Are you looking for an amazing opportunity to invest early in a foundational platform for communication and commerce? The Telegram ICO might be right up your alley. Perhaps you have heard about a cloud-based instant messaging service called Telegram? Founded by Russian entrepreneur Pavel Durov, it is an encrypted chat platform with 200 million users. Many communities use it as an internal social network — crypto investors, for example, use it to host group chats about various currencies. It is the platform of choice for people involved in cryptocurrencies. Crypto companies use it to launch project token sales and ICOs, gather followers and keep them up to date on their projects, and coordinate developer efforts. The Telegram Open Network (TON) cryptocurrency created by Telegram, will be closely integrated with the chat application, in an attempt to provide solutions for file storage, payments, and anonymous browsing.
Telegram ICO Purpose
The Telegram ICO has been in the news lately thanks to the fact that it is on track to be the biggest initial coin offering ever.
Telegram wants to leverage its existing user base to create a solution for cryptocurrency payments. So far, cryptocurrencies have reached initial adoption with users who are primarily interested in investing/speculation. Telegram wants to create a cryptocurrency that is used functionally for payments.
Telegram is uniquely positioned to establish the first mass-market cryptocurrency. It will use its expertise in encrypted distributed data storage to create TON, a fast and inherently scalable multi-blockchain architecture. TON can be regarded as a decentralized supercomputer and value transfer system.
The Telegram Team will rely on its 10-year experience in building user-friendly interfaces for tens of millions to create light wallets, exchanges, and identification services that will allow users to get on board with cryptocurrencies in an intuitive way. Integrated into TG applications, the TON wallet will become the world’s most adopted cryptocurrency wallet. Telegram will leverage its existing ecosystem of communities, developers, publishers, payment providers, and merchants to drive demand and value for TON cryptocurrency. A whole new economy saturated with goods and services sold for cryptocurrency will be born.
The overall aim is to make the TON token a true mass-market currency. To this end, it is designed to be a simple-to-use currency that anyone can use to pay for a wide variety of goods and services.
The TON Light wallet will allow users to store their coins, in order to make micro-payments to other users.
After the project is complete and fully operational, TON is planned to support most of the biggest challenges many blockchain projects are working on:
- TON Storage is a distributed file storage system with the torrent-like access technology and smart contracts.
- TON DNS is a proxy service for creating decentralized VPN services and TOR-like secure browsing environments based on the blockchain. TON DNS is a service for assigning human-readable names to accounts, smart contracts, services, and network nodes. With TON DNS, accessing decentralized services can be similar to viewing a website on the World Wide Web.
- TON Services for decentralized apps, smart contracts and decentralized web browsing experiences. Telegram will provide a list of the most popular apps as well as recommendations based on a user’s history.
- TON Payments for micropayments and peer-to-peer transactions. This is where Telegram wants to solve speed and scalability issues that other cryptocurrencies experience.
Apart from being used for buying physical and digital assets within Telegram, TON coins are meant to perform any of the following tasks.
- These tokens can be used as a commission given to all TON nodes for processing smart contracts and transactions.
- A token can be used as capital given to the nodes so that they can be eligible for validating different transactions and generating new coins and blocks.
- The tokens can even be used as a payment given to TON Proxy for hiding user identities.
What is GRAM?
The TON Blockchain will support up to 232 different basic coins (each of which can have several additional tokens as well). The fundamental TON coin will be called Gram (Gram token). Telegram will offer streamlined interfaces for TON transactions and TON’s primary integration will be with the TG Messenger. Telegram’s existing ecosystem will offer simple ways of buying and spending Grams via its Bot Platform and a TON-based ad exchange, allowing for trade in cryptocurrencies, paid promotional advertising, paid content and subscription services, virtual storefronts, etc.
Telegram will also offer a searchable registry of available decentralized services, with lists and recommendations, similar to Google Play / App Store. Grams will also be used as gas paid to validator nodes, stakes deposited by validators, capital lent out to validators, voting power on protocol parameters, as well as payment for use of TON platform components and services (unless these are rendered free by the application owners). In addition, Telegram aims to provide users with a secure universal ID via registration on its platform.
Token generation cap
5,000,000,000 GRAM
Tokens exchange
1 GRAM = 0.1000 USD
Token distribution
44% ICO
4% Team
52% Development
TON Roadmap
According to the Telegram TON white paper: “Integrated into Telegram applications, the TON-Telegram wallet will instantly become the world’s most adopted cryptocurrency wallet”.
There is not much information available on this subject matter, but so far we can outline the following:
- December 2017: there was the first mention of Telegram working on their own blockchain platform TON including a native cryptocurrency called Gram.
- February 2018: Pavel Durov formed the TON Issuer Inc. and raised $850 million from 81 investors.
- April 2018: it has been reported, that Telegram raised another $850 million from 94 investors.
Telegram will use its expertise in encrypted distributed data storage to create TON, a fast and inherently scalable multi-blockchain architecture. TON can be regarded as a decentralized supercomputer and value transfer system. By combining minimum transaction time with maximum security, TON can become a VISA/MasterCard alternative for the new decentralized economy.
The idea is that the TON tokens can also be used to pay commissions to validators, as stakes for validation, and as payment for proxy services among other things.
However, it is the possibility of this token becoming a mainstream payment method that has made it such a newsworthy ICO. It is classed as a third generation blockchain solution, with the prospect of more impressive scaling and transaction handling that can currently be achieved with Bitcoin or Ethereum.
TON Blockchain will be a flexible multi-blockchain platform, capable of processing millions of transactions per second, with Turing-complete smart contracts, upgradable formal blockchain specifications, multi-cryptocurrency value transfer, support for micropayment channels and off-chain payment networks. It could evolve into what the team describes as a “truly mass-market cryptocurrency,” replacing traditional payment methods in a way that other digital currencies can’t.
Telegram ICO Team
It is always interesting to know who is in charge of the new startup. The brothers Dr. Nikolai Durov and Pavel Durov are the heads behind TON with an excellent track record in programming. Pavel is extremely popular in the post-Soviet countries like Russia, Ukraine, Belarus as he was the one who launched VK website (a Russian clone of Facebook) in 2006. VK was later acquired by Mail.RU in 2014 in a deal that valued the company at ~$3B. It’s rare to find a team in consumer technology that has experience building and scaling another successful consumer platform, and speaks well to the founders’ ability to navigate obstacles and capitalize on opportunities.
Using his payout from VK, he left Russia to start a new life and a new project. Durov focused on the completely self-funded Telegram.
Pavel’s brother, Nikolai Durov is the technical brain behind the Telegram and TON. He was the lead developer at VK and since 2013 the CTO at Telegram for which he developed the MTProto protocol. Nikolai is regarded as a mathematical and programming genius.
According to the whitepaper: “The company has a world-class team of 15 developers that were selected from thousands of contenders over the last ten years. To become a part of the team, each of its current members had either to win in the world’s top programming contests or to take the first place in one of the nationwide multi-level coding competitions held by the founder of Telegram.”
Furthermore, it claims that the core team members all worked before at VK, and that all networking, cryptographic, and database engine software running on Telegram servers is custom-built by these developers. Sounds impressive, doesn’t it?
ICO Launch Date
Launching in 2018, this cryptocurrency will be based on a multi-blockchain Proof-of-Stake system — TON (Telegram Open Network, after 2021 The Open Network) — designed to host a new generation of cryptocurrencies and decentralized applications.
Telegram’s vision is to build the TON, a blockchain-based platform that extends its messaging app into a range of services that will include payments, file storage, censorship-proof browsing, and decentralized apps hosted on the platform. According to the original whitepaper, the plan was to raise $1.2 billion using both invite-only private investors and an open sale to the public.
Telegram canceled the ICO public presale right after it extended the raise to $1.7 billion. That’s almost certainly because it had already raised enough money to develop TON without the risk of running into the SEC’s ongoing ICO probe by soliciting money from the public.
Others say that Telegram is aware of the unofficial sales but, since they do not violate any laws — because ICOs are not regulated — there is nothing that it can do but watch. The issue with the pre-ICO sales is that the market can influence, or even set, the price of a token through unofficial deals that could complicate listing it on exchanges or setting a post-ICO price.
The result is that ordinary people can’t buy Telegram’s Gram crypto token until it is released on exchanges. There’s currently no timeline for that. But, with massive demand for the messaging app and deep discounts for early backers, a secondary market for buying and selling tokens early has emerged.
Nevertheless, it would help if Telegram shared some insight into when and where this sale will be launched, since crypto enthusiasts keep getting bilked out of money by Telegram-focused phishing attacks.
How to Buy Telegram Coin?
It is not clear if Telegram will offer any of its 5 billion Grams to the public during their ICO. Looking at the successful private sale so far it would be no wonder if TG sticks to this proven approach. Raising money from the public would be much more work as Telegram would have to go through a know-your-customer and anti-money laundering verification process with every investor.
One point of criticism regarding the Token Sale is focused on the huge discounts which Telegram apparently granted to early investors. Reports are circulating that some discounts exceed 70 percent of the final token price which is already driving early investors to sell their tokens to cash in.
The TON Foundation wants to keep more than half of the tokens in their possession. In the Whitepaper it says, that “… at least 52 percent of the entire supply will be retained by the TON Reserve to protect the nascent cryptocurrency from speculative trading and to maintain flexibility at the early stages of the evolution of the system”.
Telegram will reserve 4 percent for the developer team and the remaining 44 percent can be sold to investors. With a current team of 15 developers and final public sale price targeted at $0.97 (according to the prospectus), this would be nearly $13 million for each member over the whole vesting period.
Beware Telegram ICO SCAMs!
While there has been little official word about when the Telegram ICO will occur, it has led to a lot of speculation about what this ICO will be all about , its chances of success, as well as scams.
The Telegram team hasn’t actually announced their ICO date, but sites are cropping up all over the Internet pretending to be them and asking for you to send money or offering airdrops. And the scammers are getting really creative by adding the familiar trappings of ICOs such as countdown timers, percentage sales bars, pre-ICOs, referral bonuses, white papers, roadmap, pictures of the actual team while other scammers were seen running sponsored Facebook ads.
But how can one protect himself from all the fraud on the internet? Here are a few tips:
- Telegram founder Pavel Durov said: “Telegram publishes its official announcements only at telegram.org. Everything else is most likely scam”
- Check URLs in Whois.com. If it appears that the website was registered with “namecheap.com” with privacy protection on, 99% it’s a scam.
- You can also install the EtherAddressLookup plug-in for Chrome.
Pros & Cons
| № | Advantages | Disadvantages |
| 1. | Telegram has a perfect starting position for testing its new decentralized services in an already existing ecosystem with 200 million users. | Telegram will reportedly raise $2.6B through token sales — a significant amount of funding to raise in an extremely short period of time. Critics have questioned whether this amount of money is necessary. |
| 2. | TG users will not have to go through a complicated process opening a new wallet and learning how to buy, store, and send their coins. Instead, the TON-Telegram wallet will instantly become their wallet within an environment users already know and feel comfortable with. | Some crypto experts, including the team at Pantera Capital, have questioned whether the platform will be successfully developed, and argue that the white paper is too vague in explaining the underlying tech. |
| 3. | Global cryptocurrency community. Telegram is already the most used messaging app with 84 percent of blockchain-based projects having an active TG community. | Telegram reportedly spent $70M last year on server expenses, user verification, security, and employee salaries and plans to spend $620M in the next four years. If Telegram isn’t able to start generating revenue and spending continues to increase, the company could eventually risk bankruptcy or be forced to raise additional capital for unfavorable terms. |
| 4. | The Telegram team argues that TON will be used for real transactions, allowing micropayments between users (and businesses) worldwide. | The structure of a token sale is fundamentally different than a traditional venture investment — investors will not receive equity in the company, won’t take board seats, and won’t have the control rights that they typically receive. Investors must therefore feel confident enough about the team and vision to give up many of the provisions that protect them from bad actors and ill-advised decisions. |
| 5. | The Durovs brothers, founders of Telegram, are experienced entrepreneurs and programmers. Their previous project VKontakte (VK) became Russia’s largest social network. And it was sold for ~$3B. It’s rare to find a team in consumer technology that has experience building and scaling another successful consumer platform. | The Telegram founders have twice demonstrated an impressive ability to build and scale a social/messaging platform. However, they don’t have experience building blockchain platforms and haven’t yet hired any high-profile blockchain developers to lead the charge. |
| 6. | Telegram investors will receive tokens in December 2018. Depending on the round in which the tokens were purchased, investors will be subject to a lock-up period that will reportedly range from 3–18 months. Even at the longest end of this range, investors will have the opportunity to liquidate their stake significantly earlier than a normal venture investment. |
Conclusions
Telegram proposed an impressive plan on how to establish the first mass-market cryptocurrency and build a whole decentralized ecosystem around their messaging app. And its ICO was supposed to be a record-breaker to develop a platform that brings the decentralized internet to life. Instead, it has become a tightly controlled mess.
In addition, the existing team of 15 people seems pretty small for such a huge project, and competitors in the crypto space have much more experience working with blockchain technologies, consensus mechanisms and scalability.
However, Telegram plans to launch its wallet by the end of 2018. Implementation of TON Services, TON Storage, and TON Proxy is scheduled for early 2019. By 2021, Telegram plans to step back and rename TON to ON with the network managed by its foundation.
For now, it appears likely that this could become a very successful ICO, but it is still too early to be completely confident about how good this investment will be in the long term.