Telegram is an encrypted messaging platform which is planning to launch their blockchain. On top of that, they also plan to launch their native cryptocurrency. It is already a well-known messaging application for cryptocurrencies among the crypto community. Using their platform, they want to create a cryptocurrency that can power payments on it chat application and beyond. Their blockchain will be named as The Telegram Open Network (TON).
It is no surprise that Telegram finally decided to release their blockchain because the world has seen the potential of other cryptocurrencies such as Bitcoin and Ethereum which have set a precedence for the capabilities of the blockchain.
As it is with any other cryptocurrencies, the launch of Telegram’s cryptocurrency will be funded by a presale through an initial coin offering. It is expected that these private presales will gain funding up to hundreds of millions. As Telegram is well known in the cryptocurrency community, the reputation of the platform speaks for itself. As a well established messaging platform, Telegram can craft an ICO at a massive scale.
By adopting a native cryptocurrency, Telegram’s payment system will be free from any centralized government control. In fact, integrating it into the messaging application present a huge opportunity.
Integrating cryptocurrency in Telegram
By integrating payments into Telegram, this will enable the users of the platform to bypass any government restrictions on sending funds through international borders. As the action is highly encrypted, sending money anywhere will not be a problem. In the traditional way of sending money, it will incur high costs, and it requires a few days before the money can be cleared. Without a doubt, Telegram will have good support for its cryptocurrency system because people already have interest in its platform. It’s only natural that Telegram integrates the use of blockchain and introduces a native cryptocurrency.
At the moment, Telegram is considering to raise up to $500 million in their presale ICO. The total valuation for their tokens will range up to $5 billion. Telegram’s ICO will be held in March. For anyone who manages to grab Telegram’s token during the ICO, they can receive it at a discount. Moreover, the presale ICO also targets larger investors instead of retail investors. It is normal for ICOs to raise more money during a presale instead of when it is listed on an exchange because retail investors tend to buy in smaller amounts. By getting more fund upfront, this will inspire confidence for retail investors to purchase the tokens.
Also, it’s not easy to get in on the presale ICO for Telegram. You’re required to put down a minimum of $20 million to buy in if you are outside of the founder’s inner circle. If you are intending to pay using Bitcoin or Ethereum, this ICO will not accept payment in those forms. A good amount of interest has been expressed for Telegram’s ICO. One of the firms which are interested in investing in the mail.ru. Group.
Understanding Telegram Open Network (TON)
This launch will be based entirely on the blockchain. Telegram which has over 180 million users can potentially fuel the mainstream adoption of cryptocurrency. Moreover, it could be possible that Telegram can increase the valuation of the cryptocurrency due to the large user base that they have. According to Telegram’s white paper, the platform’s cryptocurrency will be called “Gram.” Also, it will give you instant mainstream adoption because of the large user base.
The unique feature of this platform is that it may combine both centralized and decentralized structure. Telegram takes into account the fact that decentralized blockchain cannot scale up to the number of users that Telegram has. Centralisation is still key to scaling effectively.
However, decentralization is still important to Telegram because it can create an entire cryptocurrency economy inside the application. Moreover, this can also help them retain more users from Iran that make up 40% of their traffic. Back in the days, Iran users were blocked from using the platform temporarily. As a result, Telegram had to shut down some channels which were used to plot the downfall of the government.
Inspired by WeChat
Telegram’s cryptocurrency is inspired by Wechat that has grown into something more than just a chat application. In China, WeChat is a popular payment mechanism that is widely used for a variety of goods and services. However, Wechat is highly centralised. The difference with WeChat and TON is that the latter will be a decentralized platform that offers higher security and resilience towards attacks.
Inside Telegram’s white paper
Telegram has released in 132 pages white paper which outlines a four-stage smart plan. In the first stage, they will be a platform for third-party services which enables friendly interfaces for decentralized applications. Next, the platform will assign human readable names to accounts. Last, the payment system will be a platform for micro-payments.
To achieve scalability, it will utilize the Infinite Sharding Paradigm. Therefore, the blockchain can automatically split and merge to accommodate any changes in the system. The transaction cost of using the platform will be low because congestion is decreased.
Instant Hypercube Routing will be utilized to maintain the speed. This method utilizes the proof of stake approach. This is a step up from Bitcoin which is using the proof of work approach that takes up a lot of energy to mine. Telegram claims that they will be able to process over 1 million transactions per second.
In the white paper, it also outlines a 4% of the supply of the cryptocurrency will be reserved for the Telegram’s development for a four year vesting period. Also, Telegram plans to keep 52% of these cryptocurrencies private to keep speculative trading on the low. The remaining cryptocurrencies will be sold to the public through a private sale. After the ICO, the cryptocurrencies can be utilized on exchanges or within the app itself. Despite this, there has been some criticism that the founders of the chat application are just trying to make some quick money out of the platform.