Cryptocurrencies like Bitcoin and Ethereum have taken over the world by storm.
In only a few years, these currencies have not only grown in value, but due to their peer-to-peer exchange and other qualities, are quickly becoming a preferred way of transaction.
Last December, white papers were leaked that revealed information about an upcoming cryptocurrency. This laid out the outgoing plans of launching a Blockchain service, which would be launched using the Telegram platform.
According to TechCrunch and Business Insider, using the Blockchain platform, Telegram wants to develop a currency to rival currencies such as Ethereum.
While there has been no official confirmation from Durov brothers, the founders of Telegram, the paper still provides some interesting insights into the possible launch and may appeal to both enthusiasts and users of the app.
Telegram Open Network (TON)
TON is being described as a scalable multi-Blockchain architecture using a proof-of-stake protocol, which will help in overcoming the hurdles of currencies like Bitcoin and Ethereum.
It is hoped that the developers will be able to use Telegram’s developer base to get a user base (there are 20mln users on Telegram) for their services.
Although, the paper also points out that the system lacks a capacity to maintain high volumes of transactions, a limited market for use, and unfriendly user applications.
The Strength Of Telegram’s User Base
It is extremely fascinating to think about the disruptions that the cryptocurrency world will face if even half of the 180 million (user base of Telegram) start using a cryptocurrency.
This process will not only end up launching the currency, that was mentioned as a “gram” in the paper, into the limelight, it will also make it the king of all the currencies out there.
The credit for the above doesn’t only go to the user base, rather, it is the amazing network/system that the Durov brothers are planning. Conventionally, cryptocurrencies have always been part of a decentralized network. Not completely on the contrary by having a centralized network, the developers of Telegram are working on a combination of a centralized and a decentralized network.
Core reason behind the above, being that decentralized networks do not scale as fast as the centralized ones.
Like Bringing Decentralization To WeChat
WeChat is simply the choice of the masses when it comes to chatting, as well as transactions, in China. The downside of that, is that, with WeChat, all the transactions are in the end, centralized.
Bringing a cryptocurrency to Telegram, will be similar to the way WeChat works, but provide more security and resilience, with the way their decentralization will work. It has also been speculated that the upcoming Telegram wallet will allow users to keep both “grams” and flat currency in their wallet.
Also, Telegram has managed to create an ecosystem of bots and channels, which are developed by third-party developers. TON will also underlie everything that these third-party devs can bring to the table.
Controlling The Currency
Telegram plans on keeping 4 percent for its own development team, for a four year vesting period. The plan is also to retain 52 percent of the grams, for the company itself, to avoid speculative trading, while the remaining 44 percent will be available for sale to public and private investors.
The Investment Process
Telegram aims to raise 1.2bn through two steps. The first $600m will be raised by the investment of venture capital backers and close investors which will be personally invited by the company. This process will run between January to February.
The next $600m will be raised by allowing the masses (the general public) to invest, in March.
Coindesk also reported that the goal that Telegram has set, is to bring the use of cryptocurrencies into the everyday life of the general public. It does look like a tough task, keeping in mind how since their inception, cryptocurrencies have been a source of fascination, curiosity, and concern.
“Nothing substantial about the hard parts of designing a decentralised protocol. It is essentially a wish list of things they want to have, and how it will work assuming that their wish list doesn’t crash and burn.” Noted Charles Noyes, Blockchain analyst and quantitative trader at Pantera Capital, also raising a concern about the lack of transparency in the working of the encryption protocol of Telegram.
He continued: “I do not know how it will work. I cannot, in 132 pages, gain the slightest intuition as to how to go about proving that the hard problems it needs to solve will be solved.”
CoinDesk reported that MIT professor, Christian Catalini also said that the company should provide information about how such a platform will be governed.
The Durov Brothers, Nikolai Durov (a mathematical genius) and Pavel Durov were behind VK, a social media website that was often touted as “Russia’s Facebook”. It didn’t end on a good note, though. They were forced to sell their stakes in the company by oligarch shareholders who were deeply connected to the Putin-led government.
On the brighter side, Pavel managed to negotiate a deal with a hefty payoff, in the form of $300 million and 2,000 Bitcoins. He ended up buying a citizenship in St. Kitts, Nevis and spends his time in London, Dubai, and whenever possible, in Russia.
Although, since then, both the brothers have developed a resentment towards outside investors. A decentralized currency that they control (ironic, isn’t it?) will provide them of being the creators of an innovation, that can be insulated from government interference.
While we cannot wait for the rollout of grams, only if to see the way that such an ambitious system (an amalgamation of a centralized and a decentralized network) will work, the concerns are real. All we can do right now, is wait, and brace ourselves, for the disruptions, that are about to take place once “grams” hit the world of cryptocurrencies.