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As Telegram plans for another secretive presale fundraising for its TON project, critics are making sharp remarks about the technical details of the project.
Popular messaging app and technology giant Telegram kickstarted the year 2018 with some very big plans of launching a third-generation blockchain network called as Telegram Open Network (TON). There have been many talks about Telegram’s TON network that is supposed to host a complete Ethereum like the ecosystem and will be much bigger in terms of the scale of operations.
It is being said that Telegram will slowly move its messaging app to its decentralized TON network and will also launch its own native cryptocurrency ‘gram’ to support the payments integration in the Telegram app. Additionally, the TON network will also host range of different services, apps and also a store for physical and digital goods.
In order to accomplish its plans, Telegrams aims to raise a total of $3-$5 billion USD of which the company is said to already have raised $850 million in pre-sale “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes”, according to the official document released by the SEC last week. Telegram CEO Parel Durov is said to have convinced over 81 accredited investors that include giants from the Silicon Valley like Benchmark and Sequoia Capital.
Now reports are that Durov is also planning for a second secretive pre-ICO sale which aims to raise exactly the same amount as the first one thereby already gathering a whopping $1.6B to its kitty before the ICO even opens to the general public. However, Telegram has itself declined to comment anything regarding this development at the point, but sources familiar with the matter said that the investors have received an email for it, says The Verge.
However, many critics have pointed out that Telegram is currently just cashing it on its image without actually releasing the technical details of its TON project. This makes the critic say that such a high price in demand is majorly due to hype and speculation value behind the technology.
Charles Noyes, a fund manager at VR firm Pantera Capital says that his firm remains quite skeptical about the use of funds and have pulled back from the offer. He believes that the funds could possibly be used for day-to-day operations of the company rather than being used in the project. Noyes said: “My primary concern with it is that in the first offering institutions are seriously looking at, they’re promising something that will somehow be radically better than everything else out there, with no real explanation of how that will happen or outside scrutiny of those claims.”
He further added that “It’s very important in blockchain technology and specifically cryptocurrencies that you be very open with what you’re trying to do and have as many people as possible looking at it to see if they can find a flaw. When you operate the way they do, which is closed, with secrecy, not subjecting yourself to peer review, you basically open yourself up to the possibility that there is a trivial bug in it that destroys the network.”
The Verge recently has a word with Christian Catalini, a professor and founder of MIT’s Cryptoeconomics Lab who along with this team is currently studying about 1,500 ICOs. Catalini said: “We actually document in our research paper that there has been a major transition from more technical white papers to the kind of white papers that look a lot more like sales pitches. There’s been less focus on technical details over time and, for some of these, much more on selling the vision. In the case of the Telegram one, there is a lot that is being promised and not a lot of clarity on how that would be delivered.”
A similar reaction on the white paper came from Matthew Green, cryptographer and professor at Johns Hopkins University, who, in an email said: “So to their credit, Telegram has shown that it can execute and get software written. That’s actually a big deal when it comes to blockchain projects. That plus millions of dollars means they could pull something off. But I’ll be honest, the white paper reads like someone went out on the internet and harvested the most ambitious ideas from a dozen projects and said ‘let’s do all of those but better!’ It feels unachievable, at least at the scale they’re aiming for now.”
As per the earlier proposed plans, of all the total ‘gram’ tokens on the TON system, Telegram will be holding around 52% stake, 4% will be given to the employees and the rest will be made available to the public.