What Is Toncoin (TON)?

Update 1 Dec 2023 • Reading Time 7 Minute

Reading Time: 7 minutes

Telegram, a cloud-based free instant messaging service, has initiated the Toncoin (TON) project. With its active user base of around 700 million, Toncoin holds the potential to transform Telegram into a super-app, offering a variety of functionalities powered by TON. This article delves into TON, exploring its workings, applications, and future prospects as a cryptocurrency.

Articles Summary

1️⃣ Toncoin (TON) is a decentralized layer 1 crypto asset used in decentralized applications (DApps) for payments, transaction fees, and stakes to secure the blockchain and its services.
🔄 TON operates through a combination of unique architectural elements and consensus mechanisms to provide fast, scalable and secure transaction processing, such as a Proof-of-Stake (PoS) blockchain and blockchain sharding.
🚀 TON has a maximum supply of approximately 5 billion tokens, which will gradually increase as rewards accumulate for validators mining new masterchain and shardchain blocks.
🆕 In Q4 2023, TON will undergo several upgrades, including the introduction of the Jetton Bridge, which will enable cross-chain token transfers from the TON blockchain to Ethereum or the BNB Smart Chain, and a Polygon Toncoin Bridge, which will enable cross-chain toncoin transfers between the TON blockchain and Polygon.

What Is Toncoin?

Toncoin (TON), short for The Open Network, is a decentralized layer 1 crypto asset initiated by Telegram in 2018. Formerly known as Gram, it is used to pay transaction fees, complete payments, or validate transactions using TON’s Proof-of-Stake (PoS) blockchain.

TON has a flexible architecture because of its transaction speed. Transactions per second (TPS) has been one of TON’s key differentiators over the years.

The table below shows a comparison of TON, Ethereum and Solana, as taken from the official TON website.

For example, in September 2021, TON set a then-world record by reaching 55,000 TPS during a competition. It is estimated that the network can currently handle hundreds of thousands of TPS, making it one of the fastest blockchains.

This speed is achieved thanks to the scalability solutions implemented by Toncoin. These solutions include a “multi-blockchain” architecture and sharding, which divides the entire Toncoin blockchain into smaller, independently processable fragments.

How Does Toncoin Work?

TON works through a combination of unique architectural elements and consensus mechanisms to provide fast, scalable and secure transaction processing. Here are some of the key components that work in Toncoin:

1. Toncoin: The Fuel of TON

Toncoin is the native cryptocurrency for the TON network and serves multiple purposes. It is used in decentralized applications (DApps) for payments, transaction fees, and stakes to secure the blockchain and its services.

2. Blockchain Sharding

Designed to scale to billions of users, TON uses a technique called “sharding,” which divides the network into smaller segments called shards. Each shard performs different tasks, such as speeding up processing times and preventing backlogs.

3. Secure Transactions with PoS

The TON network validates every transaction using Toncoin through an energy-efficient PoS mechanism and rewards validators based on the number of coins they hold. Anyone can join and deposit Toncoin to earn rewards. TON also allows nominators to lend their tokens to validators to earn rewards. Lending tokens require nominators to join a group and stake their assets. Nominators and validators are managed using smart contracts, adding an extra layer of security.

4. Smart Contracts and TON Virtual Machine (TVM)

Smart contracts in TON run on a special platform called the TON Virtual Machine. Designed for efficiency and easy implementation, TVM provides a secure and isolated environment for executing smart contracts within the network. It ensures that contracts run consistently across all nodes and provides the computing resources necessary for complex operations. TVM plays a crucial role in enforcing predefined rules embedded in smart contracts.

Use Cases of Toncoin

Toncoin is known for its practicality and focus on efficiency. It simplifies the use of tokens and has advanced features that set it apart from other cryptocurrencies.

1. TON Storage

TON Storage works similarly to platforms like Dropbox, but with the difference that it uses private encryption or the private key of the owner’s wallet. This adds an extra layer of security to both private and public online storage.

2. TON Proxy

TON Proxy allows users to access the TON blockchain through a decentralized VPN and TOR-like network. This allows users to bypass censorship and easily access DApps.

3. TON DNS

TON DNS, or TON’s Domain Name Service, makes crypto wallets, accounts, smart contracts, and other features more user-friendly. It provides users with easy-to-remember names instead of just a string of numbers and letters.

TON DNS functions 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. Several user-friendly applications support TON DNS, including cryptocurrency wallets.

TON Apps & Services

TON’s services enable developers to create new applications. Users can access these third-party applications through an easy-to-use interface.

The most successful application on TON is StickerFace, which allows you to create your own NFT avatars for use on the network. These avatars can be used in various games and applications on TON. In addition to adding a variety of wearable accessories to the avatars, StickerFace also includes animations and 3D effects.

TON Wallet

TON offers custodial wallet services that work with multiple wallets without third-party intervention. Custodial wallets are a good option for users who want a simple solution and more control over their assets.

There are two types of TON custodial wallets. If you are doing transactions through Telegram, you need to use @wallet. Telegram users can also use @cryptobot to store, transfer, or exchange Toncoin easily.

Toncoin Tokenomics

According to the released white paper, TON has a maximum supply of approximately 5 billion tokens. This supply will gradually increase as rewards accumulate for validators mining new master chain and shard chain blocks. The TON Foundation states that this annual inflation rate may increase to 2% in the future when 10% of TON’s maximum supply is staked by validators. This is something to consider if you intend to trade TON for the long term.

In November 2021, there was a significant increase in the price of Toncoin, rising from under $1 to an all-time high (ATH) of $5.84. Throughout 2021 and 2022, the price of the token fluctuated between $1 and $2.

Toncoin Roadmap

Toncoin released its 2023 roadmap starting in the first quarter, which includes developments such as the Token Bridge for cross-chain transfers between Ethereum or BNB Smart Chain and the TON blockchain, locking and vesting tools for smart contracts, and voting for tokenomics optimization. In Q2, TON updated its Elector and Configuration to simplify the creation of staking smart contracts and enable participation in on-chain voting. In addition, TON implemented a deflation mechanism in its tokenomics, decentralized encrypted messaging, reforms to the TON wallet address for a better user experience, and updates to the TVM including support for EVM signature verification and other new TVM features.

In the third and fourth quarters, the Toncoin roadmap introduces a number of new programs, such as:

Introduction of Jetton Bridge to enable cross-chain token transfers from the TON Blockchain to Ethereum or BNB Smart Chain.
Polygon Toncoin Bridge to enable cross-chain transfers of Toncoin between the TON blockchain and Polygon.
Extra Currency Technology, providing built-in extra currency technology for the most popular cryptocurrencies.
ETH, BNB, and BTC bridges to enable cross-chain transfers of Bitcoin, ETH, and BNB to the TON blockchain.
Scalability and speed are to be demonstrated on the test network, showing how TON can handle large numbers of transactions and still scale under load.

In the last quarter of 2023, the team plans to launch the separation of collectors and validators into two separate entities: collators (actors that form new blocks) and validators, allowing the TON blockchain to handle very large loads.

Conclusion

Toncoin (TON), formerly known as Gram, is a decentralized layer 1 cryptocurrency initiated by Telegram in 2018. It serves as the native cryptocurrency of the TON network and plays various roles, including transaction payments, staking, and transaction validation through Proof-of-Stake (PoS). TON offers unique features such as sharding for large-scale operations, TVM for smart contracts, and a range of services including TON Storage, TON Proxy, and TON DNS. Popular applications such as StickerFace are also available on this platform.

TON employs a unique tokenomics system with a maximum supply of 5 billion tokens. It experienced significant price fluctuations in 2021 and 2022. The 2023 TON roadmap includes the development of a Token Bridge, deflation mechanisms, encrypted messaging, address reformation, TVM updates, and integration with other chains such as Ethereum and BNB Smart Chain. Toncoin provides a sophisticated and flexible blockchain infrastructure with a focus on scalability, security, and cross-chain integration. It offers opportunities for users and developers to participate in the evolving cryptocurrency ecosystem in a variety of ways, from staking to application development.

How to Buy TON in PINTU

You can start investing in TON by buying the TON token on the Pintu app. Here is how to buy TON on Pintu:

Create a Pintu account and follow the process of verifying your identity to start trading.
On the homepage, click the deposit button and top up the Pintu balance using your preferred payment method.
Go to the market page and look for TON.
Click buy and fill in the amount you want.
Now you are a TON investor!

Looking to invest in other crypto assets? No worries, you can safely and conveniently purchase a wide range of cryptocurrencies such as BTC, ETH, SOL, and others safely and easily on Pintu. Pintu diligently evaluates all its crypto assets, highlighting the significance of being cautious.

Pintu is also compatible with popular wallets such as Metamask to facilitate your transactions. Download Pintu app on Play Store and App Store! Your security is guaranteed because Pintu is regulated and supervised by Bappebti and Kominfo.

Aside from buying and trading crypto assets, you can expand your knowledge about cryptocurrencies through various Pintu Academy articles. Updated weekly, all Pintu Academy articles are made for knowledge and educational purposes, not as financial advice