TonCoin: Is there any future?
If you are not a subscriber of The Crypto Intelligence Report, join other investors who get in-depth crypto content weekly and other perks only subscribers get access to.
Introducing TON
TON is an ultra-fast and user-friendly blockchain designed to host individual users and enterprises. The project was created by Telegram founder Pavel Durov and his brother, Nikolai, in 2017, but three short years later, Telegram walked away from the project for good.
TON is led by an open-source community of experienced developers consisting of some of the best programmers in the world and Telegram blockchain contest winners. Applying its existing ecosystem of communities, developers, publishers, payment providers, and merchants, TON is uniquely positioned to establish the first-ever mass-market cryptocurrency in history.
Apart from processing millions of transactions per second, TON's blockchain-based ecosystem has all the chances to give rise to a genuine Web3.0 Internet with decentralized storage, anonymous network, DNS, instant payments, and various decentralized services. TON architecture is designed to enable the merging of all existing blockchains into a single decentralized network.
Growth narrative
According to the project's whitepaper:
The Open Network (TON) is a fast, secure and scalable blockchain and network project, capable of handling millions of transactions per second if necessary, and both user-friendly and service provider-friendly.
The project was initially developed by the encrypted messaging platform Telegram and called the Telegram Open Network. Telegram planned to launch a token called Gram, but the US Securities and Exchange Commission banned the development in March 2020. The SEC prohibited the issuance of Gram because the digital token sales would constitute securities offerings with no registration exemption available.
Telegram gave up on the project in May 2020, and two developers, Anatoliy Makosov and EmelyanenkoK, took over the development of TON through an open-source community called Newton. Within a year, the community voted to launch on Mainnet and renamed the Newton community as The Open Network (TON) Foundation.
By the third quarter of last year, TON had launched decentralised bridges linking to the Ethereum (TON-ETH) and Binance smart chain (TON-BSC) networks, which enable users to transfer TON tokens to the two blockchain networks. In Q4, the network token was listed on cryptocurrency exchanges such as OKX, Bitget, FTX, Gate.io, and HitBTC.
The project plans to launch more user-friendly features to expand the use cases of the TON ecosystem throughout 2022. According to the TON website, its micropayment platform (TON Payments) and DNS are 90% complete and are scheduled to launch in Q2 this year, while the 75% complete proxy network will be launched in Q3.
The TON Payments feature will allow users to make "instant off-chain value transfers between users, bots and other services," while TONS DNS will enable the browsing of blockchain to become similar to surfing the internet.
Innovation
The heart of the platform is the unique blockchain with a scalable and flexible architecture consisting of a master chain and up to 2⁹² accompanying blockchains. Top-notch approaches and methods implemented in TON make sure it will live up to its bold promise of processing millions of transactions per second.
Infinite sharding and outside-chained transactions: Revolutionary methods are applied to increase the admitted network capacity and the speed of transactions at the same time. In the first place, it's an illimitable sharding. Blockchains that already exist have a problem because the database of all transactions, which must keep in themselves miners, began to occupy hundreds of gigabytes, creating difficulties for blockchain's different scales.
TON solves this problem with sharding; it means that the blockchain's separated into individual parts, which work autonomously, with the rare exception of the transaction's sending between different shards. This economizes disk space for miners considerably (in TON, they are called validators), which help significantly accelerate blockchain's work.
Correction of blocks in a chain: For the criminals' attack's reflection, a number of methods were developed on TON. TON solves «the problem of Byzantine Generals» as required for any blockchain. Furthermore, the blockchain of the Durov brothers allows for correcting past blocks in a chain of transactions in case they were defined as fraudsters. This is the method of called vertical blockchain, which allows the creation of a two-dimensional blockchain, where is «assigned» one additional block on top of the compromised block, which is kept the instruction of its correction.
Instant Hypercube Routing: Smart routing mechanisms ensure swift exchange between any two blockchains regardless of the network size. Given the logarithmic relation between data transfer time and the number of blockchains in TON, scaling to even millions of chains is possible without impairing the processing speed.
Proof-of-Stake Consensus: TON relies on the advanced Proof-of-Stake consensus, where validator nodes use deposit stakes to guarantee their dependability and reach consensus through a variant of the Byzantine Fault Tolerant protocol. This resource-saving mechanism enables TON to focus the node's computing power on handling transactions and smart contracts, further increasing speed and efficiency.
2D Distributed Ledgers: TON relies on the advanced Proof-of-Stake consensus where validator nodes use deposit stakes to guarantee their dependability and reach consensus through a variant of the Byzantine Fault Tolerant protocol. This resource-saving mechanism enables TON to focus the node's computing power on handling transactions and smart contracts, further increasing speed and efficiency.
TON P2P Network: TON platform works according to the principle of the P2P network (the same principle is used for the torrent network), where all clients are connected into a united network of one rank. It allows not to have centralized servers and, thanks to it, to avoid censure in different states with undemocratic regimes.
Furthermore, inside the TON platform, strange developers can create their own public proxy, which helps users to obtain access to the platform in the case of active attempts of the state to block entrance points on TON (IP addresses) in one or another country.
TON Storage: TON Storage is a decentralized file depository that keeps data on the client device's part. With storage and distribution of files are occupied exceptionally those devices that gave clear agreement for it. The working principle of the TON file's storage can be compared with the Torrent network.
But in a different torrent network, users, who gave their disk space for using the storage, can obtain material reward in the form of TON coin cryptocurrency for this. Exactly like this, users, who will want to obtain more cloud disk space, they can pay for it with the help of the same built-in cryptocurrency. The users can find needed files with TON DNS technology's help.
In case of limitation attempts, censoring from the stateside, or attempts of tracking of storage of information places, storage TON channels are protected with the help of cryptographic coding. The anonymity of files kept on TON Storage is also ensured due to the use of an IP address scan with the help of TON Proxy.
TON, like torrents, does not have to control centralized servers, turning off or blocking that can log TON out from the system. Furthermore, TON Storage has above its infrastructure TON Services, which is a platform of distributed applications, which allows strange developers to improve their analogue of YouTube based on TON storage, it means it gives users the opportunity of video streaming, searching video files, their catalogues, and recommending system. The same principle can be applied to any kind of content: music, books, games, etc.
TON Proxy: To avoid different limitation types of censure of undemocratic state's organs, The Open Network (earlier Telegram Open Network) contains a proxy mechanism, which strange developers can improve. TON Proxy allows giving users the real functions of anonymizer, hiding their real IP addresses when they contact with one or another platform TON resources, which also makes it possible to fight effectively with the censure organs that pursue political activists, who attempt to calculate them including with the help of IP addresses.
TON Proxy allows network TON to work according to method P2P, which is, in fact, the analogue of Tor architecture. In the case of TON Proxy working, server (centralized) IP addresses, which can be calculated and blocked, are not used.
TON clients interact with each other without the central server, something that allows avoiding attempts to block the platform in one or other regions. Also, the mechanism of blocking TON is inaccessible to regulatory organs through the audition of packs of traffic in the network. Since TON clients mix in packets of their random traffic values, it does not allow them to accurately identify what service this packet sends at the moment. As a result, Proxy TON deprives regulatory organs of any well-known the moment mechanisms of the blocking of the platform work.
One more TON's important innovation is the use of «garlic routing» instead of «onion routing,» which is used in Tor. Since garlic routing allows besides the information exchange in the network along with the system «one to one», it also allows adding the version «one to many» for the improvement of valuable Darknet sites in the network. That are required conditions for TON Services to work. By analogy with TON Storage, strange developers can obtain payment in the form of TONCOIN for their proxy being used by other users of the network.
Competition
TON, Solana, and Ethereum 2.0 are examples of Proof of Stake blockchains. But key design and implementation differences mean TON comes out ahead on performance, versatility, and design.
Blockchains have evolved since the original TON whitepaper back in 2017.
Here, we compare TON with two other leading layer-1 blockchains:
Solana
The Upcoming Ethereum 2.0
These two blockchains claim to be the ultimate solution for mass adoption, but it's unclear whether they'll be able to meet the high expectations of developers and communities.
TON is a multi-chain project with generalized support for all transactions.
Ethereum 2.0 is a major upgrade for the Ethereum blockchain network that is currently in development, also known as Eth2. It's designed as the Beacon Chain with up to 64 shardchains but only has limited cross-chain communication. Ethereum 2.0 is not yet implemented as of May 2022.
Solana is a single-chain blockchain project optimized to execute specialized transactions at high speeds.
What's important to end-users is usually transfer fees and reliability, but they do also rely on technical parameters covered by this analysis.
source: https://ton.org/analysis
Block and finalization time
Block time and time-to-finality represent transaction speeds crucial for consumer products. The faster blocks are generated, the less time users have to wait for money transfers or smart contract execution:
TON generates a new block on each shardchain and the masterchain approximately every 5 seconds. New blocks on all shardchains are generated approximately simultaneously, and a new block on the masterchain is generated approximately one second later because it must contain the hashes of the latest blocks of all shardchains.
Ethereum 2.0 has slots and epochs. A slot is 12 seconds in which a new Beacon Chain and shardchain block can be proposed by a validator. 32 slots make up an epoch (6.4 minutes). There are specific rules dictating that block finality requires at least 2 epochs. This means a time-to-finality of at least 12.8 minutes.
Solana claims to generate one block every second or faster, but it has an extended block finalization time. A block is usually finalized after 16 voting rounds, with each round expected to last approximately 400 milliseconds. This means a time-to-finality of 6.4 seconds.
Performance
Blockchain performance indicates whether the platform is capable of processing smart contracts at scale, which is crucial for more complex blockchain products — e.g., DeFi, GameFi, and DAOs.
TON is a Turing-complete and high-performance blockchain that can accommodate any transaction complexity on a masterchain and all of its workchains.
Ethereum 2.0 has Turing-complete EVM only on the Beacon Chain with a network limit of 15 transactions per second. A lack of cross-shard interactions means additional transactions will not be executed in a truly decentralized environment.
Solana is Turing-complete, but it performs well only with a large amount of very simple transactions of several predefined types (which change only an account balance, not a state) and only when all the data of all accounts fit into RAM (and when it doesn't, the blockchain can face some issues).
Scalability
Scalability is directly correlated with the number of users and their interactions (transactions, smart contract execution, infrastructure requests).
TON supports workchains and dynamic sharding. The system can potentially accommodate up to 232 workchains, each of which can be subdivided into up to 260 shardchains with near-instant cross-shard and cross-chain communication, resulting in millions of transactions per second.
Ethereum 2.0 will support up to 64 shardchains and the Beacon Chain. At this stage, it is unclear what the exact capabilities of the new 64 shardchains will be and how the shardchains will interact with one another. However, if messaging among shardchains is ever introduced, one would have to wait for 10–15 minutes until the finalization of the shardchain block originating a message before that message can be processed on another shardchain.
Furthermore, the additional shards are currently not supposed to be able to run EVM smart contracts at all. Instead, they are supposed to be used as additional data storage in a distributed ledger.Solana has neither sharding support nor workchain support.
As of 2022, the TON blockchain remains one of the few truly scalable blockchain projects. As such, it is still the most advanced blockchain project, capable of performing millions and, if it becomes necessary in the future, tens of millions of true Turing-complete smart contract transactions per second.
Not financial advice. The Crypto Intelligence Report is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Do your own research and make an informed decision.
📺 Free Masterclass for Investors in 2022
In this exclusive Masterclass dedicated to forward-thinking investors, Stratmont Brothers’ trading fund Founders Kevin Loebler and Gavin Dantez help you understand the current tumultuous economic situation and walk you through the wealth opportunities hidden behind it. Register now for free below.
Here are the articles we’ve released so far:
Visit our channel:
Website at StratmontBrothers.com
Substack at Stratmontbrothers.substack.com
Masterclass at Stratmontbrothers.com/masterclass
Please share with your friends and colleagues.