The main problem hindering cryptocurrencies and blockchain from becoming mainstream technologies is the lack of seamless user experience. Various cryptocurrency projects are devoted to making the user experience no different from using the modern internet. Telegram is a secure messaging platform with 700 million active users per month, and it aims to achieve this goal through Toncoin.
Toncoin is a blockchain designed specifically for use with the Telegram application. This article will explore the controversial history of TON, its use cases, and analyze whether it can maintain its position as one of the top 15 cryptocurrencies by market capitalization.
Telegram Open Network (TON) was first announced in 2018 and is affiliated with the Telegram messaging application. Initially, the project aimed to raise funds for Telegram and provide a way to monetize its platform, as the company does not operate advertisements and struggles to achieve profitability. It aimed to become a decentralized protocol, turning Telegram into a super app, like WeChat, but decentralized. As of April 2018, the private sale initial coin offering (ICO) raised nearly $2 billion, making it one of the largest ICOs in history.
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The network was originally planned to launch in October 2019, but the U.S. Securities and Exchange Commission (SEC) restricted the distribution of TON tokens (then known as Grams). They were concerned that, due to the structure of the sale, the token sale may constitute an unregistered securities offering. Private buyers were not purchasing tokens for personal use but for resale to the public.
This prolonged legal battle led to Telegram’s separation from the project in 2020, with Telegram eventually returning over $1 billion to buyers to settle the case. Subsequently, the TON Foundation renamed it “The Open Network” and oversaw the project, and the token was renamed Toncoin.
Like many blockchain platforms compatible with smart contracts, TON aims to build an ecosystem for payments, collectibles, and games. It also has a decentralized VPN service and storage network, two features that set it apart from most major smart contract platforms. As a chain designed to scale to billions, it uses sharding technology for high scalability with low transaction fees. Additionally, it draws inspiration from the Ethereum Virtual Machine and is compatible with Ethereum smart contracts, albeit with some minor differences. As the native currency of the network, TON is used for paying transaction fees and rewarding validators for maintaining network security.
Due to Telegram’s direct integration of the TON wallet into the Telegram application, the recent popularity of TON has not diminished. Anyone outside the United States can now interact with the @wallet bot to set up their TON account and start interacting with the TON ecosystem directly from their Telegram account. With the explosive growth of Telegram cryptocurrency bots like Unibot, it is evident that users enjoy this type of Web3 interaction as it does not require storing private keys or using extensions like MetaMask to interact with the network.
Accessing TON through the Telegram application is the product that is closest to a decentralized super application. Although Telegram has a large user base, it is unclear how many of these users will become frequent traders on TON. If an unknown network wants to become well-known, this type of collaboration is needed to expose hundreds of millions of users to beneficial products through a simple onboarding process. However, current leaders in the smart contract blockchain field, such as Ethereum and Solana, have significant network effects in terms of users, developers, and on-chain liquidity.
In the backdrop of regulatory challenges and a sluggish crypto market, TON hopes to find a suitable product market within one of the largest messaging applications in the world. Only time will tell whether TON brings new users to Web3 and becomes a top-tier smart contract platform. Before that happens, it would be wise for TON’s competitors to consider creating a seamless onboarding experience and emphasizing a simple user experience to bring as many novice users as possible into their blockchain ecosystems.
Author: LianGuaiBitpushNews Lincoln Murr, Mary Liu
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