In previous articles, we looked at how Telcoin is changing the mobile money landscape in emerging markets by partnering with telecom operators to bring cryptocurrency to the masses, and how they will revolutionize disaster donation funding by delivering funds directly to the hands of those in need.
In this article, we get behind the scenes, taking a look at the technical and operational aspects that make up this dynamic blockchain startup.
Leveraging Telecom Partnerships
Telcoin’s business model rests on very suitable partnerships with telecom companies.
As a mobile cryptocurrency, Telcoin operates with a special focus on emerging markets with the aim to serve countless individuals who are underserved as far as financial services are concerned. Telcoin’s crypto mission capitalizes on a key market segment that has the potential to become a formidable player in the cryptocurrency game as far as numbers go: mobile money users.
These partnerships with telecom companies allow Telcoin to grow their network at a speed that would be difficult and expensive to achieve via organic adoption. Through the provision of turnkey marketing assets for operators and leveraging of networks’ extensive clientele, they’re able to reach users at a much faster and more affordable pace than through a B2C approach.
Additionally, these partnerships increase the trust level of the product, as Telcoin will deploy multi-signature wallets; one key will be held by them, another by the network operator, and the other by the user themselves. This will prevent a tarnished reputation of the Telcoin product in the form of security breaches or criminal movement of large sums of money.
By partnering directly with telecom operators, Telcoin is able to capitalize on existing customer bases that include KYC (Know Your Customer) compliance. This is helpful as KYC compliance, which is increasingly becoming a necessity in cryptocurrency exchanges around the world, typically hinders adoption, particularly in emerging markets.
By addressing the elements of reach, trust and KYC, Telcoin is set to spread widespread adoption of cryptocurrency in these markets.
Partnering with Telcoin also allows telecom operators to expand their revenue models by allowing for an “in” to an industry they might not otherwise have entered, or at least not without great R&D and operational costs.
The Telcoin Exchange API
Telcoin’s mission is to make their product easy to integrate. Through the use of their exchange API, operators are able to integrate the token system into their existing mobile money APIs.
The exchange API will support any mobile network, phone type (both smartphones and feature phones through native SIM, SMS, and USSD features), and wallets. They’ve also partnered with crypto wallet TenX to provide instant turnkey solutions.
The Technical Aspects and Processes Behind Telcoin
Telcoin is a smart contract on Ethereum’s ERC20 token blockchain. While the company will consider creating their own blockchain in future (depending on Ethereum’s future security, scalability and gas price issues), they will, for the moment, leverage on the existing and highly successful Ethereum blockchain technology.
Users are able to register for Telcoin tokens through their mobile money wallets. Authentication takes place via SMS, and Telcoin securely delivers and stores appropriate information. Tokens can be acquired by spending the balance in their mobile money wallets.
Recipients can receive Telcoin tokens as existing users, delivered to their registered Telcoin address. Alternatively, they will be guided to create temporary wallets in order to download tokens into their account via SMS communication using their phone number.
Dormant accounts will automatically cause transactions to bounce back, thus reducing the risk of losing coins in the process. Other security measures include the enforcement of two-factor authentication in cases where the transaction amount is above a certain threshold, in conjunction with other parameters such as location.
Senders can make use of public addresses generated by the ERC20 token that do not necessarily have a phone number linked to them, but in so doing have less protection against losing money to a dormant account or an incorrect address.
Telcoin Use Cases
Telcoin is a mobile cryptocurrency ecosystem. This allows the platform to be employed for a variety of use cases. Some use cases are already apparent, and others yet to-be-determined will emerge during the lifetime of the product, in keeping with an evolving industry and market.
The top 4 use cases that Telcoin has already set its sights on are:
- Remittance facilitation
- Cryptocurrency adoption and access
- Roaming spending
- International aid
Cryptocurrency adoption will come as a direct result of the company’s telecom partnerships, but the incentives of having access to a mobile cryptocurrency wallet will also be a driver. The mobile wallet will incentivize users to adopt participating networks and, consequently, cryptocurrency as a vehicle of monetary value-delivery.
Possible future applications include:
- International spending for tourists and travelers working with local currencies outside of their country’s borders
- International aid in the form of geo-fenced airdrops directly into the mobile phones of every individual directly affected by a disaster.
Their first priority, however, will be focused on remittances, a US$5 billion market.
First Priority: Remittances
The confluence of remittances and mobile payments is what makes Telcoin such a promising product. Mobile money operators, although they possess the network and infrastructure, have not moved to dominate this market. In fact, less than 1 percent of remittance transactions globally are currently facilitated by mobile money operators.
By stepping in as a middleman, Telcoin affords telecoms the opportunity to profit from this booming industry without the need for expensive, time-consuming and complex set-up. Instead, telecoms are able to directly add to their profit margins an entirely new income segment that elegantly integrates into their mobile wallet product.
Telcoin will charge a transaction fee of 0.5 percent when conversions are made between Telcoin tokens and mobile money in local currencies. Ethereum’s gas fee, currently sitting at roughly US $0.25 per transaction, will also be added to the total cost.
In their whitepaper, Telcoin illustrates the average costs of remittances:
For a US$200 remittance, a user would only pay a $2.25 fee, or 1.125%, significantly less than the global average cost of remittances which stands at 7.42%.
Not only will Telcoin’s transaction fees be significantly lower, the process will also be smoother and more straightforward.
Token Issuance Model
Telcoin partnerships will very often kick off with a PoC (Proof-of-Concept) that could take the form of an exchange, remittance, or roaming demonstration.
Telecom companies act as Telcoin exchanges between Telcoin and end-users. Once a telecom company signs up as a partner, Telcoin makes use of a tiered issuance model for allocating tokens to the operator.
Since Telcoin does not deploy mining operations, GSM Association Full Member mobile network operators and their virtual network partners (MVNOs) will be the only ones with the right to be issued Telcoin tokens.
Telecom companies will be incentivized in the form of tokens, based on a model that consists of the following integration stages:
An in-depth breakdown of this model is available in the Telcoin whitepaper.
The Telcoin ICO
Telcoin’s ICO, which runs from 11 December 2017 to 11 February 2018 (or until the fulfillment of a US$25 million hard cap), will see the exchange of 25 percent of the total US$100 billion token value.
While US$100 billion is substantially larger than the total token supply of many other cryptocurrencies, the decimal value will go only up to a total of 0.01 Telcoin, which makes it easier to work with in the mobile money sector, from a user’s perspective.
During the ICO, 22 percent will be available for sale to investors and the additional 3 percent will be allocated to a bonus pool to reward early investors, particularly those who invested during the pre-ICO or invested a substantial amount.
Telcoin can be purchased using Ethereum, Bitcoin, or TenX tokens.
Visit https://www.telco.in/ico/ to learn more. For a more detailed look at the Telcoin business model, the company’s whitepaper is a comprehensive document detailing their business model and ecosystem. You can also join Telcoin’s Telegram group and follow them on Twitter.