Pavel Durov’s promising startup, Telegram Open Network, faced bans from financial regulators and was closed. But the project team gave access to all developments to the TON Foundation community. The project regained popularity, albeit under a different name — The Open Network. In the future, a startup can realize its original goal: to revolutionize financial transfers and bypass the Ethereum and Bitcoin blockchains in scalability and speed.
What Is Toncoin?
Toncoin is a blockchain created by the followers of Pavel Durov, who published a white paper for the Telegram Open Network cryptocurrency. As a result, it was not possible to launch a cryptocurrency. The opposition from the US regulators prevented it. But even though the original project was closed, the activists did not give up. At the moment, the TON Foundation is engaged in the development. Anyone can join the developers and network participants. The open community brought the project to a product state and engaged in its improvement in real-time. The developers announced the TON network as an alternative to the Internet, often referring to the project as web 3.0. The main features of Toncoin are:
- transaction speed and scalability (sharding) — the network is capable of processing millions of transactions, and one transaction is performed in a few seconds;
- protection against intruders — the community can change information in an existing block, which allows you to cancel illegal transactions, and protection against a “51% attack” has been added;
- transactions outside the chain — such transfers are more vulnerable; however, they allow you to transfer coins instantly and completely free of charge;
- subsystems have been developed — Proxy, DNS, and anonymous browser;
- bridges have been developed between Ethereum and Binance Smart Chain, which allows you to convert TON into coins of these networks;
- smart contracts allow developers to launch their own projects in the TON ecosystem.
The developers of the TON network cooperate with the Telegram team. Initially, it was assumed that valuable functions would be built into Telegram, increasing the messenger's functionality and attracting new users. For example, the owner of the messenger account would be able to store files, use an anonymous browser, or transfer coins directly through Telegram.
Dozens of decentralized (dApps) and conventional centralized applications have already been created based on the network, for example, CryptoBot, Bridge TON-ETH, Bridge TON-BSC, Mining Bot, and others.
How Does Toncoin Work?
- Endless sharding. The term refers to the division of the blockchain into separately managed segments. Each of them is assigned its own node. That is, one node does not have to be responsible for verifying all transactions in the network but only for a certain unique set. As a result, the speed of block creation does not depend on the volume, a queue is not formed, and fees are not increased.
- Instant routing. Special mechanisms guarantee instant data exchange between 2 networks. TON can scale up to 1+ million chains without reducing the information processing speed.
- 2D distributed registries. New blocks can be created over invalid ones to avoid unnecessary forks. Such a mechanism leads to resource savings and reduces the risk of errors.
The general principle of the network:
The project team adopted the ambitious ideas of the Telegram Open Network. Their goal is for the blockchain to provide speeds of up to a million transactions per second, if necessary. This is even higher than the stated figures for Mastercard and Visa centralized payment systems. The speed will be achieved due to the unique architecture, which includes not just one chain, but masterchains, workchains, shardchains, and hundreds of shards. Telegram developers called this an approach not previously implemented in blockchains.
- The hashes of work and shard chains are stored in the masterchain. It sets the basic characteristics that must be met in all segments and is also responsible for finalizing all calculations and monitoring the activity of validators.
- Workchains are virtual blockchains that consist of shardchains. They can have rules, transaction formats, and virtual machines for running smart contracts. That is, they are different.
- Shardchains are smaller segments. They are equal and easily interact, ensuring the dynamic functioning of the network.
TON Blockchain. Flexible, scalable platform with integrated smart contracts, micropayments, and other functions.
TON Services. It represents a universal platform for third-party services, supports the option of decentralized web surfing, and offers user-friendly interfaces. That is, independent developers can release applications based on the network.
TON Payments. A platform for making micropayments. It can be used by bots, individuals, and services for lightning-fast off-chain transactions. Thanks to the protection mechanisms, the same level of security are provided during operations inside the chain.
TON Proxy. This is an anonymizer for TON nodes — an analog of the anonymous I2P network. Proxy allows you to create decentralized VPNs and alternatives to the TOR browser based on blockchain. Provides dApps with immunity to censorship.
TON DNS. The “Domain Name System” makes the blockchain more understandable, assigning readable names to accounts, services, nodes, and smart contracts. Thanks to DNS, the study of network components and services becomes comparable to surfing the Internet.
TON Storage. It is a decentralized analog of file hosting for distributed data storage. It is based on the technology of smart contracts. The storage is suitable for working with large amounts of information.
TON Workchains. One of the problems preventing the creation of Web 3.0 is the poor interaction between different blockchains. Bridges are not an ideal solution, as losses are incurred in decentralization and productivity. The TON design includes the main network and can support up to 232 workchains. Each has different rules and supported formats. The solution provides trouble-free interaction. In the future, this will create an ecosystem where all blockchains work together.
The native TON coin is a means of transferring transactions and paying transaction fees on the network. The coin is also needed to launch smart contracts. TON is used as a reward for network validators. In addition to the listed standard functions, the coin has the following use cases:
- The creation of third-party cryptocurrencies and workchains.
- Payment for services in the TON Services app.
- Payment for decentralized data storage by TON Storage.
- Payment for domain names within TON DNS and hosting sites on the network.
- Payment within TON Proxy.
- The TON coin is also used for decentralized government: holders can vote for the implementation of certain updates and changes in the protocol.
In addition to the version released on their own network, there are two more: Wrapped in Ethereum and Wrapped in Binance Smart Chain. They are trading 1 to 1 to the original version of the coin.
The project team has a global goal — the launch of Web 3.0, which can become an alternative to the Internet. To do this, in the second half of 2022, they launched the services listed above. Grandiose plans and well-known founders (people from Durov’s team) will allow the asset price to soar if all the goals are realized.