Social and Crypto: Telegram's Next Decade

23-08-31 11:19
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In August 2023, Telegram celebrated its 10th anniversary. In addition to celebrating its monthly active users exceeding 800 million, Telegram highlighted the Story feature on its anniversary day. This is a feature for sharing dynamic videos and pictures with contacts, similar to the feature on Instagram, a social media platform owned by Meta.


There are indications that "Paper Plane", which started with security and privacy, seems to be breaking free from gravity and flying higher.


One day in 2012, Telegram founder Pavel Durov and employees from his former company VK threw paper airplanes made of banknotes to passersby in front of their office window in the busiest area of St. Petersburg.


For users familiar with encryption, the prevalent bot services on Telegram are currently very popular. Among them, the most well-known and highest-valued project is Unibot. This bot product has been listed for less than half a year, but its market value has already exceeded 150 million US dollars. With its roots in Telegram and a broad potential user base, as well as its simple and convenient usability, Unibot has won over many encryption users.


What its supporters like to talk about the most is the narrative that "Unibot is 100 times better than the largest wallet application in the current market, Metamask, or with 800 million users on Telegram, Unibot's Mass Adoption will surpass Metamask and the like."


Why do so many people have high expectations for products on Telegram? The reason is simple. Telegram, with its extensive user base and sufficient openness, is an untapped virgin land.


As founder and CEO Pavel Durov wrote in the 10th anniversary letter, just as.


In just 10 short years, Telegram has gained over 800 million active users through word of mouth alone.

......

Telegram's next step is to go beyond messaging and lead innovation in social media. We should use our popularity to improve the lives of billions of people, inspiring and uplifting people on Earth.

Although the past 10 years have been exciting, the next 10 years will be when Telegram truly unleashes its potential.


Super Applications


In recent years, Telegram's attempts to transition from a communication protocol to a broader social platform have not stopped. With the launch of the paid Premium subscription service in June 2022, Telegram's product updates have quickly entered the fast lane of iteration.


Starting from 2022, the speed of Telegram product updates has significantly increased, with a focus on social aspects.


Not only did Telegram recently launch a Story video sharing feature that competes with Instagram, but in June 2022, it also introduced a Premium subscription service that offers value-added services to Premium users. Additionally, Telegram has revamped its emoji system, launched a blockchain-driven anonymous number login feature, and introduced Topic functionality, which directly competes with Discord's multi-group management feature.


It seems that both Instagram and Discord, as well as other excellent social media platforms both domestically and abroad, have features that Telegram also covers. Moreover, Telegram is learning from WeChat and attempting to complete a triple jump from communication protocol to social platform, ultimately becoming a super app based on its extensive user base.


Thanks to the open source nature of the Telegram client, various rich SDKs, and the comprehensive Bot API provided by the official, countless developers can create their own service robots and compete freely with the official application. Users can easily find various service functions such as music, movies, books, and games on Telegram.



The TON Foundation, closely related to Telegram, launched the Telegram Apps Center in August this year, integrating various applications from games, wallets to practical tools in Telegram.


Telegram's "Dark History"


Telegram and cryptocurrency seem extremely similar, both born from humble beginnings and even used for illegal purposes in the early days; looking to transition towards open and transparent large-scale applications as their goal. Not only that, Telegram also once chose to issue its own cryptocurrency - during the ICO boom in 2017, Telegram planned to develop the next generation blockchain platform TON (Telegram Open Network) and intended to name its cryptocurrency Gram. However, the good times did not last, and TON, which raised over $1.7 billion, was eventually halted due to US regulatory intervention.


Telegram did not go public like social media giants Meta and Tencent. Instead, it chose to issue its own cryptocurrency for a reason: founder Pavel Durov's unwavering stance on freedom of speech and privacy protection, which can be seen from his early experiences.


At a young age, Pavel Durov, who has already shown remarkable programming talent, and his genius brother - Nikolai Durov, who has won multiple gold medals in mathematics and information Olympics, founded the most popular social networking site in the Russian-speaking world, VKontakte (VK for short). Although it was inspired by Facebook, VK is the only product that has surpassed Facebook in the free market competition.


With the expansion of VK's influence and the intensification of factional struggles in Russia at that time, the Russian government requested VK to close social pages opposing the government for the sake of stabilizing public opinion. Pavel firmly refused to comply with this request.


In order to uphold freedom of speech and not compromise, Pavel had to flee Russia. Even so, in the end, Pavel was forced to hand over VK - by selling VK's shares, the ownership of VK was eventually resold to a company closely related to the Russian government. It is rumored that Pavel received hundreds of millions of dollars in the sale of shares transaction.


Pavel Durov's early response to the attempt to acquire VK


Telegram, on the other hand, was inspired by Pavel's experience of battling with the Russian government during his time at VK. In an emergency situation, Pavel suddenly realized that all of his communication methods, including phone calls and emails, could be monitored by the government.


Telegram's successful technical foundation comes from the underlying encryption protocol MTProto developed by Pavel's brother Nikolai and a group of top geeks. At the same time, Pavel's competition with Mark Zuckerberg has shifted from social media to communication protocols - Facebook acquired WhatsApp in February 2014. Today, Telegram and WhatsApp still often argue about privacy issues.


Even though the plan to issue coins for operational funding was halted by the US government, Telegram has never forced users to pay. In the early days, Telegram's operational funding mainly came from the personal wealth of the two Pavel brothers. As the user base continued to grow and product features were upgraded, Telegram's operating costs skyrocketed, and Pavel ultimately chose to finance Telegram through bonds.



Telegram has received two rounds of external funding since 2021. The first round was in March 2021, when Pavel announced the sale of bonds to raise over $1 billion. The second round was in July 2023, when Pavel announced that Telegram had issued $270 million in bonds to maintain operations, with Pavel himself purchasing 25% of them. In the announcement, Pavel also revealed two important pieces of information: Telegram gains 2.5 million new users daily, and Pavel himself does not own any real estate or private jets, but only "owns" Telegram, some bitcoins, and Toncoin.


Telegram's encrypted landscape


Emulating Meta and WeChat to create social media and more open super apps can only be considered as a superficial effort, while introducing and promoting encryption is the real killer move.


明修栈道,暗渡陈仓


"明修栈道,暗渡陈仓" in English is "Mingxiu zhandao, andu chencang". The phrase means to make a show of strength while hiding one's true intentions, or to use diversionary tactics to achieve one's goals.Although Telegram's official blockchain platform Ton Network was declared over in 2020, at the end of 2021, Pavel Durov suddenly posted on his personal Telegram channelhere to announce something.


I saw that the champions of the Telegram programming competition are continuing to develop the open-source TON project and have rebranded it as Toncoin. This is very encouraging.

......

Toncoin is different from the original TON, and it is independent of Telegram. But I hope their team can achieve the same success.」

Note that Toncoin is The Open Network's token for TON.



This statement is one of the efforts endorsed by Telegram for the TON project, and this speech has also received more than 7 million views, far exceeding the daily data of Pavel's channel.


Later, TON accompanied Telegram in a way that was not official but seemed official.


In 2022, Telegram launched a domain name system based on the Ton Network and plans to auction Telegram usernames in the form of NFTs, settling with TON tokens. Telegram, which advocates for freedom, even used centralized and mandatory means in the process of promoting a decentralized domain name system.



According to messages from users on Twitter and V2EX, Telegram has unexpectedly reclaimed inactive accounts and some premium usernames used for public channels. One user whose username was reclaimed stated that "no one wants to pay around $160 for a Telegram username." However, he clearly underestimated the enthusiasm of the cryptocurrency industry, as multiple usernames have already been sold for over $2 million.


Data source: statista, unit 1000 US dollars


In October of the same year, Pavel personally participated and, together with four others, built a decentralized auction platform called Fragment based on TON in just five weeks. Not only usernames, but also anonymous numbers and Premium features launched by Telegram were also available on the Fragment platform, and TON token payments were supported.



The non-custodial wallet, Wallet (TON Space), built into Telegram, will be launched in August 2023. Currently, it supports three currencies: USDT, BTC, and TON.


As a highly anticipated financial settlement method in Telegram, the built-in non-custodial wallet not only ensures security, but also eliminates the hidden risk points of introducing third-party payment settlement platforms for Telegram. Additionally, it unlocks the financial attributes of the Telegram platform itself, delivering financial security and freedom to more users. This greatly increases the composability and user stickiness of Telegram's features.


祛魅 The Open Network


QuMei The Open Network


As for the closeness of the relationship between Telegram and TON, perhaps only Pavel and his inner circle can fully understand it.


According to drawesomedoge, a member of the former TON core development team, we can outline some details about the development of TON and the TON token.


New Ton, formerly known as TON, has a core development team of 13 members from Slavic-speaking countries such as Russia and Ukraine. After the initial official announcement of TON's discontinuation, the team continued to maintain and develop the project, and received Pavel's recognition at the end of 2021. With the rise of New Ton, another branch called Free TON chose to leave and renamed itself Everscale, and also changed its programming language.


As for the distribution of TON tokens, it is even more mysterious. Generally speaking, TON tokens have already been distributed through Proof of Work (PoW) mining, and the information of the vast majority of token owners is basically unknown.


According to drawesomedoge, among the total of 5 billion tokens in TON, around 100-200 million were allocated to the earliest developers. The remaining tokens were divided into 4.7 billion and 100 million, and were mined through two Proof of Work (PoW) smart contracts. The majority of the 4.7 billion TON tokens were mined in the two to three months in the second half of 2020.


And information from the TON official website indicates that,


For the purpose of avoiding the team's work stoppage from affecting the project's development, and also to allow enthusiasts to continue researching the technology, the Telegram team has placed all available tokens in the network into a smart contract, which can be mined fairly by anyone.


In June 2020, all Toncoin tokens that can be circulated (98.55% of the total supply) were made available for mining. Subsequently, the mining code was released on code repositories, and tutorials on how to mine were published on the project website. At that time, the blockchain was still in the testnet phase, and the tokens had no value and could only be used for testing purposes.


On June 28, 2022, the last Toncoin was mined, marking the successful completion of TON's initial distribution.


Currently, TON has transitioned to Proof of Stake (PoS) and is increasing its supply at a rate of 0.6% per year, which is approximately 30 million TON per year.


The allocation mystery of TON is like the sword of Damocles, hanging over the heads of all enthusiasts. As for who took the largest portion of TON, drawesomedoge believes it may be early developers and enthusiasts. He also mentions a noteworthy point that the TON Foundation holds more tokens than the core TON developers.


Here we have to mention the TON Foundation, which is responsible for finance and marketing, among other non-development work, and can be said to be one of the few tangible organizations exposed to the outside world in TON. According to drawesomedoge's speculation, the founding members of the TON Foundation may be early investors in Telegram. At the same time, according to LinkedIn data, many members of the TON Foundation are located in Dubai, which is also the rumored location of Telegram's headquarters.


Among the founding members of the TON Foundation, we also found Andrew Rogozov, the former CEO of VK founded by Pavel. Andre worked at VK for 7 years and resigned as VK CEO in 2021, which is also a critical time for the launch and mining distribution of TON tokens. The aggregated information inevitably raises suspicions about whether all of this is a shell game implemented by Pavel to avoid US regulation.


Wild Growth of Cryptographic Services


Compared to Telegram's "progeny" TON, Telegram is known as the most encryption-friendly platform, famous for its various encrypted communication groups, bots, and announcement platforms. A large number of real users migrated from Slack and WeChat groups have brought Telegram a lot of fresh and high-quality users, as well as various news, CEX announcements, large transfer notifications, daily push services, and more. In short, Telegram has the two things that the major Layer 1 networks need the most - users and developers.


Innovation flourishes from this open and vibrant soil.


Although Telegram's core functions are not developed for third-party developers, transactional bots that simplify user operations and directly interact with blockchain networks such as Ethereum through command instructions are still popular. They not only have a wider spread than TON, but also have strong data support. On August 26th, the trading volume of Unibot accounted for 2% of the entire Uniswap, which is a reference to Uniswap's absolute leadership in the DEX field. Through Unibot's trading volume, it may surpass some DEX supported by famous VCs.


Not only is the trading volume high, the revenue of such tool products is also considerable. According to the statistics of Twitter user Ximi Sammi's analysis, the leading player in the field, Unibot, is expected to earn over $6 million in monthly revenue through the token's transaction tax and trading fees. MaestroBots relies entirely on subscription fees and trading fees, with a monthly project revenue of over $4 million.


And the resulting Telegram Bot craze has led to a variety of Bot services in this field, including leveraged contracts, sports event prediction markets, airdrop scams, and derivatives. The cryptocurrency data analysis website Coingecko has even added a Telegram Bots category, with over 100 projects included and a total circulating market value of over $250 million.


Whether it's TON or other Telegram-based bot products, they are important drivers of market vitality and imagination, promoting mass adoption. As TON ecosystem enthusiast Jerry said, "A product with 800 million monthly active users doesn't need a portrait, it has everything you want."


With a massive user base and continuous growth, Telegram is leveraging encryption to expand its reach in both the social and encryption industries.


Telegram took 10 years to tell users what an independent secure communication protocol is, and what Telegram is doing and will do, it is difficult for other giants in the same level to learn.


Reference reading:

"Telegram founder releases open letter, decides to end blockchain project TON due to regulatory issues (full text of the open letter included)"
"Data platform Statista: Rethinking Telegram, not only a social platform but also an e-commerce platform"
"Telegram founder Durov brothers' biography, the rebellious road of a genius teenager"


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