History of mining
Toncoin was distributed by PoW Givers which are smart contracts with certain amount of Toncoin assigned to them.
Toncoin mining is now over
In June 2020, all of the available Toncoin tokens (98.55% of the total supply) became available for mining. The tokens were placed in special Giver smart contracts, allowing anyone to participate in the mining — up until 28 June 2022. Users mined around 200,000 TON daily.
After two years of mining, the last Toncoin was mined, marking the completion of TON’s initial distribution phase.
A new kind of blockchain consensus
Mining on TON Blockchain, which used a proof-of-stake consensus, was a unique case. Unlike older blockchain technologies like Bitcoin that rely on proof-of-work, where mining is crucial for network maintenance, block creation, and coin distribution, TON operates differently. Here, miners' role shifts significantly, as the network depends on a different mechanism to stay functional and distribute new coins.
Mining is the sole method to earn new coins, allowing anyone to become a miner and promoting a fair distribution of tokens across the network's participants.
Next-generation blockchains use a proof-of-stake (PoS) consensus algorithm, eliminating the need for mining. This change speeds up transactions and reduces costs. However, in PoS blockchains, the developers initially issue tokens and manage their sale and distribution to investors and users. This centralized approach to distribution contradicts the spirit and tenets of decentralized technologies.
TON Blockchain was the first to blend these two consensus algorithms. It operates on a proof-of-stake system, ensuring speed and low costs. Initially, however, tokens were distributed through mining, offering a decentralized approach and equal terms for all participants.
We call this approach initial proof-of-work (IPoW). It offers clear benefits and will likely be used for future crypto projects. TON has introduced several innovations like IPoW.
Accidental invention
Mining on TON began spontaneously and randomly.
In 2020, after its court case, the Telegram team agreed on a settlement with the U.S. Securities and Exchange Commission and was forced to cease its work on The Open Network.
To withdraw from the project but allow enthusiasts to explore the technology, they placed all network coins into smart contracts, which anyone could mine on equal terms.
July 6, 2020, marks the start of TON mining, coinciding with the release of mining instructions and the miner code.
Initially, the blockchain was in its testnet, and tokens had no value, intended only for testing. Remarkably, within a year, a thriving Toncoin mining industry emerged.
Distribution
In the end, all tokens were distributed among tens of thousands of miners without conducting an ICO, IEO, or any token sale, mirroring Bitcoin's organic growth.
As is to be expected, early miners faced minimal competition but were often the most dedicated to the technology.
Early miner donations were used to establish TON Foundation and the TON Reserve, both of which have been crucial for network development.
With the PoW Giver smart contracts depleted, traditional TON mining ended. However, the TonWhales team introduced the Infinity TON Mining Pool, a novel solution for those wishing to continue mining Toncoin.
Learn moreWhat’s next
After its initial coin distribution, TON entered a new stage by adding more validators and increasing the coins used for validation, thereby enhancing the network's stability and security.
As a proof-of-stake blockchain, TON relies on validators operating special nodes to keep the network functioning.
By participating in network operations, validators earn new Toncoin as a reward, with about 0.6% of the total supply created annually. Anyone with a powerful server and sufficient Toncoin for staking can become a validator.
TON Ecosystem includes nominators, enabling token holders to lend their Toncoin to validators for staking and share in the rewards.
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