Encrypted messaging startup Telegram is preparing to launch a blockchain-based cryptocurrency. The project will be bootstrapped through an initial coin offering (ICO) that could shatter records with a multi-billion dollar token launch.
“Gram,” which will function as the native currency of the Telegram Open Network (TON), will be integrated directly into the Telegram platform, enabling the platform to leverage the app’s 180 million users and sidestep some of the difficulty associated with reaching a critical mass of users.
The news was first reported by TechCrunch, whose staff reviewed portions of Telegram’s 132-page whitepaper.
The document describes TON as a “third generation blockchain” that will consist of a master chain and 2-to-the-power-of-92 accompanying blockchains.
“Its most notable aspect is that it will have an ‘Infinite Sharding Paradigm’ to achieve scalability. Thus, TON blockchains aim to be able to ‘automatically split and merge to accommodate changes in load’. This would mean new blocks are generated quickly and ‘the absence of long queues helps keep transaction costs low, even if some of the services using the platform become massively popular,’” The publication reports, citing the whitepaper.
The developers claim that TON can process 1 million transactions per second, which will keep transaction fees minimal and make Gram practical for micropayments.
Telegram is not the only encrypted messaging developer seeking to release a cryptocurrency. Moxie Marlinspike, best known as the creator of Signal, recently released a whitepaper for MobileCoin, a federated blockchain based on the Stellar Consensus Protocol (SCP). MobileCoin, however, will not have the benefit of a built-in user base.
Telegram’s ICO presale alone could target as much as $500 million, which would more than double the $257 million raised by Filecoin last year, while the token sale itself could enable Gram to launch with a market cap of $5 billion. In a departure from ICO norms, Telegram plans to require supporters to contribute using fiat currency, not ether or bitcoin as most others do.
The project is apparently a personal one for Telegram co-founder and CEO Pavel Durov, who founded Russian social network VK but was forced to sell his stake by shareholders with powerful government connections.
In addition to its utility as a payments network, TON will also feature a DNS service to enable users to access decentralized services with an interface similar to that of a web page.
According to a roadmap spelled out in the whitepaper, Telegram hopes to release a minimum viable product (MVP) as early as the first quarter of this year, though a full-featured platform will not be released until at least the second quarter of 2019.
Write to Josiah Wilmoth at josiah.wilmoth(at)ccn.com.
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