Telegram plans multi-billion dollar ICO for chat cryptocurrency

Telegram plans multi-billion dollar ICO for chat cryptocurrency

Encrypted messaging startup Telegram plans to launch its own blockchain platform and native cryptocurrency, powering payments on its chat app and beyond. Adopting a homegrown cryptocurrency could give Telegram’s payment system enormous independence from any government or bank — something Co-founder and CEO Pavel Durov is known to covet after investors took over his last company, Russian social network VK. The potential for a cryptocurrency inside a widely adopted messaging app is enormous. Sources say that the ICO will require real fiat currency like US dollars for buy-in, not Bitcoin or Ether as others ICOs have to date. WeChat But With Crypto With TON, Telegram aims to develop cryptocurrency-based utility akin to WeChat, which has blossomed into much more than a chat app and acts as default payment mechanism for many in China. While payments can be made very quickly in WeChat for a variety of services, the system remains very centralized. A decentralized platform such as TON could offer more security and resilience. Inside TON In a 132 page white paper, Telegram has outlined a four-stage plan: “TON Services” will be a platform for third-party services of any kind that enables smartphone like friendly interfaces for decentralized apps and smart contracts. With TON DNS, accessing decentralized services could be like “viewing a website on the World Wide Web.” “TON Payments” is a platform for micropayments and a micropayment channel network. It aims to be used for “instant off-chain value transfers between users bots and other services”.

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Encrypted messaging startup Telegram plans to launch its own blockchain platform and native cryptocurrency, powering payments on its chat app and beyond. According to multiple sources which have spoken to TechCrunch, the “Telegram Open Network” (TON) will be a new, ‘third generation’ blockchain with superior capabilities, after Bitcoin and, later, Ethereum paved the way.

The launch will be funded with an enormous Initial Coin Offering, with forthcoming private pre-sales ranging into the hundreds of millions, potentially making it one of the largest ICOs to date. Demand is driven by the fact that rather than the ICO coming from a fresh startup, Telegram is a well-established messaging platform used around the world.

Adopting a homegrown cryptocurrency could give Telegram’s payment system enormous independence from any government or bank — something Co-founder and CEO Pavel Durov is known to covet after investors took over his last company, Russian social network VK. Durov has not responded to TechCrunch’s several attempts to contact him regarding this story.

The potential for a cryptocurrency inside a widely adopted messaging app is enormous.

With cryptocurrency powered payments inside Telegram, users could bypass remittance fees when sending funds across international borders, move sums of money privately thanks to the app’s encryption, deliver micropayments that would incur too high of credit card fees, and more. Telegram is already the de facto communication channel for the global cryptocurrency community, making a natural home to its own coin and Blockchain.

Selling a TON of cryptocurrency

Telegram is understood to be considering raising as much as $500 million in the pre-ICO sale at a potential total token value in the range of $3 billion to $5 billion. However, those figures could change before the ICO, which could come as soon as March. Those figures would make it possibly the biggest private crypto raise to date after Tezos, which raised over $230 million in July.

A pre-sale in an ICO is a minimum cap on investments (sometimes with discounts) to attract big investors (‘whales’) before a wider token sale to retail investors. The public, retail phase of an ICO tends to raise less because there is a long tail of people investing small sums. But front-loading the ICO with institutional investment inspires confidence for retail investors.

Those pre-sale investors may be required to place a minimum buy-in of $20 million if they’re outside of Durov’s inner circle. Sources say that the ICO will require real fiat currency like US dollars for buy-in, not Bitcoin or Ether as others ICOs have to date.

Top-tier institutional investment firms have expressed interest, but Durov is said to be wary of accepting their cash. One firm rumored to have pushed for a pre-sale allocation is Mail.Ru Group (formerly DST), founded by Russian emigre Yuri Milner. A spokesperson for DST did not reply to our inquiry about this story. Interestingly, Mail.Ru Group is the fund that ended up buying Durov’s last company VK.

Understanding Telegram Open Network

Durov’s idea is to launch an entirely new blockchain, using the Telegram’s 180 million users as rocket fuel to power forward into mainstream adoption off cryptocurrency and making Telegram, effectively, a kingmaker of other cryptocurrencies, because of its existing scale.

According to Telegram’s white paper that TechCrunch has review portions of, its cryptocurrency will be called “Gram” and could potentially gain immediate mainstream adoption by being tied to Telegram’s chat app.

Sources say Durov has decided to combine both a centralized and decentralized infrastructure, since a totally decentralized network doesn’t scale as fast as one which has some elements of centralization, hence why Telegram needs to own its own blockchain.

Moving to a decentralized blockchain platform could kill two…

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