By David Drake
Early this week, reports emerged that messaging app, Telegram, will be launching an initial coin offering (ICO) to fund its blockchain-backed network, Telegram Open Network (TON). With a target of raising $1.2 billion, Telegram is set to run the largest token sale in the history of ICOs. Industry players note that should this ICO succeed, it will send a strong message about the potential of blockchain technology.
“In light of spectre, if Telegram, after Sirin Labs, will raise tons of money via ICO, it will be the ultimate demonstration that ICO success is totally decouple from value added and just aligned with marketing budget,” says Rufo Guerreschi, CEO & Cofounder of TrustLess.
Unlike most other companies, Telegram is getting into the cryptocurrency space with a strong crowd approval. The messenger app already has 180 million users, a following that is likely to make its token, Gram, highly competitive. But this isn’t the only thing working for Telegram. Of great importance is the timing which seems perfect, even highly favorable. This is because the company is launching an ICO at a time when cryptocurrency communities are most active.
“Telegram has one important thing ready to be capitalized by its new Gram cryptocurrency, namely one of the largest and most active blockchain communities. This fact makes Gram coin possibly one of the strong rivals for such established crypto communities as Ripple or bitcoin,” notes Dr. Vladislav Rutskiy, Associate Professor in Economics, Siberian Federal University (Russia) and the Investor Relations Manager at Descrow.
As Telegram prepares to integrate blockchain in its payment system, some industry players see its entry into the crypto market as one that will boost competition with other blockchain-based payment platforms, like Ripple.
Shaun Dindial, LDJ Capital Investments Managing Director notes, “There will always be a new competitor looking to take market share from the market leader. While Ripple is loved because of its transparency, this could be a contender.”
But as Matt Nolan, Founder of Menlo, says, its very early to tell whether Telegram will succeed in competing with other cryptocurrencies. However, its decision to go the ICO way is a strong indication of what the future holds for blockchain technologies.
“It’s too early to say if Telegram will have adoption of Bitcoin. But ICOs from established, previously funded companies like Telegram have, which is a strong sign that blockchain is the future of how businesses will be financed. We’re building a decentralized network which enables investors to get in early in ICOs like this one,” Nolan says.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.