This article is dedicated to an in-depth analysis of TON (Telegram Open Network), a platform, created by Pavel Durov on the basis of the anonymous Telegram messenger.
What Is TON (Telegram Open Network)?
TON (Telegram Open Network) is a blockchain platform created on the basis of the Telegram messenger. The messenger was created by Pavel Durov.
According to the whitepaper, Telegram TON promises a lot of benefits. First of all, TON guarantees user-friendly use cases. The transactions that will take place on this blockchain do not require a lot of time to be completed and are executed as quickly as those of Visa and Mastercard payments systems. Large fees are not to be expected.
The blockchain works on the basis of the Proof-of-Stake protocol which makes transactions more secure. The architecture consists of one blockchain and a large number of additional networks. The blockchain will support sharding technology. It will speed up the new blocks generation and increase the speed of transactions.
TON blockchain consists of a set of networks. They may be divided into several categories.
First of all, there is the main blockchain. It will store base information about the protocol, hash rate, information about validators and their balances. Then, there is a number of additional blockchains that allow TON’s users to execute smart contracts.
Such blockchains can be created in compliance with different needs and be used on different virtual machines to execute smart contracts. Last but not least, there is a shard chain, blocks that are similar in their architecture to the blockchain.
Such a structure allows them to be rewritten and, in theory, it should eliminate the need for the hard forks of the network.
Gram is the internal cryptocurrency of TON platform. The platform’s developers see it as an analogue of Visa and Mastercard: instant transactions will occur within the network. Gram is based on the Proof-of-Stake protocol and will be secured through the work of smart contracts. This will help to conduct up to 10 million transactions per sec.
Gram does not allow mining. The validity of transactions is provided by the network’s validators who receive a fee for validation the transactions. In this, Gram is similar to Ripple.
Telegram messenger saw the light of day six years ago, and Pavel Durov emphasized more than once that there is no advertising in his product and there never will be. Unfortunately, advertising is the main source of income for most apps. Instant messengers are no exception. However, the blockchain market has opened up new monetization options for Telegram.
Why ICO Telegram? If you are using this messenger, you probably noticed a lack of advertising, or perhaps heard loud statements by Pavel Durov that there will be no advertising.
This can only mean one thing: the project does not currently generate income, but it requires significant investments from its creator. One of the most promising ways to get out of this situation is to integrate cryptocurrency into Telegram, as WeChat did with NEM.
On December 22, 2017, Cointelegraph and Forklog released the news about Telegram conducting an ICO procedure to finance the launch of their own blockchain platform TON by messenger. A few weeks later, on January 12, 2018, Telegra.ph published a mailing list from TON official support representatives with a proposal to participate in Private Token Sale.
The closed ICO was held in January-March 2018 in several stages. At the first stage, investors were selected especially carefully. These included people close to the leadership who were credible. Among them are Roman Abramovich, David Yakobashvili and Sergey Solonin.
In the second round, ICO could be invested by anyone who would like to invest in no dirty money. The third stage was cancelled, because they collected the necessary amount, exceeding the target by 2 times.
It was possible to invest in ICO Telegram in dollars or in another fiat currency in terms of the dollar rate. According to rumors, the minimum amount of entry into the project was $ 1 million. However, dwarf investors also participated in the ICO, who pooled their assets and entered the project through some funds.
Telegram Open Network’s Features
Gram is a cryptocurrency based on the TON blockchain platform developed by Telegram. A feature of the Gram blockchain platform is the high speed of transactions. Cryptocurrencies implemented on blockchain platforms of the initial generations, due to the low speed of transactions, are more suitable for investment than for use as a payment tool.
For example, Bitcoin can provide only 7 transactions per second for all users, Ethereum is 15. Gram blockchain platform is expected to be millions of transactions per second. According to the developers, Gram should become a crypto-analogue of Visa and Mastercard.
It is planned to ensure the work of “smart contracts”, the issue is based on the proof of ownership share, the speed of up to 10 million transactions per second is planned, the help of neighbouring nodes is used.
In Gram, instead of mining, “validators” provide for establishing a consensus on the validity of transactions, which receive a commission for their services . This makes Gram not so much Bitcoin as Ripple.
First of all, TON means user-friendliness. The transactions that will take place on this blockchain do not require waiting and a large commission and are executed as quickly as Visa and Mastercard. The blockchain works on the principle of the Proof-of-stake protocol, which makes transactions secure.
The architecture consists of one blockchain and 292 additional networks. The blockchain will support sharding technology, which will speed up the generation of new blocks and increase the speed of transactions.
Gram cryptocurrency capitalization by the end of 2019 could reach $ 29.5 billion, reports Bell, citing a report from HASH Crypto Investment Bank. In a report dated October 2018, the target cryptocurrency value of Pavel Durov by the end of 2019 is estimated at $ 5.9 per one Gram.
As reported, the Gram company could present such an assessment to its investors – at least, it was specified as a target price (target price) in one of the latest notes for investors, reports The Bell.
Senior analyst at HASH CIB, Rustam Botashev, acknowledged that Gram’s valuation of $ 5.9, derived from the bank’s own methodology, is speculative because today no one knows how to evaluate cryptocurrency.
Pavel Durov promised to launch the blockchain platform by October, otherwise, under the terms of ICO, he will have to return the money to investors.
Pavel Durov refused to mine and immediately formed all 5 billion units of his cryptocurrency for sale to investors. Of these, 50% went to the fund TON Reserve – a non-profit organization whose task is to stabilize the Gram rate against the dollar.
’TON Reserve’ automatically begins to buy Gram when its price falls, and also ensures the release of new Gram at a price not less than 2% higher than a year earlier.
4% Gram will be rewarded by TON developers.
10% will go to the non-profit organization TON Foundation, which will maintain the TON infrastructure in working condition.
Telegram Open Network Future
Nikolai Durov calls TON the blockchain on top of the blockchain. Due to the complexity of the main chain and work blocks, the developers promise millions of transactions per second. As long as there are no real users in the platform, each tester receives 20 Gram cryptocurrency units to verify the functionality of smart contacts. For comparison: Visa processes 24 thousand transactions per second, and Bitcoin – 3.5 transactions per second.
TON seeks to replace the usual web by making it encrypted, expandable and based on crypto-economics by default. The volumes and speeds on which the creators are laid are so great that they make sense only if the cryptoplatform is used by hundreds of millions of people at the same time
After the successful ICO project of Pavel Durov, the TON related excitement and information channels were somewhat asleep. A certain revival was during the “blocking” campaign, but it also gradually faded away.
Of course, internal work is going on, programmers are programming, blockchains are blockchains, and I have no doubt that the Telegram internal token will be launched. Another thing is completely unclear how the crypt from Durov will be demanded and competitive on a global scale.
Telegram is certainly a successful project. But his success develops smoothly until he enters the clearing of giants such as Facebook and Twitter. The functionality of the messenger is in demand, but, at the same time, limited. Let me remind you that the same Facebook has a built-in instant messenger and, if necessary, functionality will be added to it.
This is similar to the completed competition for cameras and smartphones with an integrated camera. Cheap “soap boxes” died, their place was taken by iPhones and Android backgrounds, while the cameras remained in the use of a rather narrow professional audience.
Exiting your own cryptocurrency TON can result in unexpected consequences for Telegrams. One thing is a squad crypt for settlements within the project, and quite another is a global currency. In principle, any large-scale international social network/messenger is capable of its “internal” unit of account to reach a global audience. But how much does Facebook need such a strong competitor?
Taking into account the financial and lobbying capabilities of leading social networks, we should expect active and, alas, effective countermeasures.
There are two possible options: either to create legal and administrative obstacles or to bring our own crypt to the market at an accelerated pace. I note that a two billion Facebook audience will instantly provide global domination.
We suppose that in the case of political support for the cryptocurrency subject matter “as a whole”, this is exactly the option that will be adopted. The precursors of this have already sounded – in the spring there were reports of Zuckerberg and Co.’s interest in issuing their own cryptocurrency, and in early July the social network lifted the ban on advertising cryptocurrency.
It is based on the expected competition that I don’t believe in TON’s global success. As a niche token – yes, success is quite real, Telegram has a serious loyal audience, ready to support it without taking into account economic realities. But such support will be limited.
Based on this, I would suggest at first sharp rise in TON “on enthusiasm”, and then a decline after realizing the real situation and comparing it with the plans of competitors. Restrictions may disappoint investors and have a negative impact on the entire Telegram.
In any case, we are looking forward to the development of the project and the release of Telegram tokens. It is an interesting project to keep an eye on. Follow ChangeNOW’s blog to know more!