Telegram launched in 2013 as a simple messaging app. Today, Telegram has established itself as a major player in the cryptocurrency space by integrating the TON blockchain.
When brothers Nikolai and Pavel Durov founded Telegram, the startup quickly gained popularity for its focus on privacy and speed.
Over the years, Telegram has changed, transforming from a communication tool to a major platform for cryptocurrency users and applications.
In this article, we look back at Telegram’s journey, from its initial foray into blockchain technology with the TON blockchain, to its legal battle with the U.S. Securities and Exchange Commission, to its current influential role in the cryptocurrency community.
The origins of Telegram and its transition to cryptocurrency
As mentioned earlier, Telegram started out as a messaging app known for its strong security features and user-friendly interface. It utilized encrypted chats and large group chats.
Telegram’s introduction of bots in 2015 was a major milestone, allowing app users to automate tasks, manage groups, and even facilitate complex interactions.
As the platform grew, Telegram further enhanced its communication capabilities by introducing voice calls in 2017 and video calls in 2020.
The evolution continued with the launch of Channels, which gave users a new way to broadcast messages to large audiences. This tool was further enhanced with Channel Stories, which allows users to share ephemeral content with unique dual camera features and detailed privacy settings.
We also introduced a transparent and fair prize system within the channel, allowing users to win real prizes.
But the Durov brothers had a bigger vision for Telegram than messaging: They wanted to create a decentralized platform that could change the way people transact and communicate digitally.
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 being fully integrated with Telegram’s messaging platform.
The project promises to introduce new features such as decentralized applications, smart contracts, and its native cryptocurrency, Gram.
TON Blockchain Development
The TON blockchain got its start in 2018 when Pavel Durov published a white paper outlining its technological advancements and potential.
Originally conceived to integrate cryptocurrency and blockchain functionality into the Telegram ecosystem, TON’s creators designed it with scalability in mind. It is intended to handle millions of transactions per second, which they hope to achieve through a unique multi-blockchain architecture and sharding mechanism.
This mechanism splits the blockchain into a master chain that governs the entire network and several working chains that can each operate independently.
To make this dream a reality, 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 own Gram tokens.
But the success was short-lived. Shortly after the pre-sale, the U.S. Securities and Exchange Commission turned its regulatory gaze to the platform.
Legal Battle with the SEC
In October 2019, the SEC filed a complaint against Telegram, alleging that the company conducted an unregistered securities offering by selling Gram tokens. The commission argued that the tokens were securities and should have been registered under U.S. securities laws.
This legal battle culminated in a landmark ruling in March 2020 when a U.S. federal court ruled in favor of the SEC and halted the distribution of Gram tokens.
As a result, Telegram postponed and eventually discontinued the project in May 2020. It also agreed to return the money raised in the pre-ICO event to investors and pay a civil penalty of $18.5 million.
Telegram felt the impact of this decision, which sent shockwaves through the broader cryptocurrency industry and highlighted the regulatory challenges blockchain projects face.
When Telegram stepped down, a group of independent developers stepped in and continued building TON, now renamed The Open Network, ensuring the project’s survival.
The development is currently supported and guided by the TON Foundation, a non-profit organization based in Zug, Switzerland. Steve Yun is the president of the TON Foundation, and Andrew Rogozov, former CEO of the Russian social media site VK, is a founding member.
During 2021 and 2022, the TON community focused on improving the network architecture, implementing dynamic sharding, and improving the proof-of-stake consensus mechanism.
Ongoing support and integration with Telegram
Telegram is no longer the architect of TON development, but it continues to support the platform. For example, in September 2023, the messaging app with over 800 million users integrated TON Space’s own custodial wallet.
Following this integration, an advertising revenue sharing system was introduced in March, where payments are made exclusively in Toncoin (TON), the successor to Gram, further expanding participation in the TON ecosystem.
In September 2023, Telegram officially endorsed TON, declaring the blockchain and associated tokens as the app’s “official web3 infrastructure.” This move sparked investor interest and led to significant gains in TON tokens.
As a result, the total value locked in TON will surpass $300 million on May 27, 2024, marking a significant milestone achieved through the TON Foundation’s community rewards program.
Telegram’s Current Role in Cryptocurrency
Despite the apparent disappointment over not being able to build the TON network on its own, Telegram has continued to play a significant role in the cryptocurrency space. The messaging app has become a central hub for the cryptocurrency community, providing a platform for discussion, collaboration, and information sharing.
Telegram groups and channels are widely used within the cryptocurrency ecosystem for announcements, trading signals, and community building.
Additionally, the platform’s influence in the crypto space has been further strengthened with the recent introduction of new features for cryptocurrency users, including an in-app digital marketplace and integration with popular wallets such as Trust Wallet.
The collaboration between Telegram and Trust Wallet will allow the cryptocurrency wallet to leverage the messaging app’s massive user base to focus on gaming finance and dapps. It will also reportedly allow Trust Wallet’s 100 million users to send and receive TON tokens.
TON also announced that it will soon support Tether (USDT) tokens on its blockchain, allowing Telegram users to send the stablecoin within the app.
According to CoinGecko data, this particular development caused TON’s value to skyrocket, from around $2.21 a year ago to $7.63 on April 11.
At the time of writing, TON tokens were selling for $5.46, which put the total value of the cryptocurrency at $13.7 billion, making it the tenth largest digital asset by market cap, behind Dogecoin (DOGE).
The rise of mini-apps and the tap-to-play ecosystem
On July 31, Telegram announced the launch of a new in-app browser that expands its blockchain capabilities and user experience. This announcement follows CEO Pavel Durov’s introduction of a mini-app store earlier this month.
The new browser will give Telegram’s massive user base access to the TON site, a platform for decentralized websites. Telegram’s co-founder emphasized that the browser will offer similar functionality to traditional web browsers, integrating web browsing with messaging.
You can also access the Telegram mini-app store via the app’s search function. According to the announcement, 500 million of Telegram’s 950 million users interact with mini-apps every month, and now you can find all of them in one unified place.
The ecosystem also introduces a new in-app payment unit called “Stars”, which was launched on June 7. Users can send Stars to friends and use them for transactions within the mini-app, which can later be exchanged for Toncoin.
Telegram’s mini-apps have been very successful. Popular apps like Notcoin (NOT) and Hamster Kombat have attracted millions of users worldwide. In Notcoin, users earn tokens by completing social challenges. The game has attracted over 35 million users in just five months and has a market cap of $1.15 billion at the time of writing.
Hamster Combat, a cryptocurrency exchange management simulation game, is not far behind. It has become one of the fastest-growing web3 applications, boasting over 300 million users since its launch in March 2024.
The project plans to initiate a significant airdrop of its native token, HMSTR, on the TON network, which it describes as “the largest airdrop in cryptocurrency history.”
According to a report by crypto.news, Hamster Combat plans to distribute at least 60% of the HMSTR supply to Telegram game players.
Another notable mini-app released alongside Hamster Kombat, Catizen, has attracted over 27 million active users. This success led to Hong Kong-based crypto venture HashKey Capital investing in the app’s publisher, Pluto Studio.
However, despite this excitement, some delays have caused frustration among users. The highly anticipated token airdrops of HMSTR and Catizen’s CATI tokens were scheduled to launch on the TON blockchain in July, but both have been delayed.
Catizen cited planning challenges, including securing exchanges, ensuring liquidity, and regulatory compliance issues, as reasons for the delay. Similarly, Hamster Kombat explained that the complexity of the technical work delayed the token launch.
Future Prospects
Telegram’s entry into the cryptocurrency and digital asset markets is a testament to its vision to be a comprehensive digital ecosystem. With its approach to monetization and the success of its mini-apps, the messaging platform is positioned to continue its growth in the crypto space.
Telegram appears to be planning an initial public offering (IPO). In his first interview since 2017, Pavel Durov has laid out his plans for the messaging app’s financial future, including a potential IPO.
Durov also said in an interview with the Financial Times on March 11 that Telegram aims to become profitable as early as 2025.
Telegram has raised $2 billion through bond issuances since 2021, and bondholders will reportedly receive a 10-20% discount if the IPO takes place before March 2026.
Telegram’s journey from messaging app to major player in the crypto space is a testament to its ability to adapt and innovate. Despite facing regulatory issues and setbacks, it remains an essential platform for the crypto community.