🪙 Payment Network: What Is It and Why Is It Needed?

⚫️ Last week, we discussed TON Core's plans for 2025, where Payment Network is mentioned as one of the points. What is this technology, and why is it needed? This point deserves a separate explanatory post: if it's being worked on extensively for 2025, let's explain it in more detail.

⚫️ The commissions in the TON blockchain are not well-suited for microtransactions. If you're sending thousands of dollars, the commission is barely noticeable. However, if you and your friend decide to play chess and wager a symbolic 0.01 Toncoin, the same commission becomes significant compared to the transaction amount. If you play frequently, the total commissions you pay could add up significantly, while the prize just moves back and forth. People dislike such situations.

⚫️ The basic idea of the Payment Network is as follows. Imagine you and your friend deposit into a special smart contract a "prize fund," owned equally by both of you. After each chess game, you record that the winner now owns 0.01 Toncoin more, and the loser owns less. This way, you don't have to move funds on the blockchain, incurring commissions each time. You only encounter them when withdrawing money from the "fund."

💡 You could say that you and your friend have created a "payment channel." This principle can be applied not just to two participants. The idea is to build an entire network of channels "on top" of the primary blockchain. In this network, a variety of participants can transfer funds almost instantly and almost for free.

⚫️ In Bitcoin, a similar concept has long been realized under the name Lightning Network. In the TON whitepaper, it was described as TON Payments, and it is now being implemented as Payment Network.

⚫️ Theoretically, this could be useful for different TON projects: from games to the distributed storage TON Storage (where you could provide storage space for others' files for money, and even charge for each individual kilobyte with microtransactions). For some scenarios like trading, what's more important is not even the commissions but the high speed of operations.

⚫️ But practically, only time will tell. The roadmap for 2025 does not specify the release dates for the Payments Network. However, it mentions that there is already a "beta version": a working prototype that still needs testing and auditing. This prototype currently works only with Toncoin, but later plans include adding support for Jettons and swaps.

@thedailyton