TON — LEGENDARY ICO OF 2018
In early 2018, sensational ICO from Pavel Durov raised 1.7 billion dollars. The distinctive feature of this mega – project is a skillful PR. No official statements from Pavel Durov. And chronicle “leaks” of information on the project.
Of course, Pavel Durov is a unique personality. The creator of Vkontakte (top Russian social network) and much more famous Telegram messenger. Ordinary people admire him and are envious of his success. Investors believe in his entrepreneurial talent and bring Durov their money.
But let’s put ourselves beyond the hype and Durov’s personality. And let’s look at the TON project and the Gram cryptocurrency impartially.
TON – ALL THE BEST THINGS. NOTHING UNIQUE
According to the statements of its creators, TON blockchain to be an advanced product in the blockchain and crypto industry.
The platform will combine the following elements:
Multi-blockchain and sharding
The idea is very cool. Conventional blockchain becomes more and more cumbersome and unwieldy after each next transaction. Because all nodes must store all transactions. In the TON blockchain, all user operational information will be stored in shards. So as not to overload the main blockchain. The number of subchains in the shards may increase depending on the load of the network. It is due to this that the creators of TON promise to process several million transactions per second.
However, they forget to mention that the idea of sharding has already been implemented in other blockchain projects. For example, in Zilliqa, Quarkchain, Pchain, IOStoken. And sharding in combination with multi-blockchain is already implemented in DapCash.
TON virtual machine
VM TON implements smart contracts and so-called “virtual law.” Virtual machine and smart contracts are the invention of Ethereum. More perfect and advanced VM are already implemented in other projects – Cardano, TRON, EOS, NEO, DapCash.
It is something like Chinese WeChat. The messenger will be linked to a light wallet with Gram coins. In fact, Gram cannot be called a cryptocurrency. As it is much more like Ripple than like Bitcoin. Cryptocurrency is usually associated with anonymity and decentralization. There will be no mining of Gram. Coins are already issued and distributed among investors. 50% of the coins remain in TON Reserve. It is a non-profit organization that will regulate the Gram exchange rate to USD. Something like the Federal Reserve System. This concentration of coins gives plenty of room for manipulation of Gram rate.
In addition, a kind of PoS will be used as a consensus in the TON network. Thus, this inevitably leads to centralization. Especially with an almost constant set of validators.
Gram can be exchanged for fiat and back through banking services using Telegram Passport. In fact, Gram is not a cryptocurrency but a kind of payment system.
TON Messages transport protocol
This is a mechanism for messages interchanging between nodes. The network of nodes will be built on the principle of I2P. The question is how the data exchange between nodes will be encrypted. Apparently, TON will apply the same encryption algorithms as most of the other cryptocurrencies.
However, despite the sophisticated architecture of the network, it will be vulnerable to quantum computing. Currently, much more advanced blockchain projects are being developed. And they take into account technological shifts in cybersecurity. These are such projects as DapCash which implements a variety of quantum-proof encryption algorithms.
Quantum Resistant Ledger is also developing quantum-resistant blockchain. However, this project proposes only one type of post-quantum digital signature. It is worth noting that some collisions have already been revealed in the SHA-256 algorithm. These collisions drastically reduce the search for all variants of a key by a classic computer. Accordingly, a quantum computer will need fewer qubits to crack such a signature.
CRYPTOCURRENCY OR SECURITIES?
In January 2020, official information about the project appeared on the Telegram website. The Telegram team has publicly admitted to working on the TON blockchain project and the Gram cryptocurrency.
At the final stage, the project had serious problems with regulators. The team intended to launch the sale of coins in October 2019. This is what was promised to investors. But the all-powerful American SEC sharply opposed this. The Commission considered Gram as securities. While the Telegram positioned the tokens as «the means of preservation and transferring value.» According to the SEC requirements, Telegram had to disclose information about the project. However, Durov’s team did not do this. The lawsuit with the SEC continues to this day. On March 24, 2020, the American court temporarily banned the distribution of Gram tokens to investors.
Durov was compelled to offer investors to return 77% of the funds. And also postpone the launch of the project to April 30.
This whole situation is an attempt to «steer out» between the rules of the cryptocurrency market and the requirements of the «official» financial world. Which demonstrates yet again that Gram should not be considered a cryptocurrency.
ADVANTAGES AND DISADVANTAGES OF TON
As we can see, the strong point of TON is the business reputation of its creator Pavel Durov. And the investors’ money raised through private pre-sale.
Gram is really capable of becoming a high-quality payment system. But no more than that. So, Gram called “cryptocurrency” is just a marketing hook.
If you delve into the technical essence of the project and the set of services offered it is obvious the project doesn’t have its own zest. This is a set of good ideas that have already been implemented or are being implemented in other projects.