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Toncoin (TON), a cryptocurrency created by messaging app Telegram, entered the top 10 largest cryptocurrencies by market capitalization in September 2023.
Why is Toncoin crypto price rising? What is special about TON?
All answers and updates to the latest TON news can be found here.
TON climbs into the top 10 list of cryptocurrencies
We need historical context to understand why the TON price has skyrocketed recently.
Originally known as Telegram Open Network, Telegram’s blockchain project was developed in 2018. As the US Securities and Exchange Commission (SEC) Telegram sued in October 2019Telegram was forced to abandon its blockchain project.
The project has been renamed The Open Network (TON) and is currently operated as an open source project by its community.
On September 14, 2023, Pavel Durov, founder and CEO of Telegram, announced that the TON wallet integrated into the messaging app becomes.
Telegram users can now download the TON wallet on their app and store, buy, sell and trade cryptocurrencies directly on Telegram.
According to Durov, starting November 2023, the TON wallet will be included by default in Telegram’s settings and attachment menu for users outside the US and some other countries.
“TON Wallet, a third-party mini-app within Telegram, will bring a whole new dimension of Web 3.0 to hundreds of millions of Telegram users.”
The news caused Toncoin to surge over 40% within a week of Durov’s announcement. At the time of writing, Toncoin has gained 87% in the last 30 days and increased its market cap to over $8.5 billion, overtaking established blockchain networks such as Solana, Tron, Polygon and Litecoin.
What is TON?
TON is a decentralized and open internet platform with the following components: TON Blockchain, TON DNS, TON Storage and TON Sites.
The TON blockchain operates as a Layer-One (L1) blockchain and uses the Proof-of-Stake (PoS) consensus mechanism. Like most blockchain projects, the TON blockchain aims to become a fast, secure and scalable network that can process millions of transactions per second with minimal transaction costs.
How does TON plan to achieve scale? Dem Whitepaper According to the TON blockchain, it is designed as a collection of blockchains. The leading blockchain is called “Masterchain”. It contains general information about the group of validators and their stakes and provides security to the system.
Meanwhile, other blockchains, called “workchains,” perform value transfer and smart contract functions. Each workchain is further divided into numerous shard blockchains.
Toncoin is the native cryptocurrency of the TON blockchain. It is used to pay gas fees, validator staking, storage payments and payments for other TON services. Loud CoinMarketCap At the time of writing, Toncoin’s inventory was over 5 billion coins. The token has no hard cap and validators will continue to earn block rewards.
What is unique about TON?
TON’s rocky start due to the SEC’s lawsuit against Telegram inadvertently introduced a unique feature of the TON blockchain.
TON is the first blockchain to combine PoS and Proof-of-Work (PoW) algorithms. How could that happen?
When Telegram was sued by the SEC in 2019, the company was forced to abandon the project and return over $1.2 billion to investors who had purchased Toncoins (then known as “Gram”).
When Telegram left the project, the tokens were placed into special PoW donor smart contracts that allow anyone to mine the cryptocurrency. The PoW smart contracts presented miners with complex puzzles that required significant computing resources to solve. The difficulty level would be adjusted based on available computing power.
When TON mining began in July 2020, the first miners were able to mine TON using CPUs, but as more miners participated, CPU mining was replaced by GPU mining. As of 2023, you will no longer be able to mine TON in this way as all available Toncoins have already been mined.
The TON community points to this PoW-based distribution process as TON’s key differentiator compared to most other cryptocurrencies – including Ethereum (ETH) – that have conducted initial coin offerings.
It is important to note that TON’s PoW mining smart contracts were only used to distribute the original 5 billion tokens and have nothing to do with the PoS consensus.
TON uses a PoS consensus algorithm where validators stake cryptocurrencies for a chance to create new blocks and earn block rewards.
The future of TON
Telegram’s close collaboration with TON has generated enormous interest in the project and they are excited about the future.
Now that the TON wallet has been successfully implemented into the messaging app, we expect demand for Toncoin to increase as more users buy, trade and exchange cryptocurrencies directly on Telegram. Remember that Toncoin is the native token of the TON blockchain and users need Toncoins to pay gas fees.
In addition, a look at the… TON blockchain roadmap that developers are focusing on developing cross-chain bridges to Ethereum, BNB Chain and Bitcoin blockchain in the third quarter of 2023. The successful deployment of bridges to these established blockchains will bring more users and capital into the TON ecosystem.
According to DeFiLlama, Ethereum and BNB Chain contributed 62% or $24.4 billion of the $39.1 billion total value locked in decentralized finance (DeFi) applications.
Elsewhere, TON Proxy is working to enable users to operate .ton sites that are not dependent on a fixed IP, central domain and central certificate. Meanwhile, TON Payments is developing channels (similar to the Lightning Network) that will enable micro-payments between parties without fees.
The bottom line
The TON community has overcome all odds and made TON one of the most significant blockchain projects in the world. In hindsight, the SEC lawsuit against Telegram looks like a blessing as it forced the TON project to become open-source and decentralized.
Now that Telegram is openly supporting the project again, the TON blockchain can leverage Telegram’s wide audience to reach people who have never used blockchain and cryptocurrency technologies in their lives.