Telegram Seeks to Decentralize Web Communication With $1.2 Billion ICO for New Cryptocurrency, TON
Dubai-based Telegram is a cloud-based instant messaging service (IMS). It is positioned as an alternative to popular IMS WhatsApp (which was acquired by Facebook for US$19 billion), with a special focus on security and speed.
In the crypto world, Telegram is a popular site. Many blockchain startups host their ICO and community chats on the medium, having moved away from once-popular apps like Rocket Chat and Discord.
Telegram has arguably seen more active blockchain activity on the entire internet, save for Reddit and Bitcointalk.
Take a look at the Telegram account of your average – albeit serious – crypto investor, and you’re bound to find at least half a dozen startup groups in the blockchain space.
A survey in popular Facebook community Crypto Coin Trader shows that, on average, traders are part of at least 6-10 groups. I, myself, am part of 16 groups.
Thus, it’s no wonder that the company would come up with an idea to be more than just a blockchain middleman.
On December 22, 2017, a Russian YouTube channel published a promo video for Telegram’s blockchain solution, TON.
Despite the app’s 180 million active users, to date, only 11,000 people have watched the promo video. This is after the news of Telegram’s proposed cryptocurrency started doing the rounds on the net.
What’s the (Crypto) Deal?
On January 8, 2018, TechCrunch published an article revealing TON (Telegram Open Network) to the public at large. The story was quickly picked up by other news outlets, and the story started taking shape.
Telegram co-founder and CEO Pavel Durov is also the creator of popular Russian social media app VK, Russia’s version of Facebook. He was forced into an unceremonious exit from VK amidst speculation of government involvement when he refused to release personal data of select VK users requested by the Russian state. In the process, he cashed out with far less than was owed him.
Now, with the proposed launch of TON, he’ll be cashing in on profit once lost. TON is set to be the highest-grossing ICO of all time, irrespective of price, based solely on the magnitude of Telegram’s existing user base.
According to Alexey Ivanov, founder of Polynom Crypto Capital:
This is a very lucrative proposal. Some terms [of the deal] may stop us from investing, but we are sure Telegram will be successful at it and you could see a return of more than five times the ICO price.
Understanding TON: What Is It All About?
In a nutshell, TON will be a blockchain-driven payment system. But in order to understand TON, you have to understand WeChat.
Now, unless you’ve spent time in China, or have friends there that you communicate with, you have very little reason to use this app. “Just another” chat app, after all, right? Dead wrong.
In China, WeChat isn’t just the alternative to Facebook and WhatsApp rolled into one. WeChat is also a digital wallet. With WeChat Pay, there’s no need to carry a wallet with you. Through the app, you can pay for just about anything, because a merchant wouldn’t be a merchant without a WeChat account themselves.
Naturally, as Telegram is a social messaging app, TON will include that function. By bringing a payments ecosystem on board, it effectively brings the concept of WeChat to the global market. This will be a game changer for microtransactions, money transfers, and remittance.
This is a great idea. But let’s face it: so are many other of the countless ideas being built by blockchain startups. What sets this apart is that it is Telegram – not a no-name business being built by an unknown founder, but a company with a proven track record twice over, and a CEO who has built two of the biggest social media apps this century.
Are you starting to see the value, yet?
TON Whitepaper. Status: Leaked
As reported by The Next Web, the TON whitepaper was first leaked by website Cryptovest, giving the market an insider look into what Telegram is planning for TON.
The whitepaper’s problem statement states:
Bitcoin has established itself as the «digital gold», and Ethereum has proved to be an efficient platform for token crowd sales. However, there is no current standard cryptocurrency used for the regular exchange of value in the daily lives of ordinary people. The blockchain ecosystem needs a decentralized counterpart to everyday money — a truly mass-market cryptocurrency. Despite their revolutionary potential, existing cryptocurrencies lack the qualities required to attract the mass consumer.
And with a opening like this, Telegram is all too aware of the value its user base holds:
This paper outlines a vision for a new cryptocurrency and an ecosystem capable of meeting the needs of hundreds of millions of consumers, including 200 million Telegram users.
Taking a Look Inside the TON Whitepaper
TON has been designed with mass adoption in mind. They’re riding the early adopter crypto wave, building on the foundation paved by Bitcoin and Ethereum.
But there is one key differentiator: unlike these blockchain platforms and most blockchain startups, the Telegram platform has already reached mass user adoption. With TON, they’ll merely be bringing crypto to their users.
In designing TON, the criteria was threefold. The tech should possess:
- Speed and scalability: hundreds of millions of transactions should serve their hundreds of millions of users.
- Intuitive user interfaces: to the average user, utilizing TON should be as easy as operating the smartphone that Telegram is installed on if they’re going to use it to buy, store, and transfer value.
- An engaged user base: this they should have in droves, not only amongst the 1 percent of the world population already invested in crypto, but thanks to their substantial existing customer base.
And this is exactly what they’ve set out to build.
In the sections to follow, we’ll look at some of the points highlighted in the whitepaper.
The TON Timeline
As illustrated in the TON whitepaper, development started as early as Q2 2017, and the testnet will be launched in Q2 2018, with a mainnet version launched in Q4 2018. All currently proposed features will be added by Q2 2019.
TON: A Breakdown
The TON Blockchain
The TON blockchain allows for hundreds of millions of transactions to take place every second. If you’ve had the displeasure transacting with bitcoin lately, you’ll truly appreciate this ability. (To feel everyone’s pain, take a minute and see the number of unconfirmed bitcoin transactions rise by the second.)
What allows TON to process transactions at such lightning speed, is the following design choices:
- Infinite sharding paradigm
- Instant hypercube routing
- Proof-of-stake approach
- 2-D distributed ledgers
To learn more about each of these, take a look at the whitepaper.
The TON Platform
The following components will steadily be added to the TON network. They will all be integrated with third-party messaging and social networking applications.
- distributed file-storage technology
- accessible through the TON P2P Network
- available for storing arbitrary files
- torrent-like access technology
- smart contracts used to enforce availability
- enables storage services akin to a distributed Dropbox
- paves the way for more complex decentralized apps that require storing large amounts of data, such as Youtube or Telegram
- network proxy/anonymizer layer used to hide the identity and IP addresses of TON nodes
- similar to I2P (Invisible Internet Project)
- this layer can be used to create
- decentralized VPN services and blockchain-based TOR alternatives to achieve anonymity and protect online privacy
- in conjunction with the TON P2P Network and TON DNS, TON Proxy can make any service, including Telegram, effectively immune to censorship
- provides a platform for third-party services of any kind that enables smartphone-like friendly interfaces for decentralized apps and smart contracts
- allows for a World Wide Web-like decentralized browsing experience
- a service for assigning human-readable names to accounts, smart contracts, services, and network nodes
- accessing decentralized services can be similar to viewing a website on the World Wide Web.
- a platform for micropayments and a micropayment channel network
- can be used for instant off-chain value transfers between users, bots, and other services
- safeguards built into the system ensure that these transfers are as secure as on-chain transactions
By integrating TON into Telegram, the company will offer its users the best of both worlds: access to and engagement with cryptocurrencies right in their favorite messaging app.
Here are some of its defining features.
- TON architecture supports light clients that can run on mobile devices without consuming significant resources
- TON light wallets will be built into Telegram applications, allowing millions of users to store their funds securely in the TON blockchain
- wallet owners will be the sole holders of the corresponding encryption keys.
- Bot platform to exchange cryptocurrencies
- TON-based ad exchange on groups and channels
- Digital content and physical goods marketplace
- Searchable registry of decentralized services
The release of TON might just be a major game changer in the attempt to bring cryptocurrency to the mainstream. Will 2018 be the year that marks the mass adoption of blockchain technology by a majority of households in China?
While it’s available in its current form, take a look at a copy of the TON whitepaper.
What do you think about TON? Let us know in the comments.