If you’ve been following crypto news lately, you’ve probably heard a lot about Toncoin and The Open Network. It’s the blockchain project that started with Telegram and now seems to be everywhere, from Telegram wallets to crypto airdrops. But with all the buzz, it can be hard to understand what TON actually does and why investors are paying attention.
This guide is here to help. We’ll break down The Open Network in simple terms, how it works, what makes it different, and whether it’s worth considering for your crypto portfolio. Whether you’re new to blockchain or just curious about TON’s rise, this article gives you a clear path to understanding it all.
What Is The Open Network (TON)?
The Open Network, or TON, is a decentralised Layer-1 blockchain originally developed by the team behind Telegram. It aims to solve common issues like slow transaction speeds and poor scalability by introducing a fast and efficient infrastructure. Unlike other blockchains that struggle under heavy usage, TON is designed to support millions of users without slowing down.
One of the key goals of TON is to create a “blockchain of blockchains,”a system where different networks can work together smoothly. It’s built with real-world users in mind and integrates closely with Telegram’s ecosystem. This makes TON especially accessible to Telegram’s massive user base. Its native token, Toncoin, powers the network and can be used to pay fees, transfer value, or participate in governance.
Read More: How to Stake Toncoin?
Who Owns The Open Network Today?
While The Open Network was originally developed by Telegram, it has since evolved into a fully open-source project. Telegram stepped away from direct ownership after a legal ruling in the United States. Since then, TON has been maintained and developed by an independent community of developers and tokenholders.
Today, the network is governed by Toncoin holders who participate in decision-making through a decentralised voting system. These tokenholders have already made major governance choices, such as freezing inactive mining wallets to protect the network’s long-term value. This structure gives the community direct control over the future of the project, aligning ownership with active participation.
How The Open Network Works?
To understand why TON stands out, it’s important to look at how the network is built. This section covers the key technologies that power The Open Network and keep it fast, efficient, and secure.
Proof of Stake (PoS) Consensus
TON uses a Proof of Stake (PoS) system to validate transactions. In this model, validators are chosen based on the number of Toncoins they hold and lock up, or “stake.” This approach uses far less energy than traditional Proof of Work models and allows transactions to be processed more quickly. It also makes the network more secure by rewarding honest validators and penalising malicious ones.
Dynamic Sharding
Dynamic sharding is one of the most powerful features of The Open Network. Instead of handling all transactions on one chain, the network splits into smaller parts called “shards.” These shards can process different transactions at the same time, which helps prevent delays and reduces congestion. As demand grows, TON can create more shards to keep things running smoothly without compromising performance.
TON Virtual Machine (TVM)
The TON Virtual Machine is the engine that runs smart contracts on the network. It’s designed to be lightweight, fast, and easy to upgrade. Unlike some older blockchains, TON can execute contracts more efficiently, which means apps built on the platform respond faster. The TVM also supports complex logic, making it suitable for a wide range of applications beyond simple token transfers.
Read More: The Best Places to Store Your Cryptocurrency
Core Components of The Open Network Ecosystem
TON isn’t just a blockchain, it’s an entire ecosystem designed for real-world use. In this section, we’ll explore the main components that make TON more than just a payment network.
TON Blockchain
The TON Blockchain is the foundation of the network. It’s often described as a “blockchain of blockchains” because it allows multiple chains to interact without losing speed or transparency. This design helps TON handle high traffic without sacrificing decentralisation. Each chain can work independently while still sharing data across the network, making it more scalable than traditional blockchains.
TON DNS
TON DNS gives you a human-readable name for your wallet address. Instead of using a long string of random characters, you can register something simple, like yourname.ton. This makes sending and receiving crypto more user-friendly, especially for beginners. It’s a small change that has a big impact on accessibility and ease of use.
TON Storage
TON Storage allows users to store files on a decentralised network. It works like cloud storage, but instead of storing files on a central server, it uses peer-to-peer sharing. This keeps files secure and available without relying on a single company. You can store both public and private data, with access controlled by encryption keys.
TON Sites
TON Sites offer a way to build web pages directly on the blockchain. These sites are only accessible through TON’s network and offer censorship-resistant content hosting. You can register domain names and publish websites without needing a traditional hosting service. It’s a new step toward a more decentralised internet experience.
TON's Connection With Telegram
The Open Network has a unique relationship with Telegram that sets it apart from other blockchain projects. Although TON is no longer owned by Telegram, the two remain closely connected. Telegram has integrated Toncoin into its native crypto wallet, making it easy for users to send and receive funds without leaving the app.
Telegram content creators can also earn Toncoin as payment, which adds a real-world use case for the token. With over 800 million Telegram users worldwide, this connection gives TON instant reach and practical utility. The partnership bridges the gap between a social messaging app and a full blockchain economy, making crypto adoption smoother and more natural for everyday users.
Read More: Top 5 Telegram Cryptocurrency Trading Bots
Why Are Investors Paying Attention to TON?
TON is catching the eye of crypto investors around the world. In this section, we’ll break down the features and milestones that make The Open Network stand out in a crowded market.
Scalability and Low Fees
The Open Network is built to handle over 100,000 transactions per second, which puts it ahead of most traditional blockchains. Thanks to dynamic sharding, TON maintains fast speeds even under heavy load. Its low transaction fees make it cost-effective for users and developers alike, which increases the appeal of building apps or sending crypto on the platform.
Telegram Integration
TON’s integration with Telegram gives it a massive advantage in terms of adoption. With access to more than 800 million users, TON has a built-in audience for its services. Telegram’s native crypto wallet allows users to buy, send, and receive Toncoin with ease, which supports real-world usage and encourages broader crypto participation.
Airdrops and Usage Growth
In April 2024, TON distributed $100 million worth of Toncoin through a major airdrop campaign. This event triggered a noticeable rise in user activity. By May 2024, the network was processing over 3 million transactions per day. These numbers show that interest in TON isn’t just hype, it’s backed by growing on-chain activity.
TON Staking Rewards
Investors are also drawn to TON’s passive income potential. You can stake your Toncoin and earn rewards by helping to validate transactions on the network. The staking process is user-friendly, and returns are generally stable, making it a reliable option for long-term holders who want to grow their portfolio.
Low Inflation
Toncoin’s inflation rate is capped at 0.6% per year, which is significantly lower than many other cryptocurrencies. This controlled supply helps protect the token’s value over time. For investors, low inflation means reduced dilution and stronger long-term growth potential, especially if demand for TON continues to rise.
How to Buy Toncoin (TON)?
Buying Toncoin is a simple process, especially if you already use Telegram. The platform’s built-in crypto wallet offers a quick way to get started, even for first-time users. You can choose from different payment options depending on your location and preferences.
Below are the most common ways to buy Toncoin:
- Telegram Crypto Wallet: Purchase Toncoin directly within the Telegram app using a credit or debit card. It also supports peer-to-peer transactions between users.
- KuCoin: A popular global exchange that offers TON trading pairs and secure wallet storage.
Other Centralized Exchanges (CEXs): Platforms like MEXC, HTX, and Bitfinex also list Toncoin for easy purchase with fiat or crypto.
Toncoin vs Ethereum: Which Is the Better Investment?
With Toncoin gaining popularity, many investors are comparing it to Ethereum, the long-standing leader in smart contract platforms. While both projects aim to support decentralized apps, they differ in performance, adoption, and risk level. This section will help you understand how Toncoin stacks up against Ethereum so you can make the right choice:
|
Factor |
Toncoin (TON) |
Ethereum (ETH) |
|
Transaction Speed |
Faster processing with dynamic sharding |
Slower speeds, though improving with Ethereum 2.0 |
|
Adoption |
Growing user base through Telegram integration |
Widely adopted with a large global community |
|
Development Stage |
Still early in its growth phase |
Mature and well-established |
|
Inflation Rate |
Low inflation capped at 0.6% annually |
Variable, recently reduced through EIP-1559 |
|
Staking Rewards |
Offers staking with potential passive income |
Also supports staking through Ethereum 2.0 |
|
Risk Level |
Higher risk due to smaller market cap and newer status |
Considered more stable due to long-term presence |
How Is Toncoin Taxed?
Toncoin is taxed just like other cryptocurrencies. If you sell TON at a higher price than you paid, the profit is considered a capital gain and may be taxable based on how long you held the asset. Short-term gains are usually taxed at a higher rate than long-term gains.
If you received Toncoin through airdrops or staking rewards, that amount is generally treated as income at the time of receipt. You’ll need to report the fair market value of the tokens when they hit your wallet. Keeping clear records of when and how you received or sold Toncoin can make tax reporting easier and help avoid compliance issues.
Read More: Crypto Tax Guides Across The World
Conclusion
The Open Network offers speed, scalability, and real-world use through Telegram, making it an exciting option for crypto investors. From dynamic sharding to user-friendly tools, TON is building a blockchain ecosystem worth watching, especially if you’re exploring new opportunities beyond the usual names.
If you’re investing in Toncoin or receiving airdrops, keeping track of taxes is crucial. KoinX makes it easy to calculate your Toncoin gains, staking rewards, and airdrop income accurately. Automate your tracking and stay compliant with ease, join KoinX today and simplify your TON tax reporting.
Frequently Asked Questions
What Makes The Open Network Unique Compared to Other Blockchains?
The Open Network stands out for its scalability, fast transaction speeds, and close integration with Telegram. Its dynamic sharding and user-friendly tools like TON DNS and TON Storage make it practical for real-world use cases, attracting both developers and crypto users looking for performance and simplicity.
Can I Use Toncoin Outside Telegram?
Yes, you can use Toncoin outside of Telegram. It’s available on several major exchanges and can be stored in compatible wallets. While Telegram offers built-in convenience, Toncoin’s broader use across DeFi apps and staking platforms continues to grow, giving users more flexibility in how they use and manage their holdings.
Is TON a Safe Investment for New Crypto Users?
TON offers strong potential but carries higher risk than more established assets like Ethereum. It’s still a developing project with a growing user base. New investors should do their own research, consider volatility, and only invest what they can afford to lose. Diversifying your portfolio can also help manage exposure.
How Does TON Handle Scalability and Network Congestion?
TON uses dynamic sharding to manage network load efficiently. This technology allows the blockchain to split into smaller chains that process transactions in parallel. As demand grows, more shards are created automatically, keeping the network fast and responsive even under high usage. This ensures smooth performance without slowing down.
