In December last year, the creator of Telegram Pavel Durov said in an interview with Bloomberg that his service, which is free for users, could start earning as early as 2018. Around the same time, a presentation of a blockchain project allegedly developed by Telegram appeared on YouTube, and earlier this year, the TechCrunch portal, citing its own sources, reported that Telegram plans to launch its own blockchain platform called Telegram Open Network (TON), as well as the Gram cryptocurrency. . Finally, on January 15, several Telegram channels dedicated to the activities of the messenger began to distribute a 132-page document with a technical description of such a project, signed by Nikolai Durov, Telegram CTO and brother of Pavel Durov.
The Durovs do not officially confirm the authenticity of this memorandum. In response to relevant questions, Pavel Durov only refers to a message on his Twitter account and Telegram News channel, which indicated that Telegram publishes official messages on the telegram.org website. “If you see other sites that claim to publish news or announcements on behalf of our team, it is most likely a fake,” the post noted.
So far, no messages regarding TON or Gram have appeared on the official website of the messenger. However, a RBC source close to the project participants and several experts from companies specializing in ICOs and cryptocurrencies confirmed the authenticity of the memorandum on TON. RBC analyzed this document and figured out how Telegram intends to attract investment.
Why do we need a new blockchain and how will it differ from others?
As stated in the memorandum, the disadvantage of the vast majority of existing blockchains is the low speed of transactions compared to operations that can be carried out through international payment systems. Experts confirm this. “One of the main problems with new financial technologies, of which Bitcoin and other cryptocurrencies are the most common example, is that the average throughput is still at the level of nine transactions per second, while centralized payment systems such as Visa and MasterCard, on average, process 7 thousand transactions per second only in the USA, and at peak loads – 40 thousand transactions per second. This currently hinders the widespread use of cryptocurrencies,” says Alexander Garkusha, co-founder of ModernToken consulting company.
The TON blockchain, according to the memorandum, intends to confirm millions of transactions per second.
According to Alexander Borodich, the founder of the Universa blockchain, there are already enough blockchain platforms in the world, in which the speed is noticeably higher than that of Bitcoin and Ethereum. “In Russia, this is both Waves Platform and Universa Blockchain. In general, the high performance of blockchain platforms is one of the main competitive advantages in solving, in particular, financial tasks. The high speed of TON can provide it with leadership in working with the current user base of the Telegram messenger, for which the transition to new technologies will be almost imperceptible. It is this advantage that can allow TON to occupy its niche in the blockchain platform market,” Borodich believes.
How will such a speed of TON work be achieved?
TON will be based on a multi-level blockchain technology.
The essence of the traditional blockchain technology, which is used to operate the Bitcoin and Ethereum payment systems, is to create a decentralized electronic system of relations, in which each next transaction stores information about the previous ones, that is, they are interconnected like links in one chain. Each link is called a block and cannot be changed or removed from the system without destroying the entire chain.
The multi-level platform that Telegram intends to create will be different in that instead of new blocks, there will be new blockchains in the chain. Thus, the entire array of operations that the blockchain has to process will be divided among smaller chains. According to the independent ICO consultant Philip Egorov, due to this, it is planned to achieve the declared throughput of millions of transactions per second. “TON is not the first multi-level blockchain, but its fragmentation is larger than the average for similar projects,” he explains. “The tasks are distributed to different chains of blocks, each of which will solve certain tasks within the overall system.”
“Hypothetically, the transfer of transaction confirmation to various blockchains will allow distributing the load from the entire network to its individual parts,” agrees Dmitry Matsuk, founder of the Blockchain.ru group of companies.
In addition, the creators of TON want to avoid one of the problems of modern blockchain platforms – the fork of cryptocurrencies (the so-called fork is a change in the program code, as a result of which a new cryptocurrency may appear; in August, Bitcoin Cash separated from Bitcoin). The creators of TON assure that forks are practically impossible in their system, except perhaps as a result of a miner’s error. And if errors in the blocks are still found, a multi-level vertical system will allow them to be quickly replaced or corrected without interfering with the operation of the main chain.
How can Gram be mined?
The base cryptocurrency for transactions in TON will be Gram. Mining Gram will also be different from the usual. The creation and confirmation of new blocks, that is, the extraction of this cryptocurrency, will be handled, according to the memorandum, by the so-called validators (from the English validate – to ratify, confirm). In the document, they are called “new miners”. At the same time, every month the validators will change – 1 thousand new users will choose this job.
“To become a validator, the user will need to purchase a high-performance server and connect it to a stable Internet connection. This is not as costly as purchasing the hardware with ASIC chips that you need to mine bitcoin, ”the document notes. At the same time, validators will have to have a certain amount of cryptocurrency on their account, which acts as a guarantee of quality work. A validator can forfeit it if they sign an invalid block in the system.
How does Telegram plan to use TON?
The creators of TON promise to integrate the system into a variety of Internet services and make payments related to their work, which can increase the popularity of cryptocurrencies and make it easier for inexperienced users to access them. “TON will be easily integrated into third-party messengers and social networks, which will finally make blockchain technology and distributed services accessible to ordinary people, and not just to the community of early adopters of cryptocurrencies. We will provide an example of such integration in our other project — the Telegram messenger,” the memorandum says. Transactions in TON will be carried out in Gram, but the blockchain will be able to support the work of more than 4 billion other cryptocurrencies, the document notes.
If this project is successful, Telegram will become the world’s second most popular messenger with the ability to make payments. Currently, there is no such feature in WhatsApp, Viber, or Facebook Messenger, it is implemented in the popular Chinese messaging app WeChat. So, this service, according to the company’s own data, has more than 600 million users who regularly make payments in the system.
Who and how much can invest in the Telegram ICO
According to TechCrunch, the ICO of the TON project will take place in March, and a presale (presale) was supposed to take place in January. At the first stage, applications were accepted from people close to the company’s management. According to two RBC sources among crypto market participants, the pre-sale has already taken place and demand has exceeded supply. According to one of RBC’s interlocutors, there were too many investors from Russia, so the acceptance of applications from Russians was limited. TechCrunch noted that the minimum investment amount is $20 million. One of RBC’s interlocutors named a different amount – $10 million, another source said that the minimum threshold was set on an individual basis.
As TechCrunch wrote, Telegram plans to raise $500 million during the presale, within the entire ICO — from $3 billion to $5 billion. If the Telegram ICO takes place in such a volume, it will become the largest cryptocurrency sale at the moment. The record was previously held by Tezos, which raised $230 million in July 2017.
TechCrunch reported that Mail.Ru Group might be interested in the project, but the holding denied any desire to participate in the messenger’s ICO. Representatives of investment funds that participated in other ICOs declined to comment on whether they are interested in the placement of Telegram. According to the head of the E&Y TMT-center, Yuri Gedgafov, large investors will treat this placement with caution. “Telegram has a hyped brand, which will make such an ICO “popular” – it will attract many inexperienced buyers who will drive up the price of tokens. In addition, excerpts from the white paper (memorandum. – RBC) distributed on the forums promise to solve all the problems of existing cryptocurrencies, which is difficult to verify without a working prototype. And most importantly, such a volume can attract the attention of regulators in countries where Telegram is widely used, ”the expert says.
