Toncoin – Is it a big deal for cryptocurrency?
The cryptocurrency trend is moving so fast that it can be difficult to keep up. It seems like you can find a new coin or token that brings new features. The innovations are great, but people need a simple way to use all these cryptos.
That’s what Toncoins (TON) and other cryptocurrencies want to solve. Specifically, the TON coin network wants to connect them into one massive and cohesive online hub. Let’s see how the TON network tries to achieve this goal!
First, let’s discuss how Toncoin came to be and what its use-cases are. As you learn more about Toncoin, you may consider adding some to your portfolio. That’s why we will go through the possible benefits and risks of investing in this cryptocurrency.
Overview of how cryptos work
Photo Credit: dreamstime.com
Before we talk about Toncoins and the TON network, we will have to discuss the basics of cryptos. Even though more countries are adopting them, many people still don’t know how they work.
You will need that info to understand how specific cryptos like Toncoin work. Let’s start by talking about Bitcoin (BTC), the first cryptocurrency.
It came out in 2009 intending to make a financial system that didn’t rely on banks or governments. Instead, people will use their computers to help operate the network.
They’re known as miners, and they confirm transactions made with bitcoin. Their computers try to figure out the codes that protect each exchange.
Once they succeed, they get to add another block of data to the network. This is why it’s also called the blockchain. Also, they gain proof-of-work that lets them earn more bitcoin.
All the transactions appear on a public ledger. It shows the details for each, such as the bitcoin addresses of the sender and the recipient and the number of cryptos involved.
Bitcoin came out as open-source, so it allowed people to study and tinker with it. As a result, you can see a huge number of cryptos in the market nowadays.
We even have cryptocurrencies that use different models. For example, Ethereum (ETH) is the second-largest crypto in terms of market cap at the time of writing.
The ETH network uses proof-of-stake instead of proof-of-work. Instead of mining cryptos, you just deposit them. The network chooses which computer or node will confirm a transaction.
You can increase your chances by placing more coins. The bigger your deposit, the larger your earnings can be. Staking works like a savings account, making it easier for people to join.
What is Toncoin?
TON relies on a #PoS protocol that keeps the network democratized and functioning smoothly.
The #blockchain functions through a network of validators who stake a large amount of Toncoin and receive rewards by processing transactions on the network.⬇️https://t.co/zsX3dfZDhN
— TON (@ton_blockchain) February 23, 2022
This cryptocurrency came from an unlikely tech firm: Telegram. It’s an instant messaging app that’s similar to Whatsapp and Viber, and it had high ambitions for itself.
The company of the same name wanted to host decentralized applications (dApps) and quick transactions with its blockchain project called TON.
The acronym stands for “The Open Network,” and it came from the minds of Nikolai and Pavel Durov. However, it encountered scrutiny from the Securities and Exchange Commission (SEC).
That’s why the TON project had to shut down in May 2020. Fortunately, it was able to negotiate with its investors and find independent developers, so it could continue.
Two developers who go by the names EmelyanenkoK and Anatoliy Makosov started Newton, an open-source community that helped create the TON project.
Nowadays, Newton goes by a new name, the TON Foundation. It’s a nonprofit group that retains its original goal of supporting the TON network.
Read More: What Are Crypto Forks?
What does the TON network do?
As #Toncoin ($TON) popularity grows, we want to make sure that our holders are educated in the best ways to store their #cryptocurrency for their strategy.
Everything you need to know is on our Medium: https://t.co/XxoQhdVA93
— TON (@ton_blockchain) February 21, 2022
As mentioned earlier, TON wants to link all the other cryptocurrencies into one big network. As you may expect, connecting all the blockchains can be a huge challenge.
That would mean managing huge amounts of data every second. On top of that, you want to make sure that the TON network maintains its speed as it grows.
Similar to Ethereum, TON uses the proof-of-stake model. However, it uses different smart contracts to make the system run faster. Smart contracts are agreements that execute once their terms are met.
A smart contract doesn’t need a third party to do this, so it can work quickly. What’s more, it uses sharding, the method of distributing data among crypto networks.
This allows the TON network to maintain its speed even as it links to more blockchains. Moreover, the Toncoin network uses 2D Distributed Ledgers, so it can grow new blocks on top of invalidated ones.
Otherwise, it may branch out into new versions of itself called crypto forks. In turn, this could affect the quality of the TON network.
What is Toncoin used for?
$TON differentiates itself in the #crypto space with a product roadmap full of services that will band together to create a fully decentralized internet.
Here is a 🧵 of what they are and how they work:https://t.co/3qvoCMIhgj
— TON (@ton_blockchain) March 19, 2022
Cryptocurrencies allow their networks to serve their purpose, and Toncoin is no exception. Here are its use-cases for the network and its users:
- Payment for processing smart contracts and transactions
- Fees for exchanges among the crypto networks
- Service fee for the apps build on the TON blockchain
- Data storage fee
- Payment for registering domain names and websites on the network
- Payment if users want to create new cryptos with the TON network
- A way for regular users to make passive income
- A way for users to vote on changes to the TON network
Is Toncoin a good investment?
At the time of writing, the Toncoin price was $1.86 each. It had a market cap of $2,274,241,169.80 and a circulating supply of 1,221,401,181 TON.
If you want to invest in Toncoin, note that you can find other coins with a similar purpose. For example, Polkadot (DOT) lets people create blockchains called parachains.
Cosmos (ATOM) also wants to connect all crypto networks to its central hub. Does this mean you shouldn’t invest in Toncoin? That’s up to you.
Related Articles
Final thoughts
This article is not meant to provide investment advice. Instead, it explains how Toncoin works. More importantly, it reminds readers to be wary of the risks of any asset.
The TON price might be cheap right now, but that doesn’t guarantee that it will rise in the long run. Before you invest, make sure you learn more about it, especially from its homepage.
What’s more, you should look at the other cryptos available. You might even find conventional options like stocks to be more appealing. Fortunately, reading more Inquirer USA articles can help you!
