Telegram Plans Billion Dollar ICO to Build Massive New Blockchain Platform
Telegram, an instant messaging and discussion group app, is reportedly planning an ICO for an ambitious new blockchain-based platform with an in-app token called “gram”. If it goes ahead, the offering would stand out from others due to Telegram’s massive worldwide user base, reported to be in the hundreds of millions.
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Ambitious Plan for an Entirely New Economy
Telegram is apparently planning to use its clout to create an entire new economy. A Telegram Wallet is planned for the end of 2018, with wider features rolling out throughout 2019.
TechCrunch reported today that Telegram is building an entire blockchain ecosystem it called the “Telegram Open Network” (TON), a “third-generation blockchain” platform, and plans to fund development by raising up to $500 million USD initially, possibly into the billions.
If it achieves that goal it would be by far the largest ICO raise ever, eclipsing even 2017’s token-buying madness. Telegram would offer 44 percent of the available gram tokens for sale, keep four percent for its development team, and keep the remaining 52 percent “to protect it from speculative trading” (not that the latter tactic has stopped that happening to Ripple’s XRP).
TON would use the gram token as its own native currency, presumably allowing users to hold and send it within the platform and its apps easily. Telegram also wants its platform to have the ability to scale easily as its user base grows, and handle a million transactions per second.
Telegram’s TON White Paper Details
TechCrunch described Telegram’s 132-page white paper for the TON project, revealing several blockchain-based proposals beyond just value transfer.
They include “TON Services”, an interface available for anyone to develop decentralized apps (DApps) and smart contracts; “TON DNS” to assign names to those services similar to web domains, and “TON Payments” for secure micropayments off-blockchain.
Telegram claimed it has scalability firmly in mind in its platform design. Its base, called “TON Blockchain” would consist of a main chain and several interconnected blockchains similar to Blockstream’s “sidechains” concept. Something it called “Instant Hypercube Routing” would maintain network speeds.
The main blockchain would use a proof-of-stake allocation system (as opposed to Bitcoin’s proof-of-work mining)
Like Telegram itself, the platform could overcome doubts about its technology simply by being easy to use and stable. The messaging app has faced criticism over the years that its encryption isn’t as secure as it claims, but is popular regardless for its ease of use and seamless synchronizing between multiple desktop and mobile platforms — something other popular chat apps still struggle with.
Motives for Building a Decentralized Blockchain Platform
Telegram’s creator, Russian Pavel Durov, is reportedly keen to build communications systems more resistant to government and regulatory pressure. Durov and his brother Nikolai also created the popular (in Russia) VK social network, but were eventually forced to hand over control to investors with government connections.
Telegram was built to feature native encryption to fight censorship and protect users’ identities. However it requires a mobile phone number to create an account, and the level of protection its encryption offers is uncertain.
The app was also recently blocked in Iran during recent protests. Russia has also previously put pressure on the company to reveal more about its users’ identities, though Telegram claims to have resisted this.
A more decentralized, blockchain-based platform would counter some of this external pressure — at least in theory. Even open and decentralized blockchains like Bitcoin still face heavy regulation at on- and off-ramps, such as fiat currency exchanges.
Durov, like Bitcoin’s Roger Ver, eventually traded in his birth citizenship for one in St. Kitts and Nevis.
Previous Attempts to Integrate Payments and Chat
There are a few other examples of chat app platforms integrating value transfers, with varying results. Those that failed usually did so due to lack of users, something Telegram isn’t worried about. It claims to have up to 180 million individual accounts.
A few years back, a project called Gems attempted something similar — cloning Telegram itself and introducing a native crypto-token that users could use as spending money within the app, and earn by having strangers pay to send them a message. It may have been ahead of its time, as Gems was never able to achieve the network effect it needed.
Another startup and app called Gliph also looked promising by supporting bitcoin wallets and easy sending back in 2013, but suffered a similar fate.
In China, WeChat users can connect their accounts to regular bank accounts, using the app to make fiat currency payments. Though the functionality is wildly popular, it suffers from the same limitations as any involving “real” money — centralization, regulation, and identity requirements.
If Telegram succeeds even at integrating easy payments, it could be a major force in the crypto-economy. The wider blockchain platform has a lot more to prove technologically, but many will be watching its development closely.
What do you think of Telegram’s plans? Let’s hear your thoughts in the comments.
Images via Telegram, Wikimedia Commons