TL;DR: According to The New York Times, privacy-based messaging application Telegram has until 31 October 2019 to produce its Gram tokens to investors or risk losing millions. And with Facebook Coin Libra facing regulatory hurdles and resistance around the world, Telegram appears to see an opening for its product.

Telegram Races to Deliver Gram Token to Investors

Really about the only thing Telegram has in common with Facebook is its being considered social media. Otherwise, the platforms are insanely different. That won’t ever stop mainstream media from conflating the two as relative equals, especially when both dabble in what corporate news sites brand “cryptocurrency.” It’s probably just easier to point out Telegram verges on about 10% of Facebook in terms of users and sheer market heft.

Whatever the case, go-to cryptocurrency beat reporter for The Times, Nathaniel Popper, insists “three investors who have spoken with Telegram recently” apparently were told the company “is planning to send out the first batches of its coin, the Gram, within the next two months.” The rollout will include complimenting wallets, according to those same investors, “who spoke on the condition of anonymity because they had signed nondisclosure agreements.”

More than a year ago, Telegram raised over a billion and a half dollars through an initial coin offering (ICO). The company hoped to leverage its roughly 200 million users by way of a Gram token, an in-app method to push value around the globe … anywhere Telegram can be accessed. Careful readers can now probably suss out why mainstream coverage is so obsessed with linking it to Facebook Coin Libra. It looks very similar.

Important and Telling

But the difference between the two is important and telling. Facebook proceded hat in hand to regulators, leaking information to the likes of Popper and other outlets, hoping to create a buzz and, some conclude, offer a government-friendly crypto alternative to stateless, permissionless platforms like Bitcoin. And Facebook did all that before going to market on Libra, and yet there remains doubt Libra will ever see light.

Telegram has a much different relationship to both cryptocurrency and governments. It is the hotbed communication app of the crypto world, with just about everyone in the ecosystem using it regularly. The company shares certain privacy assumptions, and prides itself on those — a kind of anti-Facebook. It has been the home for dissidents all over the world, a veritable uncensored idea market. And its ICO and Gram token have taken similar paths of keeping a relatively low profile. Until now.

As Popper noted, “Telegram has always operated with a degree of disregard for the opinions of government authorities.” Its founder, Pavel Durov, has been a public thorn in the side of countries like Russia, his native land, where he has a history of butting heads with local bureaucrats — so much so, protest movements often view Telegram as a haven for communication (Hong Kong is perhaps the best recent example).

Backed by Nothing

“In its sales pitch for the Gram,” Popper explains, “Telegram has said the new digital money will operate with a decentralized structure similar to Bitcoin, which could make it easier to skirt government regulations. Once Telegram releases the coins, it has said the coins will be governed by a decentralized network of computers that will give Telegram no control over how and where the coins can move,” a truly terrifying aspect for mainstream press and regulators.

Gram tokens will be undoubtedly listed on exchanges, causing some in the ecosystem to wonder why a proprietary coin is necessary for Telegram at all. Why not just use an existing, decentralized cash-like crypto instead? That is the rub for free platforms,however, monetization. Telegram is advertisement-free, so a Gram token is maybe the best way to profit from the platform’s popularity through a buy-in mechanism rather than a hard sell.

“Facebook’s Libra is meant to be backed up by traditional currencies held in bank accounts, in order to stabilize the value of the digital coin,” The Times also notes. “The Gram, in contrast, will be backed by nothing and gain or lose its value, like Bitcoin, by whatever someone is willing to pay for it.” Apparently, trial versions of Gram will be released soon on the platform, and the company is expected to deliver fully by Halloween in lieu of returning millions back to investors. One thing about this latest move for Telegram is very clear: governments will be paying a lot more attention.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.

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