Facebook’s Libra has been on everyone’s mind lately. The tech giant revealed in June that it would launch a new digital currency — called Libra — in 2020, which could be used for online purchases and low-fees, instant, international money transfer. The announcement has been met with extreme apprehension from data protection activists, financial regulators and politicians from all across the world. The main concern is that widespread adoption of the new digital currency by Facebook's 2.38 billion users could shake the whole financial system. From G7 nations planning to act against Libra to the American congress slamming Facebook in hearing, there is a still a long road ahead before Libra’s adoption.
Facebook is not the only company in the race to create a massively adopted cryptocurrency. The messaging app giant Telegram has been allegedly working on its cryptocurrency Gram since 2017. The company’s Initial Coin Offering (ICO) has raised over $1.7 billion in 2018 through private accredited investors. This makes it the second biggest ICO of all time behind EOS ($4bn), and $700M more than Facebook’s ICO ($1bn). Gram token could be available for the users through Telegram messaging app before the end of 2019.
Telegram has been operating under the radar for nearly two years - the company was extremely cautious with their announcements and barely advertised their ICO . Telegram’s currency has drawn far less attention than Libra, as we can see on the graph below. This strategy might be a winner. While Libra’s development is impaired by a tremendous controversy, Telegram’s currency is growing unimpeded. With more than 250 million active users and a crypto-supportive community, is Gram going to be the next big digital currency?
Telegram was launched in 2013 by Nikolai and Pavel Durov. The two brothers previously co-founded the Russian social network VKontakte before they were forced to resign from the board in 2014. Nikolai Durov created the original protocol used by the messaging app, while Pavel provided financial support and infrastructure.
Pavel Durov left Russia and is traveling around the globe with his team of 15 world-class developers. Telegram was designed to work despite government censorship. Messages and media in Telegram are encrypted when stored on its servers, and the client-server communication is also encrypted. The service provides end-to-end encryption for voice calls, and optional end-to-end encrypted "secret" chats between two online users.
In March 2018, Telegram stated that it had 200 million monthly active users. According to its CEO, as of April 2017, Telegram's annual growth rate was greater than 50%.
In December 2017, multiple sources reported that Telegram was planning to launch a blockchain platform and native digital currency. The company's ICO was put together to create a new blockchain platform called the "Telegram Open Network" (TON) with Gram being its native utility token.
In February 2018, during the first round of the ICO, 2.25 billion tokens (45% of the total supply) were sold at $0.5 each. During the second round of the ICO 640 million tokens (13% of the total supply) were sold at $1.8 each. In both rounds, the minimum amount for participation was $20 million. As of April 2018, the firm had reported raising $1.7 billion through the ongoing ICO. As a matter of comparison, Facebook's ICO has "only" raised $1 billion with a minimum participation of $1 million. Company officials have not made any public statements regarding the ICO. Only the pre-ICO rounds were conducted; the public ICO was cancelled.
In June 2019, the cryptocurrency exchange Liquid has partnered with Gram Asia for the first public sale of 2.5 million Gram token (Gram Asia is the largest holder of the Gram token in Asia). The proposed sale price was $4, which is 700% higher than the first ICO round.
The Telegram Open Network objective is to provide a new blockchain solution in order to meet the speed and scalability required for a mass adoption of cryptocurrencies.
Telegram’s blockchain network is a Proof-of-Stake, multi-blockchain system consisting of a main-chain and several accompanying blockchains. According to TON’s white paper, the platform will be much more scalable than current digital currencies such as Bitcoin and Ethereum. Millions of transactions per second will be achieved with an “infinite sharding paradigm”, allowing “TON blockchains to split and merge to sufficiently control the amount of load on the network”. TON also uses “instant hyper-cube routing,” which “aims to ensure that transactions are processed swiftly notwithstanding the size of the system.
TON will have a number of services powering the ecosystem, as outlined below. These can all be integrated with any third-party social networking or messaging applications providing a way to connect decentralized and centralized entities.
- TON Storage : distributed file-storage
- TON Proxy : IP and identity anonymity through a proxy layer
- TON Services : A platform for third-party service
- TON DNS : makes it easier for humans to use decentralized apps
- TON Payments : A platform allowing instant micro-payments
The Russian research agency Aton recently published a report providing information about how Telegram faces regulatory uncertainty.
“Telegram and TON Issuer Inc, a wholly owned subsidiary that Telegram formed to act as the issuer in the token sale, may stop distributing GRAMs, discontinue the development of the TON Blockchain, or terminate operations in a jurisdiction should governmental or other actions make this distribution, development and/or operations unlawful or commercially undesirable.”
Many countries are still trying to figure out how to deal with blockchain technology, which can impair Telegram’s development.
What’s next for Telegram ?
With more than 200 millions users, Telegram can use its digital currency to easily monetize its community. Brands can use Grams to implement sponsored content or premium services in their own Telegram’s groups and directly connect with their clients. To facilitate those interactions, Telegram aims to equip its messaging with a native and user-friendly wallet designed to receive, exchange and send Grams. According to its founders, the implementation of such a wallet would immediately make Grams the most adopted digital currency worldwide.
However, the messaging industry is very competitive. Telegram cryptocurrency will have to deal with Libra, Facebook very own cryptocurrency, associated with WhatsApp and Facebook Messenger. Telegram is currently the 8th most popular messaging app, well behind WhatsApp, Messenger and WeChat.