Telegram ICO - Big Cryptocurrency or a SCAM?

Since the beginning of January this year, news shows that the famous Telegram application will create its own cryptocurrency. Since they "got" a technical whitepaper (a document explaining the details), numerous fake websites appeared soon. Will Telegram really launch its own cryptocurrency?

Short answer - YES. At first it was not safe, and given the large number of fake pages that "held" pre-ICOs sold, everything seemed like ordinary fraud. Thus, a large number of similar pages that had fallen Bitcoin and Ethereum into the value of several million dollars in the past month have been thrown away. Even the lack of official information from the Telegram team was not a sufficient reason for more cautious investment.

Example of FAKE Telegram ICO website

REAL TELEGRAM ICO

While January was full of false Telegram pre-ICO websites, the true pre-ICO (sales for "big players" before the public ICO) was kept secret. On February 17, 2018, the Securities and Exchange Commission (SEC) published a document stating clearly that Telegram Group Inc. raised $ 850 million in investments to develop "TON blockchains, maintain and improve Telegrams applications, and other purposes". It is assumed that this "pre-ICO" was reserved for the inner circle of Telegram's founder, Durov brothers, and invested in fiat currencies, at a minimum of $ 20 million. It was about selected 81 investors. The date when it will be held true, the public ICO is unknown, and is expected in March.

AUTHORS OF TELEGRAM

Telegram is an application that soon became known due to its great focus on protecting the privacy of users by using end-to-end encryption. The telegram application currently has more than 200 million users, and the brothers names are Pavel and Nikolai Durov. These are in fact the creators of the famous "Russian Facebook", VKontakte (vk.com). After disagreement with the VK administration, the brothers went to the United States by buying citizenship with the money earned on the VK ($ 300 million).

After arriving in the United States, they launched the Telegram, which was mostly funded by the $ 300 million earned on VK. You could immediately notice that it is actually Nikolai Durov mind behind the majority of program code of both projects. He is a brilliant mathematician, winner of gold and silver medals at the International Mathematical Olympiad, renowned Russian scientist with 2 PhDs, Telegram MTProto encryption maker and author of white paper on Telegram cryptocurrency - Telegram Open Network (TON).

TELEGRAM OPEN NETWORK

When analyzing a large whitepaper of 132 pages, one can understand several key things. The telegram issues its own cryptocurrency  that will be called GRAM and will be used within the Telegram application. Telegram generally has a 5-step development plan:

• TON services - a platform for executing independent applications, ie for deploying decentralized applications and smart deals.
• TON DNS - a system that would allow access to various decentralized services by simply rendering names similar to today's website system.
• TON Payments - Microtransaction System. This would allow instant off-chain payment for services between bots and users.
• TON Blockchain - will consist of the master chain and the associated 292 blockchains. Here are some key features: Infinite Sharding Paradigm (allows different cross-chains to be shared and re-merged as needed), Instant Hypercube Routing (serves to quickly exchange data between different chains), Proof of Stake (consensus type) and 2-D Distributed Ledgers (allows you to create new, "correct" blocks of "defective" - ​​in essence a mechanism by which the network itself cures itself, preventing unnecessary margins.) Whitepaper over one million transactions per second.
• TON Platform - Plans for TON Storage and the TON Proxy (IP address masking layer using I2P protocol, which prevents the TON network from being set up - similar to the Monera Tower project).

SHOULD I PARTICIPATE IN ICO OR NOT?

It is estimated that the above pre-ICO was actually a smaller share of the expected amount. Namely, Telegram plans to raise about $ 1.5 to $ 2 billion to complete TON. Why does it need such amount remains unknown. In all likelihood, this will be the largest ICO in history, surpassing Filecoin ICO, which raised $ 257 million. According to a token distribution plan, 4% goes to founders, 52% remains owned by Telegram Inc. to prevent manipulation in the market, and 44% go to public distribution. In total, the public will be allocated 5 billion GRAM token, per (assumed) price of $ 0.1 per GRAM. The Token will be available on various exchanges, and allegedly available within the Telegram application. As we have noted, the ICO Telegram will be held in March, the date is unknown yet.

The TON Development Plan reveals that the project is only beginning. By the end of 2018 an official wallet can be expected, while the development of the other services mentioned above is expected until the end of the first half of 2019.

This is a very big project and maybe "pre-financed". It is a large amount of money, and the token value is exclusively used within the Telegram application. Since such amount of money for such a small "market" is unreasonable, with the fact that the public has only 44% of tokens, this ICO sets this as a risky investment. Do not misunderstand me. It's about building a cutting-edge communication platform, probably the very best blockchain technology to date.

Is this the opportunity to get rich?

This is difficult to answer, but for the average investor, it looks more like a risky option. It is more likely that the price of the token will fall and the public will finance the TON network development - no return on investment. Who knows, maybe I'm wrong, but like with every ICO, you should be careful. Just because it's a familiar application does not mean that you need to invest in it right away. Just think of the situation that Apple and Google remove the app from their markets - is the GRAM token worthless then?