
Inside Telegram’s ambitious $1.2B ICO to create the next Ethereum - abhi3
https://techcrunch.com/2018/01/15/inside-telegrams-ambitious-1-2b-ico-to-create-the-next-ethereum/?ncid=rss
======
wslh
If it looks like a scam, expressed like a scam, and promoted like a scam, then
it probably is a scam.

Let me explain... achieving scale with public and private blockchains is a
difficult computer science problem. Even if Dr. Nikolai Durov [1] is a genius,
he is competing with other geniuses who are at least trying to probe their
points in a more formal way [2]. It is not by chance that it is taking so long
for Vitalik and other researchers to solve the scalability and security issues
in Ethereum. So until other peers don't analyze Dr. Durov results via
adversarial attacks we will not know how real are his claims.

A serious alternative to this ICO would be raising money for a PoC including
hiring other researchers to break the original scheme. For example, before RSA
was finished, Adleman worked on breaking the schemes devised by Rivest and
Shamir until RSA was born [3].

This does not mean that you cannot make money, speculation works in a
different dimension.

[1]
[https://en.wikipedia.org/wiki/Nikolai_Durov](https://en.wikipedia.org/wiki/Nikolai_Durov)

[2]
[https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...](https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz86wDu3zDFF7UtkR0XjGE/)

[3]
[http://teacher.scu.edu.cn/ftp_teacher0/chjtang/teach/adleman...](http://teacher.scu.edu.cn/ftp_teacher0/chjtang/teach/adleman.htm)

~~~
Kelbit
No kidding. Blockchain is the new hotness right now, shouldn't be difficult to
raise a seed round for a crypto startup if your product is genuinely
interesting.

~~~
tehlike
It's not difficult to raise a seed round for crypto startup even if the
product is stupidly boring and useless. It's called an ICO.

------
liamzebedee
> The “TON Blockchain” will consist of a master chain and 2-to-the-power-of-92
> accompanying blockchains

> “Infinite Sharding Paradigm” to achieve scalability

> “Instant Hypercube Routing”

> "it will also use 2-D Distributed Ledgers."

There's no doubt that if you want to make a quick buck, this buzzword-laden
series of claims will attract many greater fools. But the ongoing crypto-
hubris is unattractive to say the least.

~~~
DennisP
I wonder whether the hypercube part is related to Vitalik's idea from 2014:
[https://blog.ethereum.org/2014/10/21/scalability-
part-2-hype...](https://blog.ethereum.org/2014/10/21/scalability-
part-2-hypercubes/)

~~~
wmf
Probably. TON looks like it is trying to combine all the good-sounding ideas
from Bitcoin, Ethereum, Blockstack, Sia/Filecoin, I2P/Tor, etc.

~~~
yyzhero
Hypercube routing seems Similar to hypercast:
[http://www.comm.utoronto.ca/hypercast/overview.html](http://www.comm.utoronto.ca/hypercast/overview.html)

------
sho
The next Ethereum? I'm still waiting for the current ethereum to show any kind
of reason for its existence beyond an admittedly cool tech demo.

I'm not seeing anything in this offering which couldn't be done more easily
and cheaply by a ton (sorry) of other payment options. Notably they say they
want to be WeChat - and they've done it all without any need for blockchains.

~~~
pavlov
I would have to agree about Ethereum being not much more than a tech demo at
present.

A few months back I tried to learn building an Ethereum distributed app, or
"dapp" as they call it. I installed my own Ethereum node to see how that
works.

The Ethereum toolchain is a strange combination of actual JavaScript (command
line tools + REPL to a live node) and a pseudo-JavaScript called Solidity: a
custom language inspired by JavaScript but with abundant new syntax for
developing smart contracts. That doesn't seem like a good idea from a
robustness point of view -- did anyone ever say "I know, I'd like my money to
be handled by immutable JavaScript functions"?!

Still, I can see the mindshare appeal of reaching the widest possible
developer demographic by making everything look "web-like". I would be OK with
that choice if the platform worked as advertised, but it doesn't, and it just
keeps getting worse.

I spent about $100 on deploying my toy dapp's smart contracts, and then I gave
up. Debugging on Ethereum is a nightmare. It seems very easy for a non-obvious
bug that's not caught on the testnet to make a deployed program go into a loop
and burn through all the money you allocated for it. With today's USD/ETH
rate, my failed $100 experiment would have cost $300.

Even if I had got the app deployed, who's going to use it when fees are this
high? Nobody wants to pay $10 to store a piece of data in my dinky little
dapp. The whole concept of dapps is ridiculous with the current Ethereum
implementation.

Ethereum is a victim of its success: the network is congested, fees are
running sky-high, and my Ethereum node has stopped working because of the
exploding demands of storing the blockchain. Realistically there doesn't seem
to be anything the Ethereum founders can do to fix this on the short term,
which means that there will be a painful implosion as the network goes useless
until it's replaced by a new sharded Ethereum (which will naturally come with
its own growing pains).

My conclusion is that Ethereum today is like MongoDB in its first year:
breathless promises of "web scale" are in no way matched by the reality of
what the platform can do... But like Mongo, it's in JavaScript and has a
formidable hype machine, so people will flock in. Eventually things will get
better, I'm sure.

~~~
shp0ngle
I'm not sure why people latch to the javascript thing.

Javascript is to Solidity what C is to Java. It is similar on the very surface
level, but other than some syntax similarity, it's very different.

There is plenty wrong with Javascript and there is way more wrong with
Solidity. But the languages are not very similar

~~~
davidgrenier
I'm not sure the analogy holds. C is a very specific programming language you
can characterise as a byte-array manipulation language. That's a very specific
building block for making software if that building block is what you need,
hence its merit. Java "on the very surface level" has absolutely nothing that
relates to C, modulo some syntax if you think that has a lot of weight.

~~~
bigato
This is exactly the point he was making

------
jakebasile
According to the whitepaper (on page 18) it cost $70m to run Telegram just for
2017 and a total of $171m since 2014. Pavel Durov had a net worth of about
$300m when he left VK in 2014 and as far as I know he's the only source of
funding for Telegram. This seems like one way to change that and hopefully
ensure financial stability, if it works out. I'm not sure it will though,
which is unfortunate as I quite like Telegram.

There's always Wire, I suppose. As long as they stay afloat.

~~~
sAbakumoff
How did you obtain the white paper? AFAIK it's not available publicly yet.

~~~
kirillseva
[https://drive.google.com/file/d/1ucUeKg_NiR8RxNAonb8Q55jZha0...](https://drive.google.com/file/d/1ucUeKg_NiR8RxNAonb8Q55jZha03WC0O/view)

Hopefully I'm not violating any rules by sharing this thing that looks like it
might be TON's leaked whitepaper

~~~
sAbakumoff
Thanks! It seems that this paper is already in hands of TechCrunch(the
currently discussed article) and CoinDesk[1] and now it's available for HN
users :-)

[1] [https://www.coindesk.com/big-money-murky-governance-
kicking-...](https://www.coindesk.com/big-money-murky-governance-kicking-
tires-telegrams-token-sale/)

------
chaostheory
Yes like any other ICO this is risky. However there is a big difference
between this and other crytocoins: there is already a large base of pre-
existing users of Telegram. With TON, Telegram has the potential to become
WeChat outside of China.

~~~
objclxt
> there is already a large base of pre-existing users of Telegram

The base is 180 million MAUs as of December 2017, and they're not growing as
fast as other messaging services have in the past (in Feb 2016 they had 100
million MAUs, so in just under two years that's ~80% growth).

So yes, they have a large base of pre-existing users. But I don't think it is
clear that this base of users is going to continue to grow exponentially, and
they're not growing as fast as they arguably should be.

~~~
chaostheory
I feel that its actual potential utility as a crypto currency platform is more
important than its current position as an IM platform. A better argument would
be to point out what happened with Kik

------
antirez
Why on the earth they don't just do a telegram based digital money without any
block chain but just an N nodes database Geo distributed? So that you can pay
real money to have telecoins (or whatever) and that's all. Oh wait... This
prevents earning 1 billion of dollars to give back monopoly money.

~~~
cornholio
That might work for the intended use-case, but it does not use the blockchain,
therefore it can't benefit from hype and deflationary expectations, so the
"invitation only early investors" can't have exponential profits - the real
motivation for the whole scheme.

------
tromp
The article is rather out of date, stating

> $1.2 billion. That blows any other token sale out of the water, and it would
> easily surpass the current record of $257 million raised by Filecoin

and showing EOS as having raised $200M. In fact, EOS claims to have already
raised over $1.1B and its ICO is still continuing for another 5 months:

[https://steemit.com/eos/@simoncase/eos-announcement-what-
jus...](https://steemit.com/eos/@simoncase/eos-announcement-what-just-
happened)

------
dreit1
I think a serious conversation that needs to be had is that there a lot of
tech companies that can produce a useful service. Twitter, Telegram, Snapchat
etc come time to mind, but they will never generate a profit like a
traditional business.

Does that mean that these services should not exist? Or does it mean there
needs to be a non traditional way of financing to where creators can build the
product and then have a reasonable way of "being done".

Something like Twitter reached a point where it didn't really need more
features. How could it sustain itself without constantly growing and paying
profits to shareholders?

I don't know the answer to this, but it's certainly something that needs to be
discussed, because the unfortunate truth is that there are many good services
that don't make money

~~~
kenning
My hope is that big businesses put a ton of money into creating new products,
and when the space is understood, someone makes an open source version. Then
the consumers of those products start to resent the people making money off of
them and the private thing dies off. There are not really any models of this
though, sadly.

~~~
golergka
First of all, open source versions often are just not as good. I was a fan of
gitlab for personal projects, but after trying it for a couple of months on a
company's project, we moved back to github because of all the bugs and low
perfomance.

Second, who's going to pay for all the servers?

~~~
connorshea
When did you try GitLab, and was it self-hosted or GitLab.com? We've been
working on improving performance, especially on GitLab.com, for the last two
years now. Having started around then I can definitely say it was pretty
miserable back then, but it's infinitely better now.

You can see our infrastructure issue tracker for more info on what we've
worked on over the last few months and what we're doing now:
[https://gitlab.com/gitlab-
com/infrastructure/issues](https://gitlab.com/gitlab-
com/infrastructure/issues)

------
jaequery
If Telegram did $1.2B, Slack must be on pace for a $50B ICO. What a great
world we live in!

~~~
danmaz74
Yes, and Facebook a $bazillion. But at that point, "fiat" will already be a
forgotten relic of the past, so, who cares?

------
lucd
Another next Ethereum ? $NEO is already operational.. $ADA is more promising..

~~~
CryptoPunk
NEO is centralized. But at least it has code.

Cardano has no published code for its smart contract platform, yes somehow it
is the 5th most valuable cryptocurrency. Its hype is based on something that
Ethereum already has under development: a formally verifiable programming
language (and unlike Cardano, the work on formalizing the two programming
languages is being done out in the open). Its website also praises regulations
and implies pretty strongly that only regulated entities will be able to run
consensus nodes for its smart contract platform.

I don't think either has any hope of being the next Ethereum.

------
supermdguy
> It could turn Telegram from a messaging app into a platform that hosts
> internet-based content which could, in theory, operate micro-paywalls that
> let users unlock news or subscriptions for small amounts of crypto payment,
> while there’s also the potential to become a major payment hub.

So... it does pretty much everything? So much for decentralization. Sure, it's
theoretically decentralized, but it's disturbing that Telegram is trying to
both take over so many blockchain applications and retain partial control over
each one.

------
batat
_[citation needed]_

Looks like rumors and disinformation spreaded by Anton Rozenberg - former
Telegram developer. Russian journalists refer to his Facebook post[1]. IIRC,
Rosenberg and Durov had some serious conflict. I've seen article on Medium[2]
(earlier with unblurred screenshots) and Rosenberg seemed to me not quite
adequate person.

[1]
[https://www.facebook.com/id77777/posts/10154846872521076](https://www.facebook.com/id77777/posts/10154846872521076)
(Russian)

[2] [https://medium.com/@anton.rozenberg/pavel-durov-sued-
senior-...](https://medium.com/@anton.rozenberg/pavel-durov-sued-senior-tech-
lead-for-1-7-b24961dec503)

------
simik
Have I missed the link to the actual leaked 132-pages white paper?

------
thebiglebrewski
Would it be wise to invest in this?

~~~
dahdum
On Reddit someone shared a Facebook ad they were getting about this. It's
being hyped like TRON and will likely share a similar fate.

"Today price $0.8 after ICO $50"

[https://i.imgur.com/lxGE0dz.jpg](https://i.imgur.com/lxGE0dz.jpg)

~~~
wmf
Mmmm, securities fraud. Did Telegram just _officially_ say that their token
will go up from $0.80 to $50? Or is Facebook allowing scammers to create fake
official pages?

(On another note, ICO pricing around $1 seems like it will inevitably trigger
the "I can't even afford one coin" effect. Pricing the ICO around one cent
(with 100x more coins outstanding, of course) would give more breathing room.)

~~~
vehementi
They're saying that if you pay them today, you get them for $0.80 as a "ico
pre-sale". Then during the real ICO, coins will be available from them for
$50. Nothing about market price

~~~
akhatri_aus
If they're available for $50 after it means the market price has gone up, if
they can sell them at $50 why can't you? Securities/Tokens are a two way
street not your typical discount aisle.

------
sdddd
I don't think it is good?Okay , I choose the Signal.

