Toncoin, often recognized as the cryptocurrency initially associated with Telegram, has made a significant comeback. After a setback in 2020 due to regulatory challenges, it has returned with strong market demand and is now supported on major exchanges, even receiving an endorsement from Telegram's founder.
Before delving into the purchasing process, let's briefly examine what Toncoin is and the reasons behind its recent price surge.
Recent Performance and Price Surge of TON
Despite a minor recent dip of 1.76%, Toncoin (TON) has demonstrated strong market performance. As of mid-June 2024, it is trading around $6.93 with a market capitalization of approximately $16.8 billion, ranking it among the top ten cryptocurrencies globally.
This positive momentum is driven by several key factors:
- A substantial increase in its Total Value Locked (TVL), which has surpassed $478 million. This indicates robust capital flowing into its decentralized finance (DeFi) protocols and reflects growing investor confidence.
- A large majority of TON holders are currently in a profit position, which fosters positive market sentiment.
- A significant concentration of supply—around 60%—is held by large investors. This suggests strong long-term confidence in the asset, though it's important to be aware of potential market volatility.
Technical analysis supports this bullish outlook, with strong support levels holding despite some market volatility. The combination of these fundamental and technical factors underpins Toncoin's recent price appreciation.
What Is Toncoin (TON)?
Toncoin (TON) is the native cryptocurrency of The Open Network, a decentralized Layer 1 blockchain. The project originated from Telegram's "Telegram Open Network" initiative in 2018. When Telegram stepped away from the project, an independent community of enthusiasts, known as The TON Foundation, took over its development and rebranded it to "The Open Network." The token itself, formerly known as Gram, was renamed Toncoin.
Key Features of Toncoin
Toncoin stands out in the crowded cryptocurrency space due to its unique technological foundations:
- Distributed Supercomputer: The TON Blockchain is designed as a "super server" for a decentralized internet. It is engineered to handle millions of transactions per second (TPS), providing a foundation for a fast and secure web experience.
- High Performance: TON is built to manage complex operations like smart contracts and large-scale transactions efficiently. This makes it highly suitable for applications in DeFi, gaming, and decentralized autonomous organizations (DAOs).
- Rapid Transaction Speed: The network produces new blocks approximately every five seconds, ensuring near-instantaneous transfers and smart contract executions.
- Massive Scalability: Through the use of work-chains and a dynamic sharding mechanism, the network can theoretically scale to accommodate billions of users and process millions of transactions per second without compromising speed.
How Does the TON Network Work?
Understanding the mechanics behind Toncoin helps in appreciating its value proposition.
The Role of Toncoin
TON is the lifeblood of its network. It is used to pay for transaction fees, deploy and interact with smart contracts, and secure the blockchain through staking. It also serves as a medium of exchange within the ecosystem's decentralized applications (dApps).
Sharding for Scale
To achieve its goal of mass adoption, TON uses a sharding mechanism. This process divides the blockchain into smaller, more manageable pieces called shards. Each shard processes its own set of transactions and smart contracts, dramatically increasing the network's overall capacity and speed.
Proof-of-Stake Consensus
The network secures itself through a Proof-of-Stake (PoS) consensus mechanism. Validators are required to stake TON coins to participate in verifying transactions and creating new blocks. This system is energy-efficient and allows anyone to earn rewards by contributing to the network's security.
TON Virtual Machine (TVM)
Smart contracts on TON are run on the TON Virtual Machine, a specialized and optimized environment that ensures they operate smoothly and efficiently.
Understanding Toncoin Tokenomics
Toncoin has a maximum supply capped at approximately 5 billion tokens. New tokens are introduced into circulation as rewards for validators who secure the network by processing transactions on the main chain and shard chains. The inflation rate is designed to be low; the TON Foundation estimates an annual inflation rate of up to 2%, assuming validators stake 10% of the total supply. This controlled emission schedule is an important factor for long-term investors to consider.
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A Step-by-Step Guide to Buying Toncoin in India
Acquiring TON in India is a straightforward process. Here is a general guide on how to purchase cryptocurrencies on a regulated exchange.
Step 1: Choose and Sign Up on an Exchange
Select a cryptocurrency exchange that operates in India and supports Toncoin. Begin by creating an account, which typically requires providing your email address and creating a secure password.
Step 2: Secure Your Account and Verify Your Email
After signing up, you will receive a verification link via email. Clicking this link is the first step in securing your account. Most platforms offer additional security measures, such as two-factor authentication (2FA) using an authenticator app, which is highly recommended over SMS for enhanced safety.
Step 3: Complete the KYC Verification
To comply with regulations, you must complete a Know Your Customer (KYC) verification. This process usually involves submitting proof of identity (like a PAN card) and proof of address. Completing KYC is mandatory for depositing Indian Rupees (INR), trading, and withdrawing funds.
Step 4: Deposit Funds
Once your account is verified, you can deposit INR into your exchange wallet. This is typically done through bank transfer methods like NEFT, IMPS, or RTGS. Some exchanges also offer a peer-to-peer (P2P) platform where you can buy USDT or other stablecoins directly from other users, which can then be used to purchase TON.
Step 5: Purchase Toncoin
Navigate to the exchange's trading section. You can place a market order to buy TON at the current price or set a limit order to purchase it at a specific price point. After your order is filled, the TON tokens will be credited to your exchange wallet.
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Frequently Asked Questions
Is it legal to buy Toncoin in India?
Yes, buying and selling cryptocurrencies like Toncoin is legal in India. Investors must use exchanges registered with India's Financial Intelligence Unit (FIU) and comply with all applicable tax laws, including income tax on profits and a 1% TDS on all transactions.
What is the best way to store Toncoin safely?
For small amounts or active trading, storing TON on a reputable exchange is convenient. For larger, long-term holdings, a more secure option is to transfer your tokens to a private wallet. Hardware wallets offer the highest level of security by keeping your private keys offline.
Why did Toncoin's price recently increase?
The price surge can be attributed to several factors, including a massive inflow of capital into TON's DeFi ecosystem (evidenced by its rising TVL), a high percentage of profitable holders, and sustained confidence from large investors. Positive technical market indicators have also played a role.
Can I stake my Toncoin to earn rewards?
Absolutely. As a Proof-of-Stake blockchain, The Open Network allows users to stake their TON tokens with validators. By doing so, you contribute to network security and earn staking rewards in return, providing a way to generate passive income from your holdings.
What makes Toncoin different from other cryptocurrencies?
Toncoin's key differentiators are its origins from the Telegram developer community, its focus on ultra-high scalability and speed through sharding, and its vision to onboard billions of users. Its integration with the Telegram messaging app also provides a unique potential for mass adoption.
What are the risks involved in investing in Toncoin?
Like all cryptocurrencies, TON is subject to high price volatility. Regulatory changes in India or globally could impact its value. Furthermore, as a technologically complex project, any failures or security vulnerabilities in its code could pose risks. Always conduct thorough research and only invest what you can afford to lose.