitHub, community developers could pick up where Telegram left off and build new TON functionality.
Toncoin was initially developed as a Gram alternative, ostensibly not an actual investment in Telegram itself (though, according to Forbes, this assertion was challenged by at least some Gram investors). Speed was a major problem for blockchain technology. Slow speeds and high transaction fees made it difficult for everyday users to effectively pay with cryptocurrency as they would with Visa or Mastercard. TON was developed with the end user in mind to support millions of transactions per second (TPS).
What Does Toncoin Aim to Achieve?
While Bitcoin and Ethereum have become household names, they aren’t without their problems. High transaction fees, slow transaction speeds and a considerable learning curve make it difficult for people to use cryptocurrency for everyday purchases. For example, gas fees to use the Ethereum blockchain fluctuate frequently, and gas fees of over $100 aren’t unheard of, depending on the size of the transaction.
The TON ecosystem was developed to handle the needs of millions of users making everyday transactions. Unlike Bitcoin and Ethereum, which are primarily used by investors, TON focuses on catering to the typical consumer. It’s designed to be integrated into an easy-to-use app, allowing users to quickly buy, send and store coins.
One of the biggest advantages of TON is its flexible architecture. The Open Network was designed to be incredibly efficient and scalable, and boasts ultra-fast transactions due to its cross-shard interactions. By supporting dynamic sharding and workchains, TON can successfully validate and process millions of transactions per second. In other words, TON’s flexible architecture lets it grow continuously without any loss of performance.
Blockchain technology has quickly evolved, making it easier to exchange sensitive information in a decentralized environment. TON strives for mainstream adaptation of Toncoin, made possible by its engaged Telegram user base, simple interfaces, incredibly fast speeds and overall scalability.
How Does Toncoin Work?
As the native token of its blockchain, Toncoin has a range of uses on theTON network, including as a form of payment in decentralized apps (DApps).
Unlike most other blockchain ecosystems, TON was designed to support billions of simultaneous users. It does this using blockchain sharding, which involves using multiple subnetworks, or shards, on the same blockchain to quickly accomplish tasks. Each shard has its own purpose and works to prevent large backlogs of unverified blocks.
TON is a proof of stake (PoS) network. Every transaction is validated using Toncoin, which is also used to reward validators. The network also allows nominators to lend their tokens to validators to earn rewards. To lend tokens, a nominator needs to join a pool and stake their assets. Both nominators and validators are managed using smart contracts, adding an additional layer of security.
Specific Use Cases for Toncoin on TON
Users can buy or send Toncoin using the @wallet bot on the Telegram app. After setting up their wallet and adding My Wallet to their attachments, users can quickly access their Toncoin in any chat window. Users can purchase Toncoin using the same bot, too. They don’t need to pay a transaction fee to send Toncoin using the Telegram app, allowing them to quickly and easily transfer decentralized funds to other users on their contact list.
While users intending to sell cryptocurrencies are subject to a 0.9% commission fee, buyers don’t need to pay any transaction fees. This makes the wallet practical for everyday use.
Several services and applications running on the TON blockchain also accept payment in Toncoin. The TON ecosystem supports the creation of new DApps, making it very adaptable.
Toncoin can also be used to influence how the network develops in the future. The Open Network is a decentralized autonomous organization (DAO), so users who hold the blockchain’s native token can cast votes on any proposed changes to the blockchain or ecosystem. This helps promote a sense of community and encourages consistent growth and innovation. TON’s current governance program utilizes a simple voting system that ensures every user has a chance to make their voice heard.
Features of Toncoin
Toncoin is known for its practicality and heavily focuses on efficiency. The goal is to make using the token as easy as possible for the end user. TON’s development community has also worked hard to add many of the advanced features that set the token apart from other cryptocurrencies.
Proof of Stake Consensus Mechanism
Proof of stake consensus mechanisms are common on blockchain networks that require validators to complete transactions. This energy-efficient mechanism allows validators to be rewarded based on how large of a stake they hold. Instead of receiving a new block on the blockchain, they’re granted part of the transaction fees.
It’s important to note that TON can no longer be mined using a proof of work (PoW) consensus algorithm. In June 2022, the last Toncoin was mined, and the total supply can only increase by a small percentage each year. TON’s PoS consensus algorithm keeps the blockchain moving efficiently.
TON Storage
Storing information on a blockchain isn’t a new concept, but TON Storage takes it a step further. It works a lot like Dropbox but offers the benefits of private encryption, using the owner’s wallet’s private key. This adds an extra layer of security to both online private and public storage.
TON Proxy
Privacy is always a priority for blockchain users. TON Proxy enables users to access the TON blockchain using decentralized VPNs and TOR-like networks. This allows users to avoid censorship and easily access DApps.
Smart Contracts
Like many other blockchain ecosystems, TON relies on smart contracts to process on-chain transactions quickly. All smart contracts on the blockchain are executed using their own TVM, or TON Virtual Machine. TVM allows for very complex smart contract deployments.
TON DNS
TON DNS, or TON domain name service, attempts to make cryptocurrency wallets, accounts, smart contracts and other features a little more user-friendly. TON DNS provides users with easy-to-remember names that aren’t just strings of numbers and letters.
TON DNS works a lot like a social media handle, and is incorporated into various domain names for easy access. Users can register their domain names and usernames on the blockchain. There are several easy-to-use apps that support TON DNS, including cryptocurrency wallets.
TON Apps & Services
The TON blockchain is home to several DApps and services that utilize smart contracts. TON Services enables developers to create new applications on the blockchain. Users can access these third-party apps with a user-friendly interface. TON also offers a searchable registry of all DApps and services located on the blockchain.
Among the most successful apps on TON is StickerFace, which allows you to create your own NFT avatar to use on the network. This avatar can be used in a wide range of games and apps on TON. In addition to adding a wide range of wearable accessories for your avatar, StickerFace has been working on adding animations and 3D effects.
StickerFace isn’t the only popular NFT project on TON. TON Diamonds is a decentralized marketplace on the blockchain that allows you to easily buy NFTs from digital artists. Other available NFT art projects offer simple concepts, such as TON CATS and TON Hamsters. A list of unique NFT projects can be found here.
TON Wallets
There are several ways to store Toncoin and other digital assets from the TON blockchain, with over 743,000 unique TON wallets currently completing thousands of transactions per day.
TON offers custodial wallet services, and works with several third-party noncustodial wallets. Custodial wallets are a good choice for users who want simple solutions. Noncustodial wallets are a good choice for users who want more control over their assets.
There are two different TON custodial wallets. If you want to complete transactions through Telegram, you need to use the @wallet. Telegram users can also use @cryptobot to easily store, transfer or exchange Toncoin.
Earning Passive Income With Toncoin
There are several ways to earn money using the TON blockchain. The simplest way to earn income on the TON network is to become a validator; however, this requires a large amount of Toncoin, a strong connection and advanced hardware. Most users who want to earn passive income using TON become nominators, lending their tokens to validators via a nominator pool.
TON Nominator Pools
Nominator pools allow individual users to come together and combine the assets they’re lending to a validator, enabling them to easily collect a reward. Once a reward is granted by the blockchain, it’s distributed evenly among the members of the pool.
TON uses an open-source decentralized staking pool system. Not only does this make cryptocurrency staking easier for the average user, but it also provides smart contract guarantees. The smart contracts ensure that any tokens borrowed by validators are used solely for validation and are accurately distributed.
There is currently over 23 million TON staked by nominators in pools. Finding a nominator pool is a simple process. To get started, visit TonValidators.org to see a list of current pools.
TON Validators
TON validators help to maintain the network by validating transactions. As they validate blocks, they receive Toncoin rewards using the blockchain’s PoS consensus algorithm.
In order to become a TON validator, you need to first obtain a large amount of Toncoin to stake, typically around 600,000 TON. In addition to this investment, you’ll also need a fast internet connection and a system that can easily run MyTonCtrl, the open-source tool used by validators. A detailed guide is available to help you learn more about the requirements, rewards and expectations of validators.
Toncoin Use Cases
The TON ecosystem is constantly expanding, making Toncoin more versatile. The most common use of the token is as a form of commission payment for processing transactions on the blockchain. Because of the TON network’s sharding feature, the token may also be used for cross-chain transaction fees or as payment for creating new work chains.
Some additional use cases include:
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Payment for decentralized data storage
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Payment for the use of TON Proxy
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Payment for TON DNS
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Payments within DApps on the blockchain
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Validator rewards for maintaining the blockchain
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Voting in TON’s on-chain governance program
Toncoin Road Map
Toncoin’s current road map details the projects TON developers are working on throughout 2022 and into 2023. In addition to creating a more flexible architecture, the road map focuses on introducing new features to make the blockchain more efficient, safe and versatile.
In 2022, the TON Developers Program was introduced. Several innovative features were added to the blockchain including TON DeFi, TON DNS, TON Payments, TON Proxy and TON Sites.
Only two items on the road map are still in development. In the fourth quarter of 2022, TON Storage should become available. In 2023, Bitcoin and EVM Workchains will be introduced to the network.
Because the network is open-source, the developer community can make constant advancements. Active developers can connect via the TON Dev Chat on Telegram, or learn about the team’s latest projects on GitHub.
TON Tokenomics
While TON no longer uses a PoW algorithm for mining, new tokens can still be created. The supply of tokens in October 2022 was 5,070,947,543. According to TON’s official website, there’s a 0.6% annual inflation rate.
The use of TON is growing as more accounts open on the network. As of October 2022, there are 1,354,250 accounts — and new users are joining the network every day. The official website states that this is a 321% increase in new accounts over the past six months.
In November 2021, there was a large spike in Toncoin’s price as it jumped from below $1 to an ATH of $5.84. Throughout 2021 and 2022, the token’s price fluctuated between $1 and $2. Its current price as of this writing (Oct. 17, 2022) is $1.25.
TON Price Prediction
Most TON price predictions tend to be fairly optimistic, expecting its price to grow over time as the network becomes more involved with NFTs and DApps. Coin Statistics has a conservative estimate, stating that some experts believe prices could reach $3.61 by 2030.
Other forecasts expect faster growth. Swap Space published a price prediction of $2.38 by the end of 2022, with the potential to reach $3.15 by the end of 2023. Meanwhile, WalletInvestor forecasts an opposite trend, suggesting the coin could fall to $0.371 by the end of 2023.
Is Toncoin Safe?
Because of the hiccups during Toncoin’s ICO, some investors may see the token as a slightly riskier investment. While all cryptocurrencies have some risks associated with them, TON had unique challenges it needed to overcome.
In terms of practicality, Toncoin serves its purpose and is still evolving. There are millions of users engaging with the coin on a daily basis, active developers working toward improving the blockchain, and dedicated validators and nominators keeping the PoS blockchain working.
It’s also important to note that TON values security. While TON offers several features to make the network and its features more accessible, such as TON DNS and TON Proxy, it actively works to promote the safety and integrity of each transaction. For example, TON offers a security bug bounty to anyone who finds vulnerabilities in the blockchain.
TON’s Future
TON has a lot of support from its community and should continue to grow over the next few years. While blockchain technology is constantly evolving, Toncoin could become a practical way for people everywhere to transfer funds to one another. Previously, there were only 200,000 active TON wallets in January 2022, and this number quickly grew to over 600,000 by May. Now, the number has hit 743,000, proving that more people are creating a wallet on the TON blockchain and that mass adoption of Toncoin could become a reality in the near future.
TON also continues to be ahead of other Layer 1 blockchains in terms of transaction speed and versatility. In addition to having a fast block validation time, the blockchain offers several advanced features that promote scalability, such as sharding support.
Of course, Toncoin hasn’t been in use as long as some of the other major Layer 1 blockchains. It’s still growing and evolving, and it will be exciting to see the innovations TON brings over the next few years.
The Bottom Line
Toncoin has several practical uses within the TON ecosystem, including as a form of decentralized payment. The token is easy to use, and the network boasts ultrafast transactions. As developers continue to expand features, the token will continue to become more useful and appealing to a mainstream audience.