Telegram is causing a significant shake-up in the world of cryptocurrency with its massive ICO, raising a huge sum of $1.7 billion, making it the greatest ICO yet.
Initially, in mid-February 2018, it raised $850 million, before raising an extra $850 million to bring the sum to $1.7 billion. Telegram seems to have attracted the interest of investors as the price Bitcoin is diving disturbingly in the first quarter of 2018.
Telegram is an encrypted messaging service which is set to create the first mass-market digital currency by providing an avenue that presents a fast and intrinsically scalable multi-blockchain design.
Although this messaging app looks like WhatsApp, the difference between Telegram and WhatsApp is the stern emphasis on privacy, whereby users can communicate in secret chats. The Telegram platform was launched in 2013, and in 2018, it has garnered over 180 million users. The app also supports larger groups up to (10000) users and renders a sleek platform for building web APIs around it.
Pre ICO Campaign
Telegram which is a renowned encrypted messaging application used to share messages and media files amassed a lot of attention in 2017 as a result of its quick responsiveness, excellent security, and simple user interface.
It later contemplated launching its blockchain platform and a correlated cryptocurrency. The platform to be launched was called TON (Telegram Open Network) with the currency named “grams”.
Telegram raised the sum of $850 million earlier in February 2018 in its first pre-ICO sale, although it had a target of $1.2 billion. Later that month, the company raised $850 million in its second pre-ICO sale, which summed up to $1.7 billion, surpassing the $1.2 billion mark.
The amount raised so far conveniently tops the list of 2018 token sales. However, with the huge success, Telegram is tight-lipped, and the information is gathered from leaked sources.
As revealed in a Form D disclosure file with the Securities and Exchange Commission, Telegram states that the new $850 million raised were from 94 investors, which grossed about $1.7 billion. It does not seem satisfied with this figure because it might just attempt one or more offerings in addition to the earlier sales.
It was reported in late December 2017 that Telegram was planning to do some ICO come 2018. Later on, news about its plans started to leak out, with its technical ambitions seen as broad for the proposed Telegram Open Network (TON). There were also promises of incredibly fast payments and micropayments using mobile devices, with relatively low transaction fees.
However, the Telegram team intends to use the funds for the development the TON, which is an ambitious blockchain that is expected to decentralize many aspects of digital communication, which can range from browsing transactions to file sharing. The funds will also be used for maintenance of the Telegram Messenger.
The Pros and Cons
Even the Telegram’s pre-ICO sale has been a massive success; some people think that its activities are suspicious because as of now, Telegram hasn’t yet recruited a team or build the platform required to launch the TON coin. These people advise investors and cryptocurrency enthusiasts to be very cautious as regards the Telegram token, especially in light of significant amount of fraudulent ventures disguised as genuine ICO.
While some people insist it’s all smoke and dust, some others believe that it is an excellent chance to invest in a platform that offers communication and commerce.
Here are some of the benefits and downsides to investing in Telegram’s ICO.
- Telegram is regarded as one of the most successful encrypted messaging platforms with 200M monthly active users.
- Telegram’s cryptocurrency, TON, is said to be able to be used for real transactions thereby enabling micropayments between users and businesses all around the world.
- The Telegram founders, Pavel and Nikolai Durov, are two brothers who are experienced entrepreneurs.
- Another thing that makes the Telegram ICO worth its salt is it has high liquidity status. Investors will get their tokens in December 2018, and they will be subject to a lock-up stage ranging from 3 to 18 months. Even at the most extended end of this range, investors can liquidate their stake significantly quicker than a typical venture investment. The liquidity status has also let some investors flip their ICO allocation early, thereby gaining in the process.
- One thing that distinguishes the Telegram ICO is its unique form of cryptocurrency exposure. While the proposed TON itself is a coin, investors are presented with the digital currency market in general, as Telegram is one of the leading sources of communication. However, the exposure varies, as every coin has a Telegram channel.
- Its extent of fundraising is called into question by critics. In a relatively short period, it was able to amass $1.7 billion through two pre-ICO sales. It’s astonishingly fast, as opposed to big fast-growing consumer enterprises like Facebook who took seven years to raise $1 billion, and Uber five years.
- Another reason why critics are calling for discretion is that there is inadequate cryptocurrency experience when it comes to the Telegram platform.
- Another flip side to the Telegram Token is, a report has it that Telegram spent $70 million on server expenses, security, user verification, and employee salaries last year; and this number is going to be on the rise as the team and infrastructure prepare to accommodate the new blockchain platform.
The Telegram token appears to have up-and-coming prospects, particularly with its massive pre-ICO sales. With a team of experienced individuals who are well trained in the communication/consumer industry, it is inevitable that the Telegram token will enjoy massive success. The platform’s pre-ICO sales come at a time when the value of Bitcoin is falling drastically. It also comes at a time when the Securities and Exchange Commission (SEC) is very suspicious of ICOs and Tokens.
There is speculation, however, as the team isn’t well trained in neither cryptocurrency nor blockchain, and therefore, can be an issue for investors. Critics have suggested that the team bring in someone who is a professional in cryptocurrency development to lead the way. Critics have also told the company to create a means by which they can generate income rather than just spending, to avoid bankruptcy soon.