TON vs Libra. Who Will Win?
This article is dedicated to the comparison of the two, arguably, most spoken about blockchain projects that were brought by the social media companies. TON, Telegram Open Network, is a cryptocurrency developed by the Telegram messenger’s team and Libra is a blockchain project announced by Facebook.
We will compare the history of their creation, public opinion and key features. All the information provided should attempt to help you out make a decision whether the projects have future on the crypto market.
What Is TON?
On January 8 2018, Telegram Foundation published the details of the launch of the blockchain platform. It would be published on the Telegram messenger and bear the name the Telegram Open Network. The information about the company's ICO became public a few days after.
During the ICO, Pavel Durov and his colleagues planned to raise $3-5 billion. The ICO itself was scheduled for March 2018. One of the possible names for the cryptocurrency was Gram.
The documents published showed that 4% of the total created cryptocurrency supply (about $200 million worth) was planned to be reserved for Telegram employees. 52% of the total supply would be protected from speculative sales, while the remaining 44% must be set for free trading.
It is quite obvious that, along with the new cryptocurrency, the messenger should also have a wallet where it can be safely stored. Obviously, there’s always a wide selection of wallets on the crypto market but the native wallet is somewhat a necessity. It was stated that the wallet would be called Telegram Wallet and its launch was scheduled for the fourth quarter of 2018.
There were few features disclosed about the wallet. However, it was promised that it would be possible to store both TON and fiat funds in the wallet. The schedule was not met but it’s nothing to be surprised about with ICO projects. The main launch was planned for 2019. At that time, the rest of the TON services will have to start.
In the white-paper TON is described as a blockchain platform with surrounding support systems. Those systems should include the possibility to integrate TON with third-party blockchain platforms. Developers plan to reduce transaction costs in the event of a large load. The platform is designed to create third-party services of any type. It will integrate smart contracts in its architecture.
The architecture itself, according to the white-paper, looks promising. The Instant Hypercube Routing solution should provide the maximum speed for the blockchain. TON will use 2-D (2-D Distributed Ledgers) distributed registers. It will allow building new active blocks on top of any blocks that turned out to be incorrect. Such a “self-rebuilding” schema should eliminate the disagreements in the network, i.d. the need for hard forks.
On top of that, TON’s blockchain is based on a dynamic Proof-of-Stake protected by several parties with a high degree of fault tolerance. It will also handle the storage of identifiers, payments, and smart contracts. There’s also a TON Proxy and Storage services that are described in details. The former will be used for anonymizing users and the latter is created to be a distributed data storage.
A successful ICO and the launch of cryptocurrency have ensured the messenger’s independence from governments and banks.
What Is Libra?
In June 2019, Mark Zuckerberg in more detail introduced Libra, a new name for Facebook Coin. It is supposed to be a native coin for several apps, mainly, for Facebook.
Transactions will take place on the blockchain technology with a private network. However, the currency itself will be supported by a variety of traditional fiat currencies. On the one hand, it should give the coin some stability, on the other, it makes it a stable coin and not a cryptocurrency in the original sense of the word.
Libra can be bought for any currency and used for payments on the Internet, as in ordinary stores. The system should benefit both buyers and sellers. It can bring a reduced commission to sellers and convenience of buying something with a messenger app for the buyers. The currency will be issued by a non-profit association based in Switzerland. Twenty-seven partners are involved in the project. They include large payment and online transactions companies, such as MasterCard, Visa, PayPal, Uber, as well as Spotify and Iliad.
The goal of Libra coin currency is to be used for payments and money transfers through WhatsApp and Facebook Messenger. It should be available in all countries where Facebook is present.
Unlike Bitcoin or any other non-stable altcoin, Libra coin will not be subject to significant market volatility. It is so as Facebook has the financial means to ensure the value of Libra in the currency stored in Facebook bank accounts. In addition, Libra cryptocurrency price is supposed to be supported by several fiat currencies. Among them, there are the euro and the dollar. As some of the most stable currencies, they should provide stability for Libra cryptocurrency price as well.
It is assumed that Libra coin will be of minimal interest for traders. The target audience for Libra is a society and people.
One of the largest Facebook’s advantages is the largest audience. The Libra Network can potentially count on the involvement of millions of users that use WhatsApp messengers (1.5 billion users), Facebook Messenger (1.3 billion) and Instagram (1 billion).
In addition, Facebook (Libra) plans to combine various messaging apps into one. The main goal is to make it easier for users to communicate and provide a secure encryption protocol. Such a symbiosis will benefit future cryptocurrency. It will become more accessible to users all over the world.
Facebook Messenger already has a payment feature. However, the service faces the inconvenience of the banking system. Indeed, transactions can take up to 5 days. On top of that, several intermediaries have access to your account. Thus, Facebook's cryptocurrency will make the process instant and replace banking providers.
What Are The Differences Between Ton And Libra?
So, let’s compare TON and Libra on several key features.
The TON architecture is based on the de-anonymization of users at will or the request of some TON Site holder to reveal the user's identity. The testing of this system began with Telegram Passport. It was launched was commissioned on July 26, 2018.
At the same time, in Telegram Open Network, a balance between privacy and the hindrance of criminal activities was chosen. TON External Secure ID (Telegram Passport) is a user ID associated with a data store that identifies the user. It contains scanned copies of the users’ documents, bank information and residence confirmation. The user themselves uploads their personal data and it is encrypted with his personal key. The data is inaccessible to anyone until the user decides to remove their incognito in front of someone.
As for Libra, it does not provide any anonymity. Facebook already knows a lot about us. Maybe, too much. Libra will store and process even more personal information than any existing bank. Moreover, it will be possible, if necessary, to easily block someone’s account. It will create a lot of financial difficulties for the Libra’s customers. That is, the control will increase.
As it was already mentioned, Libra is designed to be a stable coin. It means that Libra price should stay relatively the same and change only if the prices of supporting currencies change. It creates little to none investment possibilities.
TON, on the other hand, does not have a stable price. Its rate should and will depend only on market demand. It creates a lot of interesting investment options, however, it is always difficult to predict the price of the un-launched coin.
Undoubtedly, Facebook’s audience is overwhelming. It amounts to 2 billion users. Even if a small portion of those users will adopt Libra, many payment methods will be faced with a serious competitor. On top of that, LibraBFT is supported b large companies, like Uber, PayPal and Instagram, that will support it right away.
Telegram’s audience is significantly smaller, however, dare we say, more inclined to the crypto projects. It is difficult to compare the prospects of the two currencies, seeing the regulation problems that Libra now faces.
Ton’s And Libra’s Prospects
According to many analysts, central government banks are interested in Facebook launching a cryptocurrency. It is so as many governments are now interested in launching national cryptos themselves. It will test the waters and determine the risks associated with the release of digital currency.
The market for purchases and transactions via instant messengers is on the rise. It is much more convenient to have a currency native to the app that you use daily. Also, customers from the developing countries may find it difficult to open a traditional bank account or make a purchase over the Internet. Therefore, instant messengers are a new way to provide banking access to people excluded from the global financial system.
Facebook and Telegram are not the first ones to introduce crypto native to a messaging app. Currently, China is the leader in this market. There, Tencent through WeChat is used for electronic payments. This mobile app allows Internet users to chat, buy air and railway tickets, pay for purchases and travel by taxi. The difference from Libra coin cryptocurrency is that in the case of Tencent, the control belongs to the Chinese government. Is there much of a difference, though?
Indeed, Libra does not intend to directly compete with banks as TON does. The Libra’s focus is on those potential users who are not covered by banking services. At the same time, the project organizers intend to earn money on the fact that they will invest balances in Libra in practically risk-free cases and receive interest. Those cases include obligations of the US Treasury, for example.
Ton is designed to overtake the banking systems. Its faults are too visible for the people who know where to look. Arguably, more people in the community will be inclined to use TON but nobody whether it will be enough to stop Libra.
Anyway, more information is coming when the USA Government is done with the Libra hearing. After July 16, it will be easier to make conscious predictions on Libra’s and TON’s future. For more articles like this, do not forget to follow ChangeNOW’s blog!