The ever-evolving realm of cryptocurrencies is a fascinating space where pioneering vision often blends with technological innovation, resulting in groundbreaking platforms that stand the test of time. As we dive deeper into this dynamic world, we will explore one such stalwart of the industry that, while not new, continues to remain relevant and impactful.
Throughout this guide, we will unlock various layers of information and intricate details, providing illuminating insights into a long-standing player in the cryptocurrency universe. Brace yourself as we embark on this enlightening journey, meticulously deciphering each aspect of a cryptocurrency platform that has persistently shaped the course of digital finance.
In the year 2018, Telegram unveiled a project known as Telegram Open Network (TON), introducing both a “lite paper” and a comprehensive white paper. Initially dubbed as Gram, this project was developed intensively up until 2020. During its development phase, TON managed to raise substantial funding via private Gram token sales. In fact, in April 2018, Gram set a milestone by being the second-largest token sale ever recorded, with funds amounting to $1.7 billion. Further significant billion-dollar sales followed as the token gained global exposure.
However, the burgeoning attention towards Gram began to spawn numerous obstacles for the network, including a series of scams on Twitter in the lead-up to its initial coin offering (ICO). In response, Telegram’s founder and CEO, Pavel Durov, promised to establish an official channel for participating in the ICO.
Gram initially sought to conduct public sales within the confines of U.S. jurisdiction, implying compliance with all regulations set by the Securities and Exchange Commission (SEC). The initial purchasing agreement was designed to furnish investors with tokens upon TON’s launch, as a preventive measure against the SEC deeming Gram tokens as securities. However, the SEC identified the initial investors as underwriters, consequently interpreting Telegram’s offer of Gram as an unlawful distribution of securities.
Despite Telegram’s efforts to challenge the SEC, the battle was lost in court. In May 2020, Durov terminated Telegram’s involvement in the blockchain project and started reimbursing the initial investors. Nonetheless, TON had cultivated a dedicated audience, and the global decentralized network of crypto enthusiasts and developers recognized the potential of the blockchain. Given that TON was an open-source project with readily available code on GitHub, it allowed community developers to carry forward the work initiated by Telegram and contribute to TON’s growth.
Toncoin emerged as an alternative to Gram, conceptualized not as an investment in Telegram, but as an independent entity. This perspective, however, faced some opposition from certain Gram investors, as reported by Forbes. One of the significant hindrances faced by blockchain technology was its slow speed, coupled with high transaction fees. These factors made it challenging for the average user to make regular payments with cryptocurrency in a manner similar to traditional systems like Visa or Mastercard. With this in mind, TON was designed to accommodate millions of transactions per second (TPS), thus prioritizing the needs of the end user.
What is The Open Network (TON)?
The Open Network, or TON, is a Layer-1 (L1) blockchain technology initially designed to simplify cryptocurrency payments through the widely-used Telegram platform. The term TON stands for “The Open Network,” with Toncoin being its native cryptocurrency.
TON is designed based on the Proof-of-Stake (PoS) model, which contributes to its scalability and robust security, making it a reliable network that can support billions of users worldwide. What sets TON apart is its Turing-complete and high-performance blockchain capabilities, which empower it to handle an extensive range of transaction complexities on both its primary blockchain and all associated “workchains”. In simpler terms, TON is not just a Proof-of-Stake (PoS) network; it is a highly flexible and adaptive platform that can manage a wide array of transactions.
However, the journey of TON wasn’t without its share of hurdles and obstacles, especially during the initial phase. The original vision for TON was to enable seamless cryptocurrency transactions via Telegram. But this vision was disrupted when the SEC stepped in due to Telegram’s failure to disclose the sale of its GRAM tokens, which amounted to $1.7 billion. This oversight led to a court case, which Telegram lost, resulting in the company’s decision to discontinue its association with TON. Despite these initial challenges, TON has continued to evolve and develop, with a steadfast commitment to its mission of streamlining crypto payments.
How Does TON Work?
TON stands tall as one of the most sophisticated blockchains available, capable of handling millions, potentially even tens of millions, of Turing-complete smart contract transactions every second. Its impressive scalability and transaction capacity are achieved through the implementation of a master chain alongside workchains, also known as shard chains.
The architecture of TON’s Layer-1 is configured to scale up to an impressive 2 to the power of 32 workchains. Each of these can be further divided into up to 2 to the power of 60 shard chains. Such a setup enables TON to support millions of near-instant transactions per second. The master chain, akin to Ethereum’s beacon chain, serves as an immutable ledger, providing a reference point for the workchains and their respective “shards”.
Every workchain can be perceived as an independent blockchain with its unique rule set, catering to specific applications. These workchains are subdivided into shards, each housing the activity and transaction logs of a particular set of accounts. Despite the differences in rule sets and variations among workchains tailored for individual use cases, they all adhere to a standard consensus ruleset to maintain synchronization with the master chain.
By dispersively allocating on-chain user activities across workchains and shard chains, TON possesses the ability to scale and ensure a high degree of transaction throughput. This makes it ideal for meeting the demands of Web3, Decentralized Finance (DeFi), smart contracts, and more even when millions of people are using the network. Thus, despite extensive use, TON’s performance does not falter, making it a highly efficient platform for a variety of blockchain applications.
Toncoin ($TON) can be purchased or transferred conveniently using the @wallet bot on the Telegram application. After a simple wallet setup process and adding ‘My Wallet’ to their attachments, users can quickly access their Toncoin through any chat window. The @wallet bot is also instrumental in purchasing Toncoin, facilitating a smooth transaction process. Remarkably, no transaction fee is required when sending Toncoin using the Telegram app, allowing for swift and hassle-free transfer of decentralized funds to others on a user’s contact list.
While a nominal commission fee of 0.9% applies to users intending to sell cryptocurrencies, buyers enjoy the privilege of no transaction fees, making the wallet user-friendly for everyday transactions.
Toncoin’s utility extends beyond the Telegram application; several services and applications operating on the TON blockchain also accept payments in Toncoin. The TON ecosystem encourages the development of new Decentralized Apps (DApps), attesting to its adaptability.
The continuous expansion of the TON ecosystem enhances Toncoin’s versatility. One of the primary uses of the token is as commission payment for processing transactions on the blockchain. Due to the network’s sharding feature, Toncoin can also be utilized for cross-chain transaction fees or for the creation of new work chains.
The scope of Toncoin extends to various other use cases, including:
- Facilitating payments for decentralized data storage
- Serving as payment for the use of TON Proxy
- Functioning as payment for TON DNS
- Enabling payments within DApps on the blockchain
- Offering validator rewards for maintaining the blockchain
- Playing a vital role in voting within TON’s on-chain governance program
As we journeyed through the dynamic landscape of The Open Network (TON) and its native cryptocurrency Toncoin, we explored the intricate workings of an enduring player in the cryptocurrency sphere. We have delved into its origins, its unique technology, operational mechanism, and broad utility. This exploration reveals that TON and Toncoin, despite initial obstacles and complex challenges, continue to provide an adaptable, scalable, and innovative platform in the decentralized digital finance space.
As we look towards the future, it’s clear that this robust system, with its resilience and forward-thinking design, will undoubtedly continue to leave its indelible mark on the world of cryptocurrencies. With a solid foundation and an open sky of possibilities, TON and Toncoin embody the spirit of technological innovation, keeping pace with the evolving world while shaping the future of digital transactions.