What Is Toncoin (TON)?

Toncoin (TON) is an open-source network that has received much attention and speculative investment over the past five years. Its innovative sharding system speeds the network up, with a transaction-per-second (TPS) rate much faster than Ethereum (ETH). While Toncoin is a big name in crypto today, its origins are surprising. The network operated under a different name for its first two years.

Overview of Toncoin (TON)

Toncoin (TON) is a Layer 1 blockchain developed in 2018 by developers at Telegram, the encrypted messaging company. The blockchain was initially called Gram and saw rapid growth in 2020. As more attention was brought to Gram, eventually, the U.S. Securities and Exchange Commission (SEC) caught wind of the network and ruled that Gram was a security. In response to this ruling, Telegram CEO Pavel Durov separated from the blockchain and handed it over to an independent group of crypto enthusiasts. The network’s name was changed to “The Open Network.” Today, TON is developed by the TON foundation, is a top 25 cryptocurrency by market capitalization and holds a number of different use cases.

Why Do People Use Toncoin (TON)?

The TON network has smart-contract capability, so the use cases are whatever developers can dream up. The network is open source, and the TON community is actively creating new use cases. Today the most common applications built on the TON network include:

• Non-custodial wallets: Tonkeeper
• Decentralized exchanges (DEXes) – STON.fi, Tonswap
• Explorers – Tonscan, TonAPI
• Non-fungible tokens (NFTs) – Getgems.io, TON Diamonds

Toncoin (TON) History

Toncoin (TON) was first founded as Gram by brothers Nikolai and Pavel Durov. The Telegram team was responsible for developing the Gram network up until 2020. The aim of Gram was to be a network where decentralized applications (dApps) could be created. Since its beginning, the project was open source. The Telegram team did much of the heavy lifting in creating the original product.

While Telegram may seem like an odd company to develop a blockchain and cryptocurrency, it actually makes a lot of sense. Telegram uses similar technologies as cryptocurrencies in securing its messaging application. Telegram uses end-to-end encryption to protect users from hackers and to give a higher level of privacy. Even governments are unable to read messages on Telegram. This ethos falls right in line with crypto. 

Where to Buy Toncoin (TON)

Purchasing Toncoin (TON) could be difficult for U.S. investors as it isn’t offered on any major U.S. exchanges. OKX and KuCoin offer TON, so you could create an account there, but neither exchange is available in the U.S. Another way to buy TON is by opening a non-custodial wallet like Tonkeeper, connecting to a decentralized exchange such as Tonswap and purchasing TON without any sort of intermediary. 

Both purchasing routes hold risks. Purchasing from a centralized exchange is not entirely safe. Failures happen, and users can lose their money when they trust someone else to protect it. The FTX collapse was a wake-up call for crypto users. 

You also face risks by holding your own crypto. With no intermediary, users have to be responsible for their own assets. You are more susceptible to scams, as well as responsible for your own passwords. If a decentralized wallet user loses a password or private key, that crypto is lost forever. Keep these trade-offs in mind you buy crypto.

Toncoin (TON) Blockchain vs. Other Blockchains

Toncoin’s main marketing spiel is that it is faster than most other blockchains. The benchmark for Layer 1 blockchains tends to be Ethereum (ETH). There typically needs to be some sort of advantage over Ethereum for a chance to stay relevant. TON has a block time of 5 seconds, while Ethereum has a block time of 12 seconds. When comparing blockchain speeds, Solana must be mentioned since it has a block time of just 1 second.

The other key statistic is transaction fees, where Toncoin excels. TON sellers are subject to a 0.9% fee, while buyers are subject to no fee. Lower fees offer a comparative advantage to Ethereum, where gas fees can get pricy when the network is crowded. However, Layer 2 solutions are coming to Ethereum for speed and fees, so these benefits may become less advantageous.

How to Store Toncoin (TON) Safely

If you choose to purchase Toncoin with a wallet, you’ll need to pair a software wallet with a hardware wallet. This extra security measure prevents your private keys from being in danger of phishing scams. The most popular hardware wallet is the Ledger Nano S (along with its updated version, the Nano S Plus). Ledger is also preparing to release a much more functional wallet with a full smartphone-sized color screen called the Ledger Stax. Preorders are already open on Ledger's website. All Ledger wallets support pretty much all of the top cryptos including Bitcoin, Ethereum, Dogecoin, Shiba Inu, all ERC-20 tokens and over 1,800 more.

Toncoin Will Need More Applications to Compete

For a blockchain to be successful, the project needs to demonstrate real value. Toncoin lacks high-quality applications at this time. While it may be able to survive on crypto speculation for a while, the network needs to attract developers to build out the network, which will attract more users and value. The most robust networks will attract the best developers. A richer environment of applications will attract wealthy users. Developers want to build products where there are users, and Toncoin needs more projects to make it competitive.