What Is Toncoin (TON) Cryptocurrency? The Complete Guide (2024)

TON stands for The Open Network, a decentralised, open-source blockchain that aims to provide a fast, secure, and scalable platform for various applications, including decentralised finance (DeFi), non-fungible tokens (NFTs), and other blockchain-based services.

Toncoin is the native cryptocurrency of The Open Network (TON). In the same way that Ether (ETH) powers the Ethereum blockchain, Toncoin is the token that powers the TON blockchain.

TON is used to pay for transaction fees, data storage, and other services on the network. Like other proof-of-stake (PoS) networks, TON can be staked, enabling investors to earn passive income on their investment. This mechanism also secures the blockchain, helping to make it more robust and reducing its energy consumption compared to other blockchains like Bitcoin, which uses proof-of-work (PoW) to secure the network.

The TON blockchain was originally created in 2018 by Telegram, which raised $US1.7 billion in private funding to build the project (initially called the Telegram Open Network). However, in 2020, Telegram faced regulatory issues with the US Securities and Exchange Commission (SEC) and was forced to return the funds to investors.

As the project had already been worked on for several years, Telegram decided to open-source the technology rather than abandoning it entirely, enabling a group of independent developers to take it over. The blockchain was renamed The Open Network, and the token was renamed from GRAM to TON. The project was then launched in 2021.

Toncoin’s price history began with an initial distribution of tokens through an open mining process that started in June 2020 and ran until June 2022. Many developers, investors and early adopters mined Toncoin tokens using computer hardware during this time.

The blockchain initially started out using the energy-intensive PoW consensus process to kickstart the adoption of the network but has since transitioned to the energy-efficient PoS system. This enables investors to stake their tokens to earn passive income and secure the network.

Like most other cryptocurrencies, trading for Toncoin began before all of the available tokens were mined. According to CoinMarketCap data, Toncoin traded at around $0.50 in August 2021. However, the token’s price quickly gained momentum, jumping to as high as $4.50 by November 2021—an 800% gain in just a few months.

Like many other cryptocurrencies, Toncoin’s price suffered during the crypto market downturn of 2022. The collapse of FTX and Terra Luna were two catastrophes that the industry endured within a period of just six months, dramatically impacting the prices of digital assets. Toncoin’s price tumbled as low as $0.82 by July 2022.

However, Toncoin’s price began to recover in the latter half of 2022 and into 2023 as the project gained more users and built its network infrastructure. During 2023, the coin saw steady growth before exploding to new all-time highs in early 2024.

As of November 14th, 2024, Toncoin was trading around $5.54 with a total market capitalisation of $US27.7 billion.

When analysing the relationship between The Open Network and its native cryptocurrency Toncoin (TON), it’s essential to grasp the basics of blockchain technology.

A blockchain is a decentralised digital ledger that records transactions across a network of computers worldwide. These transaction records are chain together in “blocks” and cannot be tampered with once they are confirmed and added to the chain. This technology underpins cryptocurrencies and enables secure, transparent and tamper-proof peer-to-peer transactions.

TON’s blockchain is built on this foundational technology, but it’s also introducing several innovative features to improve scalability, speed, and security. Here are some key features of TON:

• Proof-of-stake: TON’s consensus algorithm is designed to be more energy-efficient and faster than traditional proof-of-work algorithms used in other blockchains.
• Sharding: TON’s blockchain is divided into smaller, independent pieces called shards, allowing faster transaction processing.
• Optimised for speed: TON’s network is optimised for fast and reliable data transfer, which enables faster transaction processing and lower fees.

By building on the foundation of blockchain technology and adopting specific innovations made by other blockchains, TON has successfully built a highly scalable blockchain suitable for various applications.

Like any blockchain, the TON blockchain has its advantages and disadvantages. Here are some of the key benefits and drawbacks of the TON blockchain:

Advantages:

• Scalability: TON’s blockchain is designed to be highly scalable, with the ability to process thousands of transactions per second, potentially scaling to millions if enough validators join the system.
• Speed: TON’s blockchain is optimised for fast transaction processing, with block times of around 5 seconds. This is helpful for applications that require quick responses, such as games.
• Low fees: TON’s blockchain is designed to have low fees, making it an attractive option for beginner investors without huge portfolios and also for applications that may require a significant number of transactions.
• Decentralised: TON’s blockchain is fully decentralised, meaning no central authority controls the network. This enables a more open and democratic ecosystem where anyone can participate.

Disadvantages:

• Competition: The blockchain space is highly competitive, with many other blockchains that have similar value propositions, such as Solana, attracting attention and adoption. This can make it challenging for TON to stand out and attract users and developers.
• Limited adoption: Although TON has a strong community and a growing ecosystem, it still has limited adoption compared to other blockchains like Ethereum. This can make it challenging for developers to find users and build successful applications.
• Limited developer support: Although TON has a growing community of developers, it still has limited support compared to other blockchains. This can make it challenging for developers to find the resources and support they need to build successful applications.

Toncoin’s future is still unknown, and its success or otherwise depends on various factors. While it did rocket into the top 10 cryptocurrencies earlier in 2024, it has since slipped back to be in the top 15.

If Toncoin can successfully integrate with Telegram’s massive user base, it could significantly increase adoption and usage, driving up the demand for the coin and pushing its price higher. Additionally, if Toncoin can attract a larger developer base and establish itself as a leading platform for decentralised applications, it could further increase its value and potential for growth.

The US elections in November have seen a record number of pro-crypto politicians get voted into power, with the crypto industry expecting to see more favourable regulation coming out of the US. This could be a catalyst for the crypto market to witness further adoption, which, of course, includes TON.

However, if Ethereum or other major blockchain platforms successfully implement scaling solutions and improve their transaction processing times, it could reduce Toncoin’s competitive advantage and make it less attractive to users and developers. This is already the case with Solana, which has seen drastically higher adoption than TON despite having similar value propositions.

However, given TON’s unique connection with Telegram, there is a huge opportunity for the network to integrate directly with Telegram to allow payments between users and direct access to blockchain applications through the app. This would introduce TON to almost a billion users if implemented successfully and is a huge potential catalyst for the project if executed.

Ultimately, Toncoin’s future depends on various factors like developments in the competitive landscape and its ability to integrate with Telegram’s user base seamlessly. While there are challenges, the project also has many opportunities for growth and success. If Toncoin can navigate the challenges ahead and capitalise on its strengths, it has the potential to become a leading player in the blockchain and cryptocurrency space.

Buying Toncoin is a relatively straightforward process that can be completed in just a few steps:

Step 1: Choose a Cryptocurrency Exchange

The first step is to choose a reputable cryptocurrency exchange that lists Toncoin. Some popular exchanges that list Toncoin include Coinbase, Binance, and Kraken. Consider factors such as fees, security, and user interface when selecting an exchange.

Step 2: Sign Up and Verify Your Account

Once you’ve chosen an exchange, create an account by providing some basic information such as your name, email address, and password. You must also verify your identity through a know-your-customer (KYC) process, which typically involves uploading an image of a government-issued ID and a selfie.

Step 3: Deposit Funds

Next, deposit funds into your exchange account using a payment method accepted by the exchange, such as a bank transfer, card, or another cryptocurrency.

Step 4: Buy Toncoin

After depositing funds, navigate to the exchange’s trading platform and search for Toncoin (TON). Click “Buy” and enter the amount of Toncoin you want. You will need to decide whether to use a market order to buy instantly or a limit order to set the price at which you would like to buy it later. Review the transaction details and confirm the purchase.

Step 5: Store Your Toncoin

Finally, transfer your Toncoin to a secure wallet to store your coins safely. While many people opt to keep their cryptocurrencies on the exchange they used to buy them, this isn’t always the safest way to store them as it requires trusting a third party to look after your assets. Instead, you can use a self-custody wallet to store your assets, which is generally safer if set up correctly.

Now you have successfully purchased TON, remember to stay up to date on the latest news and project developments so you can manage your investment effectively. As with any investment, it’s essential to always do your research, set a budget, and only invest what you can afford to lose.

This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.