Telegram Investment Analysis


23 July, 2018

In this post we take a look at our investment in Telegram (TON), and quickly walk through the evaluation of that investment using our WIN Framework.

Overview

Telegram is a messaging application which was founded in 2013 in order to preserve censorship resistant communication through the use of encryption. It has quickly grown to around 200 million monthly active users and has become the go-to messaging and group chat application for many cryptocurrency and blockchain based projects. Telegram’s long-term vision includes creating a robust PoS (Proof of Stake) based blockchain called TON - Telegram Open Network, and putting the TON wallet into the hands of their 200 million+ users. This would make TON the most widely distributed crypto asset by a factor of 4-5X.

Telegram

Fundamentals

Telegram has the unique opportunity to leverage their 200 million+ users to give TON a great deal of early adoption. We believe that putting a TON wallet in every Telegram users hands will be a game changer, and allow for the creation of a robust horizontal platform that supports a multitude of applications. All of these applications will be powered by Telegram tokens, also called ‘grams’.

Technicals

The telegram technical whitepaper is extremely detailed and well thought out, although it did have its fair share of detractors. Telegram does not yet have prototypes or working models; however, the way they think about the architecture is sound and tackles several problems that a consumer-facing blockchain will face on a large scale.

The TON blockchain consists of several critical components including:

  • Universal ID - encrypted virtual identity eliminates initial friction for services built on the platform
  • TON Storage - Used to store TON blockchain data and other files uploaded by users and services. This allows applications on the network to store large amounts of data in a distributed and secure manner
  • TON DNS - Assigning human-readable names to smart contracts, accounts and nodes on the TON network (similar to ENS)
  • Sharding - TON leverages sharding to a great extent in order to solve scalability

Conclusion

Telegram has laid out an impressive vision for the TON blockchain, and they aim to have massive distribution by tapping into their existing user base. A majority of their user base is privacy and crypto centric, and therefore we would not be surprised to see a quick uptake of the native token and associated services. Add the strong team of proven founders Pavel and Nikolai Durov, and you have the making of a potentially disruptive platform that will bring crypto asset usage to the masses. Finally, if they are able to successfully complete the $1.7B ICO (they were) we will see a very very well-financed company that will likely figure out a path to success.