The Telegram Open Network ICO white paper leaked, this ICO will be big

Rhys Muter 10 January 2018

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Telegram is developing what they say will be the most widely used wallet on Earth.

A highly anticipated ICO from the public messaging app Telegram has had its white paper leaked to media today 10 January 2018 setting the cryptocurrency community astir. The 132 page white paper, which up until now had only been released in fragments, is giving credence to the idea that the Telegram Open Network (TON) will be one of the most influential ICOs of 2018. Considering that Telegram has 180 million users world-wide the buzz is understandable.

Telegram is taking the approach to their development to develop a system similar to the popular messaging app in China called WeChat. This highly centralised platform provides a very efficient means of communication and has also evolved into the de facto payments system of urban China. In a similar vein, the development core of TON is confident that its wallet will be the most heavily used wallet on Earth.

TON third generation blockchain innovation

The most interesting innovation from a user perspective is the integration of the Telegram wallet. This innovation will reportedly allow a user to store fiat currency in addition to cryptocurrency. The release of the wallet is planned for quarter 4 2018.

The secure ID protocol of Telegram means that the platform is know your customer - anti-money laundering (KYC-AML) policy compliant. The protocol will work in a way that after passing an identity verification, a “passport” is issued which according to the white paper removes “major friction” for a user operating with crypto assets. That function of identification will be for services that have a secure ID requirement. It is unclear from the white paper which services within TON that will be.

The TON white paper goes on to claim that the TON passports and other sensitive personal data will be maintained with “end-to-end” encryption that only the “owners” can know. It can only be assumed from the document that the “owners” referred to are TON account owners and not the TON development core. The white paper further claims that in future, third party providers could provide identity verification services which are at present stored on Telegram’s distributed servers, later to be the TON blockchain.

TON is expected to be operational by the end of 2018 and that service will be comprised of the “external secure ID,” the TON storage, proxy, and payments system, among others. The launch of the Telegram payments system is in its early stages and will need conversion to the yet to be launched TON blockchain protocols. There are some doubts as to whether the TON system of payments will be as successfully adopted in mainstream society as has been the case with WeChat in China.

While the micropayments mechanism may be as efficient or perhaps more efficient, reaching the scale of urban adoption across Western countries seems to be a challenging task. The benefit for WeChat, in the Chinese case, has been that the system of micropayments in China on the WeChat platform has been primarily conducted in Chinese Yuan. WeChat has very limited interface with other currencies. This means that if TON can develop that kind of cross border payments mechanism within the West, its technology will have an advantage.

For the “gram,” which is the cryptocurrency denomination of TON, to become widely adopted across Western urban centres through the expansion of its payment system or its “ecosystem” presents significant hurdles to overcome. Depending on the regulatory environment and industry application this kind of technology seems like a more suitable integration within a platform such as Facebook.

The TON supply and distribution

TON will have an interesting supply distribution. The ICO itself is slated to be offered under a “simple-agreement for future tokens” which aims to establish a framework for the United States Securities and Exchange Commission compliance. The token will be based on an inflationary model which will mean that the price value of the Gram will rise relative to a stable US dollar at a “projected” rate of 2% per annum.

Total supply of Grams will be five Billion. 4% of that issue will be held for a four year vesting period in reservation for the development team. That will mean the development team will receive a 200 million gram pay cheque after four years. Consistent with most other reputable white papers, for example IoT Chain, at least 52% of the Gram will be retained for purposes of defending it against price instability resulting from trade speculation.

That means the remaining 44% will be sold as part of the ICO. For those who get in early with the ICO, they will see an immediate appreciation of their US$0.10 Gram as each subsequent token will be raised in price by one billionth incremental rises. This means that if there are one billion units of Gram sold a US$0.01 rise is a mathematical certainty creating a secure profit for early investors.

This strategy is bound to please investors with the capacity to enter the market early. The next hurdle will be a regulatory passing and then as to whether the TON blockchain can materialise and pass on those benefits to investors.

This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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