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encrypted messaging service Telegram is seen during a news conference last July
Image: Encrypted messaging service Telegram is seen during a news conference last July. Antara Foto/Muhammad Adimaja via REUTERS

Telegram Announces Intentions for Cryptocurrency ICO

Image: Encrypted messaging service Telegram is seen during a news conference last July. Antara Foto/Muhammad Adimaja via REUTERS

The encrypted messaging startup has revealed its intentions to roll out a native currency on its own blockchain platform. These will allow its chat app users to make payments on the application as well as elsewhere.

Telegram Open Network

A number of sources have described the Telegram Open Network (TON) as the new form of “third generation” blockchain employed by Telegram. It will reportedly provide improved capabilities based on the foundation laid by Bitcoin and Ethereum’s own blockchain designs.

The launch will receive its funding by way of a sizeable Initial Coin Offering (ICO). Private pre-sales are expected to skyrocket into the hundreds of millions. Should this occur, it will be able to include itself among the largest ICOs that have taken place so far.

The demand for the Telegram cryptocurrency has a great deal to do with the fact that Telegram is an established company and messaging platform. This sets it apart from other cryptocurrencies which have been launched by startups. The Telegram messaging app is used by people worldwide.

The Independence of Cryptocurrencies

Telegram stands to see sizeable benefits by rolling out its own cryptocurrency as it will provide its payment system with considerable independence from any bank or even government. This freedom holds a great deal of appeal to Pavel Durov, the company’s CEO and co-founder. Durov is known for seeking this level of independence following his experience with his last company. Prior to Telegram, Durov’s VK was a social network in Russia which was taken over by investors.

Founder and CEO of Telegram Pavel Durov delivers a keynote speech during the Mobile World Congress in Barcelona
Image: Founder and CEO of Telegram Pavel Durov delivers a keynote speech during the Mobile World Congress in Barcelona, Spain February 23, 2016. REUTERS/Albert Gea

With this type of freedom, a broadly used messaging app has massive potential when it contains a cryptocurrency. It means that users would be able to sidestep remittance fees when they complete transactions such as funds transfers to recipients in other countries, as well as when they move private money. The app’s encryption would protect them from that. Moreover, they could also make micropayments that would otherwise involve prohibitive credit card fees, among other benefits.

Telegram has already become the go to global cryptocurrency communication channel. This foundation has made it a natural environment for its own blockchain and cryptocurrency.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.