Telegram messaging app transforms into blockchain innovator
Telegram launched as a simple messaging app in 2013. Today, it’s a major player in the cryptocurrency space, integrating the TON blockchain.
When brothers Nikolai and Pavel Durov founded Telegram, the startup quickly gained popularity for its emphasis on privacy and speed.
In the subsequent years, Telegram underwent a transformation: changing from a communication tool to a key platform for crypto users and applications.
In this article, we will retrace Telegram’s journey, from its initial foray into blockchain technology with the TON Blockchain to its legal battles with the U.S. Securities and Exchange Commission and its current influential role in the crypto community.
Telegram origins and shift to crypto
As stated earlier, Telegram started as a messaging app — touted for its strong security features and user-friendly interface. It utilized encrypted chats and large group chats.
Telegram’s introduction of bots in 2015 marked a significant milestone. This allowed the app’s users to automate tasks, manage groups, and even facilitate complex interactions.
As the platform grew, Telegram introduced voice calls in 2017 and video calls in 2020, further enhancing its communication capabilities.
Its evolution continued with the launch of channels, which provided a new way for users to broadcast messages to large audiences. This tool was further enhanced with stories for channels, a feature allowing users to share fleeting content with unique dual-camera functionality and detailed privacy settings.
It also introduced a transparent and fair giveaway system within channels, enabling users to win real-world prizes.
However, the Durov brothers had a grander vision for Telegram beyond messaging. They sought to create a decentralized platform that could change the way people handled digital transactions and communications.
This vision led to the creation of the Telegram Open Network blockchain. The goal was to build a high-performance blockchain capable of processing millions of transactions per second while integrating seamlessly with Telegram’s messaging platform.
The project promised to introduce new features such as decentralized applications, smart contracts, and a native cryptocurrency, Gram.
Developing the TON blockchain
The TON Blockchain began in earnest when Pavel Durov released a whitepaper in 2018 outlining its technological advancements and potential.
Originally envisioned to integrate cryptocurrency and blockchain features into the Telegram ecosystem, TON’s creators designed it with scalability in mind. It was meant to handle millions of transactions per second, a feat it aimed to achieve through a unique multi-blockchain architecture and sharding mechanism.
The mechanism splits the blockchain into a master chain, which manages the overall network, and multiple work chains, each capable of operating independently.
To actualize this dream, Telegram sought to raise funds through an initial coin offering. Before that, the company raised about $1.7 billion from 175 investors in a private sale of its native Gram token.
However, the success was short-lived. Soon after the presale, the U.S. Securities and Exchange Commission cast its regulatory eyes on the platform.
Legal battle with the SEC
In October 2019, the SEC filed a complaint against Telegram, alleging that the company had conducted an unregistered securities offering by selling Gram tokens. The commission argued that those tokens were securities and should have been registered under U.S. securities laws.
The legal battle culminated in a landmark decision in March 2020 when a U.S. federal court ruled in favor of the SEC, halting the distribution of Gram tokens.
As a result, Telegram postponed and eventually abandoned the project in May 2020. It also agreed to return the money raised in the pre-ICO event to investors and pay an $18.5 million civil penalty.
Telegram felt the impact of this decision, which also sent shockwaves through the broader crypto industry, highlighting the regulatory challenges blockchain projects face.
Once Telegram stepped back, a group of independent developers picked up the slack and continued to build TON, now renamed The Open Network. This ensured the project’s survival.
Its development is now supported and guided by a non-profit organization, the TON Foundation, based in Zug, Switzerland. Steve Yun serves as the president of the TON Foundation, while Andrew Rogozov, former CEO of Russian social media site VK, is a founding member.
Throughout 2021 and 2022, the TON community focused on improving the network’s architecture, implementing dynamic sharding, and refining its proof-of-stake consensus mechanism.
Telegram’s continued support and integration
While no longer the architect of the development of TON, Telegram has continued to support the platform. For instance, in September 2023, the messaging app, with more than 800 million users at the time, integrated the TON Space self-custodial wallet.
This integration was followed by an introduction to an ad revenue-sharing system this past March, where payments are made exclusively in Toncoin (TON), the successor of Gram, thereby fostering further engagement with the TON ecosystem.
In September 2023, Telegram officially endorsed TON, declaring the blockchain and its associated token as the app’s “official web3 infrastructure.” This move has sparked investor interest and led to substantial gains for the TON token.
As a result, the total value locked on TON surpassed $300 million on May 27, 2024, marking a significant milestone fueled by a community rewards program from the TON Foundation.
Telegram’s current role in crypto
Seemingly putting its disappointment at not being able to build the TON network by itself, Telegram has continued to play a pivotal role in the crypto space. The messaging app has become a central hub for the crypto community, providing a platform for discussion, collaboration, and information sharing.
Telegram groups and channels are widely used for announcements, trading signals, and community building within the crypto ecosystem.
Additionally, the platform’s influence in the crypto space has been further solidified by its recent introduction of new features that cater to crypto users, such as a digital marketplace within the app and integrations with popular wallets like Trust Wallet.
Telegram’s collaboration with Trust Wallet will enable the crypto wallet to leverage the messaging app’s vast user base, focusing on gaming finance and dapps. It will also reportedly allow Trust Wallet’s 100 million users to send and receive TON tokens.
Furthermore, TON announced it would soon support Tether (USDT) tokens on its blockchain, allowing Telegram users to send the stablecoin within the app.
News of that particular development boosted TON’s value, pushing it up to $7.63 on April 11 from approximately $2.21 a year ago, according to CoinGecko data.
At the time of this writing, a TON token was going for $5.46, giving the cryptocurrency an overall value of $13.7 billion and making it the tenth-biggest digital asset by market cap, just behind Dogecoin (DOGE).
Rise of mini-apps and the tap-to-play ecosystem
On July 31, Telegram announced it was rolling out a new in-app browser, expanding its blockchain capabilities and user experience. The announcement followed the introduction of a mini app store earlier in the month by CEO Pavel Durov.
This new browser will enable Telegram’s vast user base to access TON sites, a platform for decentralized websites. The Telegram co-founder highlighted that the browser offers features akin to traditional web browsers and integrates web browsing with messaging.
Additionally, you can access the Telegram mini app store through the app’s search feature. According to the announcement, 500 million of Telegram’s 950 million users interact with mini-apps monthly, and they can now find all their mini-apps in one consolidated location.
The ecosystem also introduces “Stars,” a new in-app payment unit launched on June 7. Users can send Stars to friends and use them for transactions within mini-apps, which can later be exchanged for Toncoin.
Telegram’s mini-apps have been quite successful. Popular applications like Notcoin (NOT) and Hamster Kombat attract millions of users worldwide. In Notcoin, users earn tokens by completing social challenges. The game has amassed more than 35 million users in five months and had a $1.15 billion market cap at the time of writing.
Hamster Kombat, a crypto exchange management simulation game, is no slouch either. It has become one of the fastest-growing web3 applications, reportedly boasting over 300 million users since its launch in March 2024.
The project plans to launch a significant airdrop for its native token, HMSTR, on the TON network, an exercise it described as the “largest airdrop in the history of crypto.”
As reported by crypto.news, Hamster Kombat plans to distribute at least 60% of the HMSTR supply to players of the game on Telegram.
Another noteworthy mini-app, Catizen, launched alongside Hamster Kombat, has attracted over 27 million active users. This success led to investment in the app’s publisher, Pluto Studio, from HashKey Capital, a Hong Kong-based crypto venture firm.
However, despite the excitement, some delays have caused frustration among users. The highly anticipated token airdrops for HMSTR and Catizen’s CATI tokens were expected to launch on the TON blockchain in July but have both been postponed.
Catizen cited planning challenges, including securing exchanges, ensuring liquidity, and compliance issues, as reasons for the delay. Similarly, Hamster Kombat explained that the complexity of the technical task has pushed back its token release.
Looking ahead
Telegram’s foray into the crypto and digital assets market is a testament to its vision of becoming a comprehensive digital ecosystem. With its approach to monetization and the success of its mini-apps, the messaging platform is positioning itself to continue its growth in the crypto space.
It also seems like Telegram is planning an initial public offering. In his first interview since 2017, Pavel Durov revealed plans for the messaging app’s financial future, including a potential IPO.
Additionally, Durov told the Financial Times on March 11 that Telegram aims to become profitable by 2025, if not sooner.
Since 2021, Telegram has raised $2 billion through bond issues, with bondholders reportedly set to receive a 10-20% discount on the IPO if it occurs before March 2026.
Telegram’s journey from a messaging app to a significant player in the crypto space is a testament to its ability to adapt and innovate. Despite facing regulatory challenges and setbacks, it has remained a vital platform for the crypto community.
