Tehran - Telegram is arguably the most popular social media application in Iran.

So it will come as a relief to its estimated 40 million users - nearly half of Iran's population - that the government decided this week to lift restrictions on the app that were put in place during anti-government demonstrations last month.

On Sunday, a day after unblocking Telegram, Iranian President Hassan Rouhani spoke at an awards ceremony organised by the Ministry of Research, Science and Technology. He told the audience blocking apps wouldn't solve the country's problems, and resisting technological progress is futile.

"If we want cyberspace to be useful for society, we should educate the young generation about how to use cyberspace," Rouhani said. "Blocking things won't solve problems. Some say blocking apps is a good thing and yes, we have differences. But blocking [the internet] doesn't work."

Rouhani is considered a liberal politician with comparatively moderate views on social issues. He took the opportunity to address the concerns of people from more conservative corners of Iranian society who would like to see the internet closely policed by the government.

"There was a time we said no one should listen to the radio during the previous regime," Rouhani said. "There was [signal interference] with every station other than one or two. Was it successful, sending interference?

"There was a time we said using satellite TV is forbidden. So did that work? Do people not watch? ... Now we say cyberspace is bad. If we say it's bad, is that fixing the problem?"

He also cautioned fellow leaders not to lose faith in their own people.

"[Iranians] have the ability to understand and have the right to choose," he said. "We are a great and educated country. Our nation is great. We should tell people how to use a tool. Any tool, if it is not used properly, could be dangerous."

The tool in question, Telegram, is like WhatsApp, Facebook, Twitter, YouTube and eBay all rolled into one.

'Total mistake'

During anti-government demonstrations and subsequent unrest, Iran's government criticised the company for not filtering content, thereby promoting violence.

The government claimed videos circulating during protests exaggerated the scale of the movement. Some reports also said instructional videos were circulating on the app about how to make Molotov cocktails - all part of a foreign espionage campaign to create instability in the country, Iran's leaders said.

While it is true activists used Telegram to coordinate demonstrations and share videos of anti-government protests not shown on state media, there were only a handful of people misusing the application, and blocking it nationwide was an overreaction, social media experts say.

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"I'm not a politician, I don't know their hidden agenda, but as an economist, as a mathematician and an entrepreneur, I think it is a total mistake because it killed many jobs," said Alireza Aghasi, CEO of Adventure, an online ad agency and technology company.

Aghasi said the Telegram shutdown was the government interfering with an online ecosystem that runs in parallel with the lives of millions of Iranians.

People use it to communicate with loved ones, operate businesses, even for cloud storage. People have so much invested in the platform, he said, it is nearly impossible to migrate to alternative applications.

"Telegram has created the tools so that the non-tech-savvy people can make money," Aghasi said. "We are a team of 13 or 14 people. And now 90 percent of my team are millionaires in dollars and billionaires in riyals and the average age of them is 25."

Telegram has connected retailers and entrepreneurs with a digital marketplace that includes half the people in the country. And for millions of Iranians, the one-stop-shop nature of the app has made it synonymous with the internet.

By some estimates, Telegram use accounts for half of all web traffic in Iran.

"I think the political agenda behind Telegram is limited to some political groups," Aghasi said. "It's not a common thing among people … They are seeking to be entertained, to do business, to consume content."

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He admitted there are some people circulating fake news on Telegram, but in small numbers. The decision to block the entire app showed some of Iran's leaders have a lack of technical expertise when it comes to managing social media platforms, he added.

"They don't know what they are dealing with, they just have an image of what the problem is," Aghasi said.

Cyberspace freedom

Many Iranians also use the app to exercise freedom of thought and speech in cyberspace, in ways they may be unable to on the streets in the real world.

RoozARooz, or DaybyDay, is an online news startup that develops content for social media.

Its journalists say Telegram has given them a place to broadcast stories from the darker corners of Iranian society. They're able to explore issues of poverty, minority groups, and human rights - the kind of issues traditional state media outlets often ignore.

"People want a way to access news properly, to feel the news is coming to them without any filtering - and Telegram is doing that," said Matin Ghafarian, editor-in-chief of RoozARooz.

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"Before Telegram was blocked, I can say we had a free media system that had big audiences. The most successful channels were more free than print and online media. But they observed the framework of red lines. They published news, they were more transparent, they didn't insult anyone or politically provoke people. There was a free wave of information. And I think it was attractive to people.

"[Iranians] are very keen on hearing news more freely," Ghafarian told Al Jazeera.

On Friday, the deputy prosecutor general said Telegram traffic was down by 90 percent since the unrest began. But analysts say the effect on users has been much smaller and, in fact, blocking the app may have backfired.

Many Iranians now use online tools such as VPNs to bypass government restrictions and have access to more of the world wide web than ever before.