History of TON Mining
Toncoin (TON), the native cryptocurrency of The Open Network (TON) blockchain, emerged from a unique origin story. In 2018, messaging giant Telegram embarked on an ambitious project – Telegram Open Network (TON) – envisioned as a competitor to the established Ethereum blockchain. To fuel this endeavor, Telegram conducted a successful fund-raiser that surpassed its initial $850M target and finally generated $1.7B. Subsequently, in November 2019, Telegram launched testnet2, allocating a portion (1.45%) of the total supply to incentivize developers and testers for their contributions.
The Legal Hurdle
Unfortunately, Telegram's TON aspirations faced a significant obstacle in the form of the US Securities and Exchange Commission (SEC). The SEC filed a lawsuit against Telegram, claiming that TON token constituted a security. This legal challenge culminated in a 2020 settlement agreement, forcing Telegram to abandon further development of TON blockchain. However, the project's potential resonated with a dedicated community of independent developers who, undeterred by the setback, decided to revive the project, renaming it The Open Network (TON).
Mining on a Proof-of-Stake Network
The concept of «mining» on a proof-of-stake (PoS) network was a novel proposition before TON's arrival. Following the 2020 court settlement, Telegram placed all network tokens within twenty «Proof-of-Work Giver» smart contracts, ten of which delivered between 10 and 100 TON every several minutes (small givers), while the remaining ten delivered 10,000 TON at least once a day (large givers). This innovative approach enabled a period of «initial proof-of-work» (IPoW), where any user could participate in mining Toncoin on an equal footing.
TON Mining Process
The process of mining TON required that miners have some technical knowledge regarding how to interact with the «giver» smart contracts. It's important to note that TON initially held no intrinsic value, functioning solely as a test token. However, within a year, the project's trajectory shifted, and Toncoin evolved beyond its testnet origins. The type of giver a miner interacted with depended on the purpose of the mining. Large giver contracts were for miners who desired to function in the ecosystem as validators. This initial mining phase commenced on June 6, 2020, and concluded on June 28, 2022.
While TON mining was going on, the miner who got TON reward for each mining cycle was required to solve a mathematical challenge put forward by the Giver smart contract before other miners. All the other miners who entered the race to get the solution first ended up with nothing, and the cycle continued until all available Toncoin was mined.
Decentralized Distribution
Mirroring the organic growth witnessed with Bitcoin, tens of thousands of miners were able to acquire TON tokens through the IPoW mechanism, bypassing the traditional routes of Initial Exchange Offerings (IEOs), Initial Coin Offerings (ICOs), or token sales. This period saw an average daily distribution of 200,000 TON tokens, fostering a decentralized distribution model. The exhaustion of the Giver smart contracts marked the official end of traditional TON mining on the network.
The history of TON mining is an intriguing narrative of innovation, legal challenges, and community resilience. From Telegram's initial vision to the independent TON network's current state, TON's journey underscores the ever-evolving landscape of blockchain technology.