The encrypted messaging startup Telegram is the latest company to get in on the blockchain and digital currency craze. According to a report by Tech Crunch, Telegram plans to launch its own blockchain platform as well as a native cryptocurrency which can be used for payments within the chat app. (See also: Telegram Is Growing Fast!)
While a number of prominent businesses have made moves into the blockchain realm in recent months, this one may be different for a few reasons. First, the "Telegram Open Network" is purportedly a new type of blockchain with more powerful capabilities. And, perhaps as importantly, the ICO which will launch the platform, and the currency aims to be one of the biggest yet.
Pre-Sales Fuel ICO
The launch of the new network is reportedly going to be funded by a massive initial coin offering (ICO) which will include private pre-sales. These pre-sales could range into hundreds of millions of dollars, which would make the Telegram ICO one of the largest of all time.
What could make Telegram's efforts in this area different from many others? While most ICOs have aimed to launch new startups, Telegram is unique in that it is a well-established and successful pre-existing business.
One major reason why Telegram may be interested in getting into the cryptocurrency space has to do with its payment system. Converting to an in-house cryptocurrency would offer Telegram exceptional levels of independence from outside regulators. This feature would potentially allow users to circumvent remittance fees for international payments and transactions. It would also allow users to move potentially large amounts of money privately and via encryption.
Users could even make micropayments that would otherwise not be worthwhile because of relatively high credit card fees. The fact that Telegram is already highly popular among cryptocurrency enthusiasts around the globe makes the prospect of a new digital currency in this area even more enticing.
Huge Cryptocurrency Sale
Reports suggest that Telegram may raise as much as $500 million in sales before the ICO. This would peg the potential total token value for the upcoming cryptocurrency as high as $5 billion. However, these figures may change, as the ICO is likely many weeks away. If those figures do hold up, though, Telegram's ICO could be the largest of all time.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.