Telegram leadership may be suspended from managing TON platform: explain how it works

The Telegram Open Network blockchain platform, developed by the founder of the Telegram messenger Pavel Durov, from the first daysattracted increased attention.

The crypto community reacted equally violently toany news about the project: from the first unconfirmed statements and the overwhelming success of the $ 1.7 billion tokensale to the postponement of the launch of the platform and the lawsuit of the US Securities and Exchange Commission (SEC).

Conflict between TON and SEC could be decisive forthe fate of the project: either the company will postpone the launch date for a long time, which, by agreement with investors, will force it to return the invested money to them, or it will face fines from the US authorities and a ban on further attraction of investments. It is possible that the FinCEN financial crime network will be connected to the case.

ForkLog tried to figure out the prospects for launching the platform and how it will work if successful.

TON platform functionality

«TON is an open blockchain with supportsmart contracts, in which any participant can manage their tokens, send and receive them to their address, as well as create smart contracts that allow organizing almost any secure on-chain transactions with tokens in a publicly verifiable way»— Sergey Prilutsky, co-founder of MixBytes, teacher at Moscow Digital School, told ForkLog magazine.

Contracts allow you to manage tokens morein a complicated way than simply transferring from address to address: form invoices for payment for the goods, pay for the goods together with arbitrarily complex commissions (for example, taxes), etc.

«To interact with the platform completelyIt is not necessary to have the Telegram messenger itself, any independent programmer can develop their own version of software for working with TON tokens and contracts, but the success of almost any cryptocurrency is measured in the number of wallets used, and messengers are ideal software for working as cryptocurrency wallets. This is why investors have such hopes for TON»,- Prilutsky points out.

TON Blockchain Architecture

The basis of TON is the single root chain of Masterchain,which stores information about the current version and parameters of the network protocol, about the current set of validators and the size of their steak, about the set of current active child chains (Workchains / Shardchains or shards), as well as hash values ​​of the actual blocks of these chains.

Each shard has its own accounting protocol, its own format for accounts, transactions, its own virtual machine for executing contracts, its own internal currency, etc.

Shardchains Split and Combine

The number of daughter chains is constantly changing independing on the load on them. When the number of transactions addressed to one child chain increases, it is divided in half until the load on it becomes feasible for the validator. Some accounts remain in this shard, while others «move» to the new one.

If there are few transactions, the child chains are combined to make their total number less, and the groups of accounts merge into one.

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Each network validator works with its own setshards (one might say, is their &#171;miner&#187;) - and if the above separation occurs, for example, the shard becomes very popular, it becomes possible to transfer the processing of the second child chain to another validator.

Even if there are a lot of shards, the volumes of data thatthey send to Masterchain, are small - these are hashes and other cryptographic evidence of the correct operation of validators in all child chains. At the same time, the information stored in the main chain is significantly smaller in terms of the volume of the data of the daughter chains, so even a rather slow main chain can serve hundreds and thousands of shards, providing parallel independent execution of a large number of transactions.

&#171;The security of child chains relies onthe main chain, which stores the hashes of the states of all child blockchains. Scaling is achieved due to the fact that validator nodes do not hold all child blockchains, but only part of them, and, producing blocks in them, write information that allows them to verify the accuracy of the data in the main chain.— explains Sergei Prilutsky.

Messaging between Shardchains

The validators of any blockchain do not trust each other by default. In TON, child chain validators use the Masterchain to check if someone cheated on them when delivering messages to other shards.

For example, sending GRAM from an account from shard1 toan account with shard999 means that the shard1 validator after sending the message will wait in Masterchain for proof that the message was received and processed in shard999 by the shard999 validator. Having seen this proof, the shard1 validator can consider the message delivered, the user receives a notification about the success of the transaction.

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The number of shards can be huge, andthe shard1 validator may not know who to send the message to if it is addressed to some very distant shard. In this case, validators &#171;pass&#187; messages to each other in an unchanged form, gradually approaching the desired shard, at each stage charging a commission for the resources spent. This protocol is called Hypercube Routing, and the main requirement for it is that the message cannot be lost.

The messages themselves are also organized in such a way that they cancarry any types of data, the main one of which is the number of &#171;attached&#187; to the GRAM message, which are &#171;removed&#187; from your account balance immediately when generating a message. The message cannot be lost; in extreme cases, the GRAM will be returned back to the user’s balance. At the moment, both splitting and merging have already occurred in the TON test network, so this functionality technically works on small numbers of shards.

Messages and message queue processing,dynamic shard partitioning / merging and the protocol that controls message delivery between shards are the main ideas on which TON's Infinite Sharding Paradigm is based.

Proof-of-Stake Algorithm

To reach consensus in MasterchainThe Proof-of-Stake algorithm is used. By voting, the holders of the GRAM token determine the Top-list of accounts that will receive the right to offer new blocks with messages, receiving a reward for this.

PoS algorithm is used by many networks,for example EOS, but it differs greatly in the functions available to validators and the procedure for finalizing blocks. In such networks, almost any important action on the network, for example, changing some important parameter such as the size of the award or the maximum block size, requires voting and the consent of at least 2/3 of the current validators.

The interaction of the technical side and the TON services

TON Public Proof-of-Stake Network Launcheswork when a group of dozens of network validators is agreed, using the same version of the code, will start their servers (nodes), and will support their work. After that, any company can raise its servers, which are connected to the validator nodes.

&#171;Nodes provide clients with access to the network,This is beneficial for them, and transactions can be sent to the network through any of them, in this the blockchain network is most similar to peer-to-peer networks, for example bitTorrent, where any computer can temporarily become part of the network and turn off at any time. ;,- explains Sergei Prilutsky.

Network operation is supported by hugea network of thousands of computers that are independently located on the network, but the core of the network’s functioning is a core consisting of several dozen validator nodes and a large number of dependent nodes.

Powers of the creators of the platform

In early January, the Telegram team announced that the blockchain platform would be an open, decentralized and non-controlled company:

&#171;The network will be decentralized andpublic. Once it is launched, Telegram will have no obligation to maintain the platform or create any applications for it. Telegram will not be able to control the blockchain and the ecosystem after their launch.

According to Sergei Prilutsky, the TON blockchain canrun by any programmer, the code is open and can be copied. But there is a &#171;main&#187; page with this code on Github, and before the launch of the main network, the TON developers will add a block to this code in which the GRAM balances owned by investors in the agreed quantities will be registered.

&#171;Those who disagree with this&#171;condition&#187; blockchains can launch their own, but it will be a different network. Most users connecting to the network will, of course, prefer to use the real TON network from the developers, rather than from someone who could change the token balances at will. Therefore, the main network of any blockchain is always completely open source + the state of the first (genesis) blocks, which contain the starting balances&#187;,- the expert explained.

The first validators launch their nodes, and GRAM holders get the opportunity on this network to vote for the list of the same validators (1 token = 1 vote).

Thus, the fate of the TON network is not decidedby the development team, and by the votes of token holders, to the extent that they can easily exclude TON itself from the list of validators, generally depriving developers of any control over the network if the number of their voting tokens is greater than that of the TON team. The distribution of tokens can be easily checked at the start of the network.

GRAM Token

Expert recalls until TON core networklaunched, no real GRAM balances exist, and any operations with these tokens currently exist only in the form of mutual promises and obligations of developers to honestly register all token balances in the main chain and allow them to be freely disposed of.

Also, nothing can be said about investmentGRAM potential is a working token of the network, its functions have nothing to do with making a profit, although technically it can play many roles in the TON ecosystem.

In a statement, the Telegram team emphasized that the purchase of GRAM tokens will not mean that their holder owns part of the company and can expect to receive income:

“Gram does not give their holders any special rights, just as holding a euro does not give you a share in the EU.”

Thus, GRAM is not an investment product, but only a means of exchanging value between users in the TON ecosystem.

TON launch prospects amid SEC lawsuit

In general, Sergey Prilutsky positively assessed the probability of launching TON:

&#171;90% from the technical side - the project is alreadyposted publicly, work is underway on the code, in theory, anyone can continue to develop it without TON, and 50% from the legal side - no matter what decision the SEC makes, questions will remain.

The expert emphasizes that considering the functions of GRAM as stocks is a very one-sided position.

&#171;Indeed, it looks like votingshare, but smart contracts easily transform this token into any of dozens of types of algorithmic finance (futures, derivatives, options, stablecoins, etc.), as well as into technical tokens necessary for identification tasks, outsourcing of calculations, storage of critical data& #187;.

According to him, developers are required to considerthe possibility of an increase in the price of the token so as not to get an unworkable economy, for this, many financial terms are used in the documents. The case of the SEC is the audit of algorithms, not the terms in correspondence and documents.

&#171;If the SEC is worried about the integrity of this network -it would be best to see its nodes in the list of validators, so they can have a real right to control part of the network and influence decisions made in it, publicly making money on it without fiddling&#187;,- Prilutsky concluded.