Toncoin (TON). The Cryptocurrency from Telegram. Origin Story, How to Buy and Where to Store

Dmitrii Vlasenko

May 7, 2024

Toncoin TON Wallets How to Exchange

Toncoin, which used to be called Gram, is the cryptocurrency that runs on the TON network.

Toncoin (TON) is a decentralized layer-1 blockchain that was created by Telegram in 2018. After that, the project was given up. The TON Foundation took it over and changed the name from “Telegram Open Network” to “The Open Network.”

Since 2020, the technology has been improving with the help of the TON Foundation, a non-profit group of supporters and an independent community of fans.

What is Toncoin

Toncoin is TON's native cryptocurrency. It is used for network operations, transactions, games or collectibles built on TON. TON is a third-generation innovative blockchain initially developed by a team led by the Telegram founders, the Durov brothers. However, due to regulatory issues in 2020, Telegram was forced to abandon its own project and transfer the TON code to an independent community of developers.

The blockchain stands out for its high performance and scalability. In September 2021, it set a world record by processing 55,000 transactions per second. This was made possible by its unique multi-level architecture, which combines the main chain (Masterchain) and multiple workchains.

TON utilizes a hybrid consensus mechanism of Proof-of-Stake (PoS) and Byzantine Fault Tolerance (BFT), ensuring fast transaction finality. Holders of this cryptocurrency can become validators and participate in staking, earning rewards for supporting the network. Toncoin serves various purposes within the TON ecosystem:

Payment of transaction fees and smart contracts.
Means of payment in TON applications and services.
Staking for network security enhancement.
Payment for cross-chain transactions between different blockchains.
Participation in protocol governance through voting.
Purchase of domain names in TON DNS.

According to CoinMarketCap data as of May 2024, TON ranks 9th in the cryptocurrency rankings with a market capitalization of $17 billion. The circulating supply of TON is 3.4 billion coins out of a maximum of 5.1 billion. The current price of TON is $5. In 2021, it was priced at $0.3906. This represents a growth in value of +1002.86% since then.

TON Ecosystem

The Open Network is not just a blockchain but an entire ecosystem of decentralized services and applications. Let's look at the key elements of the infrastructure:

TON Apps

A platform for distributing decentralized applications (dApps) based on TON. Developers can create and publish their applications, while users can find and install them. It includes an app store, wallets, games, exchanges, social networks, and more.

TON Payments

A payment system for fast, cheap, and private transactions. It allows for instant transfers between users with zero fees, unlike standard blockchain transactions that require multiple confirmations. Suitable for micropayments, subscriptions, tips, and other cases requiring frequent transfers between the same users.

TON Sites

A decentralized platform for creating websites and web applications. Unlike traditional websites, these platforms are hosted not on centralized servers but on a distributed network of TON nodes worldwide. This ensures high availability, fault tolerance, and censorship resistance of websites.

TON DNS

A decentralized domain name system integrated with TON Sites. It allows assigning human-readable names like "site.ton" to websites instead of complex blockchain addresses. Unlike the traditional DNS system where domains are controlled by central registrars, domains are fully owned by their owners and cannot be seized.

TON Storage

Distributed file storage based on technology similar to torrents. Files are divided into parts, encrypted, and distributed among network nodes. Each user can connect their computer as a node, providing free disk space in exchange for rewards. The storage ensures high reliability and availability of data compared to centralized cloud storage.

TON Proxy

An anonymous proxy server network based on the blockchain. It allows users to connect to websites and services through intermediate nodes, hiding their real IP addresses. Unlike classic services, this one is fully decentralized and has no single point of failure or control.

TON Services

Tools for developers that simplify the creation and integration of services with the TON blockchain. They include SDKs, APIs, ready-made smart contracts, testing, and monitoring tools. They enable rapid development of dApps, tokens, DeFi, NFTs, and other applications based on this blockchain.

TON Diamonds

A marketplace for creating, buying, and selling NFTs (non-fungible tokens). It allows artists, musicians, bloggers, and other creators to monetize their content through the sale of digital collectibles. It features low fees, high speed, and user-friendliness compared to NFT marketplaces on other blockchains.

All these services are integrated with each other and operate on a unified infrastructure, using Toncoin for internal calculations, fees, and rewards. Thanks to high performance, low fees, and rich capabilities, such an ecosystem opens up new horizons for creating a fully decentralized internet based on the blockchain.

The Emergence of Toncoin: Development Overview

The history of Toncoin began in 2018 when the team of the popular messenger Telegram, led by the Durov brothers, announced the development of the Telegram Open Network blockchain platform. Unable to find a suitable solution among existing blockchains capable of scaling to Telegram's billion-user audience, they came up with the idea of creating their own blockchain from scratch.

In 2018, Telegram conducted the largest ICO (initial coin offering) in history, raising $1.7 billion for project development. The native coin at the time was called Gram. In 2019, the Telegram team published the white paper and source code of TON, launching test networks testnet and testnet2.

However, in October 2019, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Telegram, accusing the project of conducting an unregistered securities sale of $1.7 billion. Telegram disagreed with the claims but was forced to postpone the mainnet launch until legal issues were resolved.

As a result, in May 2020, after lengthy legal proceedings with the SEC, Pavel Durov announced the cessation of work on the blockchain. Telegram returned $1.2 billion (70% of the invested funds) to investors, and the code was made open-source.

Following this, the independent developer community (TON Community) continued to develop the blockchain based on the open-source code. They carefully studied the white paper and architecture, and resumed development in line with the project's original vision.

In May 2021, after a year of stable operation of the TON Community test network, it was renamed the mainnet through community voting. The Gram token was renamed Toncoin to avoid associations with Telegram. The non-profit organization TON Foundation was formed to support and develop the TON protocol.

From this point on, active infrastructure development and ecosystem growth began:

June 2021 - launch of the TON-ETH and TON-BSC bridges.
July 2021 - launch of TON Payments, a platform for receiving crypto payments.
August 2021 - listing of TON on major exchanges Coinbase, Binance, Huobi.
September 2021 - launch of TON Sites, decentralized website hosting.
October 2021 - launch of TON Proxy, a decentralized proxy network.
November 2021 - TON set a record by processing 55,000 transactions per second.
January 2022 - launch of TON DNS, a decentralized domain name system.
March 2022 - total market capitalization exceeded $5 billion.
June 2022 - introduction of the Toncoin deflation mechanism to maintain value.

In the community's future plans are the implementation of sharding and multi-threading features to achieve millions of transactions per second, the launch of TON Storage databases, TVM 2.0 virtual machine, cross-chain bridges with BTC, ETH, and other blockchains, development of libraries for developers, and much more. Thus, with a rich history and unique origin, Toncoin has made an impressive breakthrough less than 2 years after the mainnet launch in May 2021 and continues rapid development. Today, it is one of the fastest, most scalable, and promising blockchains in the market.

Why Toncoin Became Popular

Toncoin is one of the fastest-growing crypto projects in recent years. The cryptocurrency has entered the top 15 cryptocurrencies by market capitalization, surpassing many market veterans.

The reasons for such success lie in several factors:

Association with Telegram and the Durov Brothers

Initially, the blockchain was developed by the Telegram team led by Pavel and Nikolai Durov to introduce crypto payments into the popular messenger. Despite the Durov brothers being forced to abandon the project in 2020 due to SEC claims, the reputation and authority of the Telegram creators are still associated with Toncoin in the eyes of many users.

Periodic Coverage in Telegram Channel

The occasional coverage of blockchain news in Pavel Durov's official Telegram channel only strengthens this connection and generates theories that the Durovs continue to tacitly support the project. Although it is developed by an independent community, many believe that the creators of Telegram still stand behind it.

Large-scale Advertising Campaign

In 2022-23, the TON Foundation launched a massive advertising campaign in the media and social networks. Banners and videos with information about the blockchain appeared on the main pages of YouTube and other top platforms. Although the TON Foundation claims that the advertising is purely informational and does not directly encourage buying the coin, the fact of such extensive promotion attracted huge attention to the project. According to experts' estimates, the advertising campaign budgets amount to millions of dollars; for example, just listing on the Exmo exchange cost approximately $10-15 million.

Impressive Technical Specifications

Ton is not just another blockchain but a high-tech platform embodying advanced developments in the field of distributed systems. The multi-level architecture provides:

Record speed of up to 1-2 million transactions per second (TPS) in perspective.
Low transaction fees — less than $0.01.
Fast transaction finality — 2-3 seconds.
High scalability and fault tolerance of the network.

Thanks to these features, it is suitable for implementing crypto payments, launching decentralized applications (dApps), and other use cases requiring high performance and throughput. In terms of characteristics, it is one of the most technologically advanced blockchains along with Solana, Aptos, Sui, and some others.

Active Ecosystem Development

Another factor of success is the rapid growth of infrastructure and services around the blockchain. Dozens of useful applications and platforms have been launched in the past year: wallets, exchanges, payment systems, NFT marketplaces, proxy services, DNS, website hosting, file storage, etc. This attracts new users and developers to the ecosystem, creating positive feedback. Community activity and constant updates also maintain hype and interest around the project. Combined with aggressive marketing, this works to increase brand recognition and popularity.

Successful Positioning and Tokenomics

Finally, its success is facilitated by the right positioning in the market. It has successfully carved out a niche for fast and cheap next-generation blockchains, displacing competitors like Polygon and Solana. Rebranding Gram to Toncoin allowed distancing from the ambiguous reputation of the Durov project and starting afresh.

Where to Buy Toncoin

There are several main ways to purchase the cryptocurrency Toncoin: through exchanges, on centralized and decentralized exchanges, using Telegram bots, and directly in crypto wallets. Let's consider each option in more detail.

How to buy Toncoin through exchanges

Buying Toncoin on exchanges is one of the easiest and fastest ways, especially suitable for beginners. Exchange services allow you to buy cryptocurrency for fiat, such as dollars, euros, pounds from a bank card or electronic wallets, or for other cryptocurrencies.

Instructions:

Choose the exchange direction.
Fill out the application, specifying the address to receive the coins and the email address.
Transfer the exact amount to the specified details.
Wait for the coins to be received in your wallet.

How to buy Toncoin through Centralized exchanges

Many popular centralized cryptocurrency exchanges list pairs with TON: Binance, Huobi, OKX, MEXC. Trading on them requires mandatory registration and sometimes verification.

To buy Toncoin on a centralized exchange:

Register and verify your account if required.
Deposit funds with fiat money (USD, euros) or stablecoins like USDT.
Find the trading pair TON/USDT or TON/BUSD on the exchange.
Go to the trading page and create a buy order, specifying the quantity and price.
Confirm the order and wait for execution.
The coins will be credited to your exchange wallet, from where you can withdraw them.

How to buy Toncoin through Decentralized Exchanges (DEX)

Toncoin is also traded on some DEX platforms in the form of tokens wrapped on other blockchains (Ethereum, BSC). Among them are Uniswap, PancakeSwap, 1inch.

Buying on DEX occurs as follows:

Connect a Web3 wallet to the platform
Ensure that there is enough currency on the balance for the purchase (e.g., ETH, USDT).
Go to the token exchange section.
Choose a pair for exchange, for example, USDT to TON.
Enter the amount and confirm the transaction.
The wallet will ask for confirmation and payment of gas in the native currency of the network.
Toncoin will be credited to your Web3 wallet balance.

How to buy Toncoin through Telegram Bots

You can use special Telegram bots to buy Toncoin. Among them are:

Cryptobot - an official multi-currency wallet with a purchase function.

Buying from bots occurs similarly:

Find the bot on Telegram and launch it.
Select the "Buy Toncoin" option.
Specify the amount and payment method.
Transfer the funds to the specified details.
Receive the coins in your bot's balance or external address.

How to buy Toncoin in a cryptocurrency wallet

Finally, you can buy the currency directly in some crypto wallets recommended by developers:

Coin Wallet - a wallet with a purchase function through Moonpay, Guardarian, Onramper, Bitnovo, BTC Direct. More details in the article
Tonkeeper - a wallet with a purchase function through Moonpay;
Tonhub - a wallet with a top-up option through Simplex.

Instructions:

Install and launch the wallet application.
Select the "Buy" or "Top-up" option.
Specify the purchase amount and payment currency.
Fill in the card details and confirm the payment.
The purchased coins will be instantly credited to the wallet address.

Where to Store Toncoin

When purchasing the cryptocurrency Toncoin, it is important to choose the right wallet for storage. There are three main options: non-custodial wallets, exchange wallets, and Telegram bots. Each has its own features and drawbacks.

Storing Toncoin in Non-Custodial Wallets

A non-custodial wallet is characterized by the fact that only the user owns the private access keys. This has several advantages:

Full control over the funds. No one except you can seize or block your coins (with rare exceptions like validator voting).
No need to trust third parties. There is no need to worry about the hacking or bankruptcy of the service.

However, such wallets also have downsides:

Risk of losing access. If you forget or lose the passphrase (set of words) to the wallet, it will be impossible to restore it.
Need to pay network fees. When transferring funds from the wallet, a fee is always charged to the TON validators (usually around 0.1 TON).

Among reliable non-custodial wallets for TON, the following can be highlighted:

Tonkeeper - the official TON wallet with support for tokens and NFTs, used in the Fragment marketplace.
Coin Wallet - a popular multi-currency wallet that stores TON along with BTC, ETH, and many other coins.
Trust Wallet
Metamask

For maximum security, there are hardware wallets, such as SafePal. These are physical devices that never connect directly to the internet. They require manual confirmation of each transaction, which prevents funds from being stolen even if the keys are compromised.

Storing Toncoin in Exchange Wallets

Storing TON on cryptocurrency exchanges is suitable for those who plan to actively trade the coin. This is convenient as it allows you to instantly exchange TON for other currencies and withdraw to fiat (where available).

Features of exchange wallets:

Ease of use. You don't need to worry about the safety of keys - the exchange does it for you. But this is also a drawback - in case of exchange hacking, bankruptcy, or account blocking, there is a risk of losing access to the coins.
Additional features: exchanges often offer options such as staking, internal exchange, etc.
Recovery of access. Unlike non-custodial wallets, a forgotten password from an exchange account can be recovered through support.
Verification requirement. Most major exchanges require passing the KYC procedure with identity verification.
Fees. Internal transfers on the exchange are usually free, but withdrawing funds may cost more than in the blockchain.

Toncoin is represented on exchanges such as MEXC, OKX, Huobi, Kraken, Bybit, and others. When depositing funds to the exchange balance, you may need to specify a memo (comment) for the transfer if the platform requires it.

Storing Toncoin in Telegram Bots

Given the close connection between Telegram and TON, special bots have become a popular solution for storing coins. In terms of functionality and risks, they are similar to exchanges, but they have one important feature: your Telegram account is your access to the wallet.

Among reliable bots, the following can be noted:

wallet - the official custodial TON wallet with integration into Telegram and P2P exchange functionality.
CryptoBot - a popular bot for storing and exchanging TON and other coins with a convenient web interface.

When choosing a cryptocurrency storage location, consider your priorities. If maximum security and control are needed, a non-custodial wallet is suitable. If liquidity, exchange features, and ease of use are more important, then choose an exchange or bot. In any case, always store keys or passwords in a secure place.

What Determines the Price of Toncoin

The price of the cryptocurrency Toncoin, like any other digital asset, is influenced by numerous market and fundamental factors.

Let's consider the main ones:

TON News and Partnerships: Announcements about technological updates, new product launches in the TON ecosystem, listings on major exchanges, or partnerships with well-known businesses usually have a positive impact on the price. Conversely, delays in the roadmap, blockchain issues, or partners leaving can negatively affect the price.
Information Background: Coverage of TON in the media and social networks, influencer activity, team participation in conferences, and other information triggers can both fuel hype around the coin, driving pumps, and fuel FUD, leading to dumps. High-profile scandals and hacks also damage the project's reputation and suppress the price.
Overall Cryptocurrency Market Situation: The price of TON is highly correlated with the dynamics of Bitcoin and other major coins. During a bull market, TON usually rises, and during bear markets, it declines, like most altcoins. Investor sentiment and speculative cycles can both drive up and crash the price of TON.
Adoption and Use of Toncoin: The more real users use TON for payment of goods/services, transfers, and other functions, the higher the demand for the coin and its price. Increasing numbers of active addresses, transaction volumes, dApps, and other adoption metrics enhance the fundamental value of Toncoin.
Tokenomics and Emission: Current and future parameters of issuing new TON coins also affect their price through supply/demand balance. In particular, TON has transitioned to a deflationary model, where a portion of coins is burned with each transaction, making the token more scarce. Halvings (halving of validator rewards) can also exert positive pressure on the price.

The price of TON is the result of the interaction of many factors influencing supply and demand for the coin in the market. To make informed investment decisions, it is important to track both the overall market dynamics and specific fundamental triggers for TON.

Can Toncoin Be Mined

Unlike many other cryptocurrencies, Toncoin cannot be mined in the traditional sense of the word. TON is a blockchain operating on the Proof-of-Stake consensus algorithm, where new blocks are not created by miners but by validators, who receive rewards for this.

However, it was not always like this. Initially, a large part of TON coins (98.55% of the maximum supply) was distributed through a unique mechanism called Initial Proof-of-Work (IPoW). It consisted of a series of PoW Giver smart contracts, which allowed anyone interested to mine TON on equal terms from June 2020 to June 2022.

Notably, this mining was not initially planned but emerged spontaneously. When the Telegram team was forced to abandon the TON project due to SEC claims, developers pre-allocated all coins through smart contracts so that the community could develop the network itself.

Therefore, in July 2020, when the TON code became public, enthusiasts began to mine coins, although they then had no real value. The daily emission was about 200,000 TON. As a result, all coins were distributed among tens of thousands of miners without ICOs or other sales methods.

Some of the mined coins formed the basis of the TON Foundation and TON Reserve organizations, supporting ecosystem development. And on June 28, 2022, TON mining came to an end - all coins from the PoW Giver contracts were successfully mined.

Now TON has fully transitioned to Proof-of-Stake, where the security level and network operation are ensured by validators - nodes with a large amount of TON (at least 100,000) and powerful equipment. Validators receive rewards in the form of new coins for each block created.

Any TON holder can participate in staking - transferring their coins to a validator to increase their stake. For this, owners of stacked coins receive a portion of the validators reward (usually 10-15% per annum). Staking is considered analogous to mining in Proof-of-Stake networks.

Conclusions

Let's consider the main advantages and disadvantages of Toncoin as an investment asset.

Advantages of Toncoin

Strong Fundamental Foundation. TON was created by well-known developers (the Durov brothers) and is closely associated with the popular messenger Telegram, which has garnered significant attention and trust for the project from the start. Unlike many other cryptocurrencies, TON has a well-thought-out concept and a clear development plan.
Rapidly Growing Ecosystem. Within a short period, an extensive infrastructure has formed around TON, including validators, exchanges, wallets, exchanges, payment systems, NFT marketplaces, proxy services, domain names, etc. TON is positioned as a multifunctional blockchain for creating a fully decentralized internet and is already developing key services for this purpose.
Wide Range of Use Cases. Toncoin is not just a speculative token but a means of payment for real services within the TON ecosystem. It can be used to pay fees, purchase domains and storage, participate in project management, and voting. The more useful applications there are in the network, the higher the demand for TON.
High Popularity and Recognition. Thanks to its association with Telegram and extensive advertising campaigns, the TON brand is well-known even among people who are distant from cryptocurrency. This attracts new users and investors to the project, many of whom come from the Telegram audience. The media attention and hype surrounding TON largely drive interest in the coin.
Complete Decentralization and Transparency. Unlike many other blockchains, TON is developed by an independent community without a single governing body. The project's source code is fully open, allowing anyone to study it, propose updates, or launch their own nodes and services. This enhances trust and security within the network.

Disadvantages of Toncoin

Negative Information Background. Due to conflicts with the U.S. Securities and Exchange Commission (SEC) and Pavel Durov's forced withdrawal from the project, TON has acquired a mixed reputation. Many investors view the project with suspicion due to its legal issues and jurisdictional changes. Additionally, the hype and active promotion of TON have led to conspiracy theories about secret backers of the project and price manipulation.
Bubble Risk Due to Hype. The media attention surrounding TON is a double-edged sword. On one hand, it attracts new investors, but on the other hand, it can inflate a bubble when the asset's price significantly deviates from its fundamental indicators. A massive influx of speculative traders focused on quick profits can trigger sharp price pumps and dumps and high volatility.
Uncertainty in Evaluation. Like many cryptocurrencies, determining the fundamental value of TON is quite challenging. The coin's price largely depends on speculative factors such as overall market sentiment, news background, and the activity of major players. In this regard, TON remains a high-risk asset, the fair value of which is difficult to calculate.

TON is an ambitious and promising project that has attracted significant attention from the cryptocurrency community and occupies a prominent place in the market in a short period. A high-tech blockchain capable of processing millions of transactions per second with minimal fees, actively developing an ecosystem of services and applications, and supported by a large community of developers and users - these factors make TON one of the most promising blockchains of the new generation.