The Open Network: Investor’s Guide 2024

In this guide, we’ll break down everything you need to know about the Open Network and its native cryptocurrency Toncoin! 

What is the Open Network?

The Open Network (TON) is a highly scalable, decentralized layer-1 blockchain originally developed by Telegram. 

The Open Network is designed to be fast, scalable, and user-friendly. According to the project’s website, TON is designed to be a ‘blockchain of blockchains’ that allows different blockchains to interact with each other. 

Through its unique blockchain architecture, The Open Network can handle more than a hundred thousand transactions per second! 

The Open Network is integrated with the messaging app Telegram — which means that the blockchain essentially acts as the economy for Telegram’s user base of over 800 million users!

The Open Network’s native cryptocurrency is Toncoin (also abbreviated as TON). Toncoin allows users to pay blockchain fees on The Open Network and participate in governance decisions! 

How does The Open Network work? 

The Open Network uses a Proof of Stake (PoS) consensus mechanism, making it more energy-efficient compared to traditional Proof of Work blockchains. 

The Open Network also uses dynamic sharding — which essentially means that the blockchain is split into different ‘shards’ that validate transactions in parallel. This architecture allows The Open Network to offer high efficiency and fast transaction speeds! 

Let’s walk through a few different parts of The Open Network ecosystem: 

TON Blockchain: At the heart of the ecosystem is the TON Blockchain. It’s called a blockchain of blockchains — allowing different blockchains to interact without sacrificing scalability, transparency, and decentralization. 

TON DNS: This service allows users to name their own wallets. Instead of a long string of numbers and letters as your wallet address, you can have a custom, easy-to-remember short name. 

TON Storage: TON storage is a decentralized storage solution that allows users to store public and private data. The technology is based on peer-to-peer file-sharing technology — which allows users to store files without taking up space on their devices. 

TON Sites: TON sites allow you to create your own website domain. While these work much like regular websites, they’re only available on The Open Network. You can use public entry points to access these sites. 

What is The Open Network’s relationship with Telegram? 

While TON is no longer owned by Telegram, the two entities still have a close relationship. Toncoin is integrated into Telegram’s native crypto wallet and Telegram content creators can receive a payout through The Open Network. 

Who owns The Open Network? 

TON was originally developed by Telegram, with the project attracting more than $1 billion in investment from esteemed venture capital firms like Kleiner Perkins and Benchmark. However, Telegram was forced to abandon the project due to a ruling from the US courts. 

Eventually, The Open Network transitioned to an open-source project, where the network is essentially ‘owned’ by TON tokenholders. In the past, TON tokenholders have made important governance decisions — such as voting to freeze Toncoin held by inactive mining wallets. 

Why Invest in TON?

Investing in TON might be appealing due to several factors:

• Scalability and Efficiency: TON's architecture allows the network to offer fast transactions with low fees! 
• Integration with Telegram: TON’s integration with Telegram means that the network can potentially reach a user base of more than 800 million! 
• Innovative Features: TON supports a range of blockchain-based applications, from decentralized finance (DeFi) to crypto games! 
• Low inflation: TON has a low inflation rate — set at 0.6% annually. 
• Usage: In April 2024, more than $100 million of TON was airdropped to community members, leading to a spike in usage on the blockchain! As of May 2024, TON is seeing more than 3 million transactions per day! 
• Staking rewards: You can stake TON and earn a passive income from your holdings!

How do I buy Toncoin? 

The easiest way to buy Toncoin is through Telegram’s native cryptocurrency wallet — which supports buying crypto with a credit/debit card and peer-to-peer purchases. Alternatively, Toncoin is available on exchanges like KuCoin. 

Why is TON going up? 

In 2024, the price of TON went from $2 to $6 within the span of three months! It’s likely that this rally was caused by multiple factors — including a bull run in the wider crypto ecosystem and the success of Telegram-based games like Notcoin. 

Is Toncoin a better investment than Ethereum? 

Wondering whether Toncoin is a better investment than Ethereum? Let’s go through the pros and cons of investing in TON over ETH. 

Pros 

• Fast transaction speeds: The Open Network offers faster transaction speeds than Ethereum.
• More growth potential: It’s possible that Toncoin has more growth potential than established cryptocurrencies like ETH since The Open Network has a smaller market capitalization and is growing rapidly. 

Cons 

• Ethereum first-mover: ‘Ethereum killers’ with fast transactions speeds have emerged over the years, but all have failed to overtake Ethereum as the #1 smart contract blockchain. It’s possible that Ethereum has a ‘first-mover advantage’ as the first smart contract blockchain on the market. 
• Ethereum user base: Ethereum’s large user base and network of developers give it an advantage over upstart smart contract blockchains like The Open Network. 
• TON has higher risk: Generally, newer cryptocurrencies like TON are considered more risky than established cryptocurrencies like ETH. 

How is Toncoin taxed? 

Like other cryptocurrencies, Toncoin is subject to capital gains and income tax. 

If you received a Toncoin airdrop, your airdrop will be considered ordinary income based on its fair market value at the time of receipt.