1) The biggest ICO of all time might launch for small investors in March 2018. Telegram’s ICO seeks to raise a billion dollars. Silicon Valley and Wall Street investors have already taken the first steps to be a part of it.
2) Telegram, with its more than 200 million monthly users, has the potential to take cryptocurrencies fully mainstream.
3) Telegram’s plans for the creation of a blockchain-based “TON” ecosystem for private messaging, file sharing, anonymous browsing and micro-payments sounds very ambitious. Based on the necessary level of technological sophistication to achieve such a goal, it almost sounds far-fetched. Moreover, launching an ICO and creating the GRAM cryptocurrency might just be an attempt of the founders to generate hype in order to attract more attention and investments.
4) All information is based on a leaked document and rumors; there hasn’t been any official statement from the team of Telegram. There isn’t any official site for Telegram’s ICO yet.
Table of Contents
- 1 Telegram is launching an ICO and a new cryptocurrency
- 2 How did it all start?
- 3 What you should know about Telegram
- 4 Telegram’s whitepaper
- 5 What is TON, the Telegram Open Network
- 6 12 Pros: Why should you invest in Telegram’s ICO
- 7 11 Cons: Why shouldn’t you invest in Telegram’s ICO
- 8 Before you invest – Beware the scammers
- 9 Final thoughts on TON, Telegram’s ICO
Telegram is launching an ICO and a new cryptocurrency
The highly encrypted and anonymized chat app Telegram has become very popular among cryptocurrency traders and also for companies looking to raise money through initial coin offerings (ICO). Just have a look at any website of ICO and check if they have a link to their Telegram channel. Telegram is a necessity for every ICO nowadays.
No cryptocurrency has gained genuine mainstream success – yet. Bitcoin has emerged from the dark web recently and is still opposed by regulators all over the world. Breaking the financial status quo with decentralization takes time. Although many geeks and early adopters have taken their chances and invested into cryptocurrencies, the traditional companies mostly stay out of the crypto-world. Tech companies are interested in the blockchain, and many have taken advantage of it and raised more money from VCs just because they incorporated the word “blockchain” into their name or slogan. Even well-known brands have plans to to create their own digital token. To give an example, Kodak has recently launched the KodakCoin to serve the needs of photographers.
We are still in the early stage of the cryptocurrency era and blockchain development, but Telegram might push the development a lot further. Their team believes that a decentralized counterpart to everyday money is needed today. Moreover, the company has the significant leverage to make it happen.
Telegram is planning to launch a blockchain-based network and platform. It will also issue its own cryptocurrency (GRAM).
The provider of the favorite messaging app is seeking to raise a billion dollars, which might represent the largest crypto token sale to date. Telegram will also probably be the best known company to issue a crypto token yet. To compare the scale, the social messaging app Kik raised only a million USD in an ICO in September 2017.
Rumors of the Telegram’s ICO plan started spreading in the first week in 2018 and on 3rd January the first draft of the upcoming ICO was posted on a Russian Telegram channel run by Fedor Skuratov, CEO of Combot, an analytics platform for the messaging app.
TechCrunch was the first English website to report the ICO plan of Telegram on January 8th, 2018.
Introducing TON: Telegram Open Network
How did it all start?
The ICO space has been on fire since mid-2017 and Telegram recently put down this seemingly crazy idea. It is not just the amount of money to be raised, but primarily the promised scale of the technological upgrade that sounds insane. Some have called it a Musk-type idea – an idea which is brave but at the same time probably impossible. Others only see greed and hype.
The reason people are excited about this ICO is that this may very well be their first serious ICO investment. The Telegram ICO is a comfortable introduction the crypto-economy without taking high risks of investing into unknown players. Telegram is a company with a history going back to 2014 and is trusted by millions of users. That’s leverage that none of the ICOs have ever had before.
One could even speculate about the controversial past of Pavel Durov, the CEO of Telegram.
Setting that aside, however, with 200 million users it is a good idea to build an app that is censorship-resistant and allows for adds-on like decentralized storage, a micropayment system, anonymous browsing, etc.
What you should know about Telegram
Telegram is a messaging app that focuses on the privacy and anonymity of users. It has the most advanced encryption today, and many experts say that none can access the communication. It allows users to have their own secure chat and share not just text messages but also a wide range of attachments.
Telegram doesn’t require users to know each other’s phone numbers to communicate, just a screen name that the user chooses. Telegram is an open-sourced system that works on both phones (Android and iOS) and PCs.
Telegram has already about 200 million users and is attracting half a million more each day.
Telegram is a registered company in the UK as Telegram Messenger LLP. It is owned by two other companies—one in the British Virgin Islands; the other in Belize.
Its data is also copied and spread out over multiple jurisdictions. The reason is simple—to make legal access to user data as difficult as possible.
The FBI has already tried to bribe a developer at Telegram, but without any success.
The company has no legal presence in the United States, and so the FBI had no real authority to demand anything from the company or its founders
Pavel Durov stayed calm and said: “We pay our developers very well. Our developers are all millionaires.”
All the information below is written based on the leaked whitepaper of Telegram’s ICO project, TON. We can assume that at least some part of is legit. But because it hasn’t been published by an official Telegram channel, we also believe that might not yet be completed and some parts might still be missing.
The 23-page-long document provides us with a very ambitious plan to implement blockchain technology and cryptocurrency into the Telegram app. A lot of information is written about Telegram’s roadmap and token status.
Token generation cap: 5,000,000,000 GRAM
Tokens exchange: 1 GRAM =
- 44% ICO
- 4% Team
- 52% Development
What is TON, the Telegram Open Network
The Telegram Open Network (TON) is a fast and secure blockchain and network project.
The TON Blockchain is built as a multi-blockchain Proof-of-Stake system designed to host a new generation of cryptocurrencies and decentralized applications. The architecture consists of a master chain and up to 292 accompanying blockchains.
The slow transaction speed of the Bitcoin or Ethereum blockchain (7 transactions per second for Bitcoin and 15 for Ethereum) is a significant drawback when competing with existing payment processing solutions like VISA or Mastercard. It appears that scaling issues can even divide a community. We have seen many bitcoin forks in 2017/2018 due to the problems with transaction time and costs (e.g., SegWit, SegWit2x, Bitcoin Cash). The relative success of CryptoKitties also revealed scaling issues on Ethereum.
Dr. Nicolai Durov, a co-founder of Telegram, aims to change that with a scalable multi-blockchain architecture. This upgraded technology will give TON the capacity to support millions of transactions per second. By combining minimum time and maximum security, TON might become a VISA/Mastercard alternative for the new decentralized economy. It will be able to process more transactions than VISA or Mastercard.
The Telegram Open Network is not just a decentralized messaging app. The vision of the Durov brothers is to build an ecosystem that provides a safe and private environment for communication and sharing among users. Therefore, the unleaked whitepaper discusses a distributed file-storage service, a proxy service, decentralized apps and smart contracts. It also mentions DNS, micropayments, a decentralized ad exchange and a digital and physical goods marketplace as an integral part of the new Telegram.
12 Pros: Why should you invest in Telegram’s ICO
1) The founder of Wikileaks has endorsed Telegram’s encryption technology, saying there is no better solution for anonymous and private messaging.
2) Durov said the Telegram team is developing a search function that will help weed out extremist content. But private data comes as a priority. No matter what, data will always be “off limits”.
3) The Durov brothers have millions, and they’re not looking for more money. They see Telegram as a “non-profit” that they’ll start to monetize only enough to fund expansion.
The competitors and biggest rivals such as WhatsApp and Skype eventually cashed out, but Pavel Durov said he’ll continue to reject buy-in offers. He said Telegram can’t be bought at any price.
“Even for a billion, it’s not for sale,” he said. “That’s a lifetime guarantee.”
Investors from Silicon Valley gave Telegram billion-dollar valuations. It might be even higher if we consider that Facebook bought WhatsApp in 2014 and paid about per user. That could provide us with a useful benchmark to measure aginst, but it’s not a perfect comparison since Telegram is becoming more of a social media platform than just a messaging app.
4) Pavel Durov has been a part of the cryptocurrency space from the very beginning. He said that he bought into Bitcoin in 2013. Its value, of course, surged from a million to more than a hundred billion dollars in market cap. He’s got enough money to live wherever he wants however he wants to. But as he explains, it’s not about money. He won’t sell his cryptocurrency. The internet tycoon said he’s optimistic about Bitcoin and sees it as “digital gold.”
No wonder he wants to implement cryptocurrency into his lifetime project, Telegram.
5) Durov is a rebel, an anarchist, and a smart entrepreneur. He chose Dubai in part for is its tax-free zone. He said: “A lot of people in the western world don’t realize how much taxes limit their options.”
Telegram is set up as a company that should resist any potential risk from the government or any other institutional body. No doubt flag theory is incorporated Durov’s way of doing business, but the main idea remains strong and the same from the beginning. It is to build an environment for private, anonymous and safe communication and establish a sharing economy. Therefore to accomplish that, today’s companies must become decentralized.
6) The speed of transactions is a crucial issue when starting a decentralized platform for 200 million users. If the Durov brothers don’t fall back on their promises, we might see the first blockchain system that is naturally scalable. Although we often talk about the decentralized economy, actually its still more of a “micro-economy”. Telegram developers might be the ones to take blockchain mainstream.
7) Several major players in Silicon Valley (Benchmark, Sequoia Capital, Kleiner Perkins Caufield & Byers, and the investor Yuri Milner) are expected to invest 1 million dollars each in the Telegram ICO.
- Kleiner Perkins Caufield & Byers is an early backer of Google and Amazon.
- Benchmark backed Uber and Twitter.
- Sequoia Capital is known for early bets on Apple and Google.
8) Peter Thiel (co-founder of PayPal, the first outside investor of Facebook) is also still deciding whether to allocate money to the Telegram ICO (unconfirmed).
9) If Telegram raises such a large amount of money, it will at least have plenty of cash to figure out all the technical challenges.
10) “Many hedge fund managers are talking about the TON ICO,” said BitBull Capital’s Joe DiPasquale. “Telegram has owned the chat space for those in crypto, and our usage of the app is increasing due to its security and ease. It’s become the platform of choice for crypto discussion, and they will have a lot of attention leading into their ICO.”
11) The wow effect can do miracles. Telegram has a unique position, especially in the world of cryptocurrency. There is no doubt that it will spread its message easily. It will be a very catchy topic for the media. But it is not all just marketing (in which they do have an advantage, arguably). The team has more than ten years of experience in building user-friendly interfaces with many advanced features (such as those related to cryptography) for millions of users.
12) Eduard Gurinovich, a Russian entrepreneur and founder of MyTime, said:
“Gram … is declared, essentially, as a new dawn for P2P. This is something that could compete with Bitcoin. Gram has the chance to realize its full potential. This is the winning bid for Gram as a new accounting currency, not an investing one.”
11 Cons: Why shouldn’t you invest in Telegram’s ICO
1) The controversial background of Pavel Durov, the CEO of Telegram. Durov was born in 1984 in the Soviet Union. He became a hero to many Russian millennials when he trolled the FSB (similar to the FBI in the US) for demanding VKontakte (a Facebook social networking clone that became more popular in Russia) user data in 2011. But finally, in 2014, he had to sell the company VKontakte because of the hard push from Putin and the Russian government. He had to flee Russia (like Snowden escaped from the US) and decided to set up another big project. He and his older brother Nikolai invested about 1 million dollars into the development of a new messaging app, Telegram.
Telegram CEO Pavel Durov said at the TechCrunch Disrupt conference in 2015: “Privacy, ultimately, and the right for privacy is more important than our fear of bad things happening, like terrorism.”
“I’m motivated by curiosity,” he said. “It’s super-interesting to see what it’s like to run the most popular social media platform in a country like Iran.”
2) The venture firms Andreessen Horowitz, Union Square Ventures and Bessemer Venture Partners are expected not to invest in the upcoming Telegram ICO. What’s interesting, those firms have been among the most aggressive in the burgeoning cryptocurrency sector so far. The question is what signals do they see?
3) “TON is not a technology bet since the ICO isn’t proposing anything new. It is a user-traction bet,” said one tech enthusiast.
4) The assumption that every Telegram user is interested in using cryptocurrency isn’t valid. We cannot count on 200 million people using GRAM the day Telegram releases it.
5) It is still unclear how venture firms will cash in, even if the project is successful. Durov said that Telegram is like a charity to him and he won’t focus on monetizing. But the investors want their money back one day.
6) Telegram as an app is also popular with terrorists.
UK Prime Minister also publically criticised Telegram, calling it a “home to criminals and terrorists.” The app has a problem with ISIS members using the app to communicate.
According to Techrasa (a market researcher) Telegram accounts for about 40 percent of all Iranian internet traffic. Facebook and Twitter are banned in Iran; officials banned all encrypted voice-calling in the country.
7) Telegram has become a magnet for crypto scammers looking to get rich quick in the crypto market.
The Group PumpKing (more than 14 thousands members) is one of many groups on the messaging app that appear to be dedicated to “pump and dumps” — coordinated buying and selling signals. With such big groups they can move the price of many coins. Other influential Telegram groups include Pump.im, Crypto4Pumps, We Pump, and AltTheWay.
8) “While I was working at Telegram, cryptocurrencies, ICO, blockchain, etc. were never discussed,” said Rozenberg, who left Telegram in April 2017. The idea of creating a blockchain-based architecture behind Telegram and its own cryptocurrency had to forin late 2017, otherwise the plan must have been classified.
9) The Telegram Team says that their blockchain will run cheaply and efficiently at a large scale while remaining decentralized. But no one has explained how they are going to achieve it. Developers in Bitcoin and Ethereum haven’t found the solution for many years. How come Telegram developers are so sure they will succeed?
Telegram’s blockchain may look like a dream for both investors and users, but many experts in the blockchain area remain skeptical until the company clarifies how it intends to solve some big technical and economic challenges.
10) There are no details clarifying how tokens will be distributed, how the network will make decisions or handle disagreements, and how much control the company will maintain over those processes.
Those are very important issues that cut to the heart of what it means to have a decentralized currency.
11) “This is like Elon Musk-level ambition,” Kyle Samani of Multicoin Capital, who looked at the offering, told CoinDesk. In fact, Samani said he declined to invest in the ICO precisely because of its broad scope.
The primer goes into a number of services Telegram would like to build. Telegram has spread out from messaging into file sharing, browsing, and even payments. There are tons of competitors in each area, and we can already see successful startups competing in the market after their VC or ICO fundraising.
TON Storage: A distributed file-storage technology, accessible through the TON P2P Network and available for storing arbitrary files, with torrent-like access technology and smart contracts used to enforce availability. This product is very similar to the Filecoin platform (which raised million in a token sale in September 2017) or Storj and Sia.
TON Proxy: This layer can be used to create decentralized VPN services and blockchain-based TOR alternatives to achieve anonymity and protect online privacy. The service sounds almost the same as the Orchid project.
TON DNS: A service for assigning human-readable names to accounts, smart contracts, services and network nodes. It is a very general area in itself, even if one overlooks that MaidSafe or Blockstact are in the same category of business.
12) Many VCs are concerned that the current digital currency boom is passing them by. The hype in the ICO and cryptocurrency world is a bubble. Everyone knows it but no one wants to miss the opportunity to get rich. Returns on ICOs last year topped 1,000%.
The venture capital firm Mangrove Capital Partners claims that: “If one had blindly invested in every ICO, including the significant number of ICOs that failed, this would have delivered a +13.2x return.”
Many tech businesses are also turning to ICOs as a way to raise money rather than venture capital. Is Telegram one of them?
Before you invest – Beware the scammers
Gramtoken.io was the most prominent fake but now is offline. The site published details extracted from the whitepapers including the project roadmap, team members and more to give a sense of authenticity. The site’s tracker purported to have raised more than a million USD before it went down.
According to a wallet address connected to the website, more than 70 people have invested Ethereum via a fake website called Ton-gram.io.
Final thoughts on TON, Telegram’s ICO
Hundreds of ICOs are launching every day and the domain of cryptocurenncies is overhyped, no doubt. The Telegram ICO might be very different from the previous ones. The combination of a traditional company with a strong user base and the vision of the Durov brothers makes the Telegram ICO on the top of the list of many big investors.
Although there is no official statement, Telegram’s ICO is likely happening; it is not just a rumor. Every piece of the puzzle fits, from Durov’s New Year’s Eve Twitter announcement to the unleaked TON whitepaper and statement of some of the big investor groups about their planned approach.
Even though many speculate about the controversial background of Pavel Durov and his sincerity, pushing encryption, privacy and the app towards a decentralized network and ecosystem seems to be a natural step for Durov to take. If they succeed to deliver the technology, we will witness the widespread adoption of cryptocurrency into the mainstream.
Disclaimer: The information is for educational purposes only and not financial advice. Do your own research before making any investment decisions. We are not responsible for the information on this ICO as there hasn’t been any official statement yet.