Toncoin: What It Is and Its Relationship with Telegram

The Open Network (TON) is a blockchain platform that got its start thanks to the folks behind the popular messaging app Telegram, led by the Durov brothers. They created it to bring cryptocurrency and blockchain features right into the Telegram app.

When Telegram teamed up with the TON Foundation, there was a ton of excitement about the future of Web3 and making this new tech more mainstream. This hype was because TON and its cryptocurrency, Toncoin, were built right into Telegram, making the app a key player in the Web3 world.

Just a week after the big news, TON’s value shot up by 42%. Everyone started thinking TON might become the next big coin, sparking a frenzy.

If you’re just getting into crypto, you might be curious about Toncoin and how it’s been doing since it launched in 2020. Our article will break down everything you need to know about TON and how it works.

What Is Toncoin?

Toncoin is a Level 1 utility token that the TON Foundation launched on the TON blockchain. It was created to shake up how people think about and use digital assets.

The goal of Toncoin is to make cryptocurrency something everyone can own. Unlike other top-tier coins built on single blockchains, Toncoin is designed to tackle the issues of scalability and speed, which have been holding back the widespread adoption of cryptocurrencies.

How Toncoin is Linked to Telegram

A lot of people think Pavel Durov, the founder of Telegram, created Toncoin. That’s kind of true. The blockchain platform was originally called TON and was created by the Durov brothers, Nikolai and Pavel.

TON was meant to be a platform for decentralized apps, similar to Google Play and the App Store. The main cryptocurrency in this network was supposed to be Gram. You could have used it to pay for content, subscribe to services, support Telegram channel authors, and even buy real goods and services through bots.

But then the U.S. Securities and Exchange Commission (SEC) decided Gram tokens were securities, and a U.S. court eventually banned their issuance. In May 2020, Pavel Durov pulled out of the project, so Telegram never got its own blockchain platform, which could have solved the monetization issues for the messenger.

With the recent partnership announcement, Telegram is now one of Toncoin’s biggest supporters. The connection between them has been clear since the GRAM announcement back in 2017. According to Telegram’s chief investment officer, the company plans to keep using TON Space to boost the popularity of cryptocurrencies. Telegram is paving the way for more growth: TON projects and partners are getting priority on the global advertising platform, Telegram Ads, and users are slowly getting introduced to the TON ecosystem.

Integration of Toncoin in Telegram

Despite no longer officially being involved in TON’s development, Telegram Messenger has continued to support the platform. In September 2023, Telegram integrated the TON Space self-custodial wallet into its app, which had over 800 million monthly active users at the time.

Then, in March 2024, Telegram rolled out an ad revenue-sharing system for channel owners, paying out exclusively in Toncoin with a 50:50 revenue split between the platform and channel operators. This move has the community buzzing with excitement.

This update includes a rewards system for channel owners, making it easier for them to monetize their content. Now, you can buy ads with Toncoin, bringing digital currency into the advertising game in a new way.

Channel owners on Telegram can now earn 50% of the revenue from ads shown in their channels. This taps into Telegram’s massive user engagement, with channels racking up over a trillion views every month.

Using TON for ads is a big step forward. Telegram picked the TON blockchain because it’s efficient and fast, making the ad purchase process smooth.

This new feature not only simplifies advertising but also gives precise control over where ads are placed, making sure they’re relevant to the context.

How does TON Work

TON uses a Proof of Stake system with sharding tech, and the TON Virtual Machine (TVM) handles the network’s operations and changes.

Thanks to its structure, which includes a Master Chain, Work Chains, and separate Shard Chain, the TON blockchain can handle transactions simultaneously without hitting capacity limits. Unlike other top-tier blockchains that rely on a single architecture, TON is super efficient. This is because sharding allows shardchains to work independently, so not every transaction needs to go through all the network nodes.

Consensus Algorithm

TON originally used a Proof of Work system but had to switch to Proof of Stake (PoS) because of resource limitations. Now, it uses Block-Proof-of-Stake (BPoS), a PoS variant with Byzantine fault tolerance.

Basically, this means the system can still reach an agreement even when there are conflicts between network nodes. This is crucial for decentralized blockchains since they are targets for cyberattacks. According to TON Stat, the TON network has at least 300 validators across 25 countries. Even if a third of them can’t participate, the network will keep running smoothly, thanks to the BPoS algorithm.

TON Scalability

This efficient consensus system takes away the limits of the TON blockchain, letting the platform handle an unmatched number of transactions per second (TPS). To show off its top-notch performance, the TON Foundation stress-tested the system and hit a world record with 104,715 TPS. The CertiK auditor verified these test results. While that’s impressive on its own, the TON Foundation says this is just the start. They believe the TON blockchain can theoretically scale to way more than the record-breaking test results.

Toncoin Use Cases

The $TON token has several key roles on the Toncoin blockchain:

Paying for Transaction Fees

First off, $TON is the only token you can use to pay for most transactions on the Toncoin blockchain and across other blockchains. Just like on the Ethereum network, where you need $ETH for gas fees, anyone using the Toncoin network must use $TON to process transactions.

You also need $TON to pay for data storage on the Toncoin blockchain and for blockchain-based domain names. With Toncoin developing a proxy, it’s expected that $TON will also be used to pay for access to the proxy.

Toncoin Governance

$TON doubles as a governance token for the Toncoin blockchain. If you own $TON, you can vote on proposals about the network’s future.

The first vote happened in February 2023, where users decided to freeze $TON found in inactive mining wallets. As a result, nearly 20% of the Toncoin supply is locked for 4 years.

Staking

Toncoin investors can stake their $TON tokens to validate transactions on the network. This works similarly to Ethereum and other major networks that use proof-of-stake validation.

You can stake $TON directly on the network or through major crypto exchanges like Binance. Investors who stake $TON earn extra tokens as a reward.

TON Wallets

Toncoin also has its own TON Wallet, one of many wallet options available for TON. The TON Wallet lets users make fast and secure blockchain-based payments without needing intermediaries.

Why Is The Toncoin Price Rising?

Toncoin’s price has jumped nearly 80% in the past year and 30% just in the last week. The main reason? Telegram, which originally created Toncoin, has integrated the Toncoin wallet into its super popular messaging app.

With over 700 million monthly active users, Telegram gives Toncoin a massive potential audience. Many investors believe this move will spark more interest in buying and using $TON, boosting demand and driving up the price.

On top of that, Toncoin has been picking up momentum as the blockchain hits new milestones. The project had its first successful vote in February 2023 and got $TON added to several major exchanges. According to Etherscan, more than 7,400 wallets now hold $TON.

TON Roadmap

Toncoin had a whirlwind 2023. They teamed up with MEXC Ventures and rolled out a Web3 wallet in Telegram. The TON Foundation has big plans to work with other major blockchains, aiming for interoperability and collaboration. This includes bringing other cryptocurrencies into the TON ecosystem and building bridges with Ethereum and BNB Smart Chain for cross-chain transfers.

They’re also planning some infrastructure changes by splitting validators into two separate nodes: collators and validators. This will help manage transaction loads and boost scalability.

With these impressive scalability features and multiple partnerships, the future looks bright for the TON Foundation and Toncoin. Integrating Toncoin with Telegram is a strong move to position TON as a top-tier blockchain for transitioning Web2 platforms into the Web3 world.

As TON gains popularity among Telegram users, we’re likely to see new use cases and interactions within the TON ecosystem. However, crypto traders interested in TON should be mindful of the risks and challenges associated with the project.