Cryptocurrencies have huge ramifications to commerce and distributed computing. They may also impact enterprise communications. Telegram is about to launch a provoking experiment. Its planning the Telegram Open Network (TON) built on its own interpretation of cryptocurrency technologies.
The more I learn about cryptocurrencies, the more I get excited. Cryptocurrencies are often over simplified as digital money, but that’s not what makes them so intriguing. Digital currencies are not new: Paypal, airline miles, and Visa are all digital currencies. Cryptocurrencies are really about distributed trust.
Cash is less versatile than it used to be because so many of our purchases are now online. Five years ago, it was hard to pay a Taxi driver with a credit card. Today, Uber drivers won’t take cash or any direct payment at all. It doesn’t have to be that way. For example, it’s still possible to buy things on eBay with a check.
Currently, our digital transactions are done through centralized models. We look to Visa and Paypal to validate our transactions. But there’s a few problems: they charge a tax for their services and they report our transactions. By inviting these “partners” into our transactions, we are giving up many freedoms such as privacy and anonymity.
Fraud is also limiting these services. It’s hard to, for example, purchase something and have it shipped to a non-billing address. While on a recent trip, my credit card company asked me about some suspicious activity. It was indeed fraud, so they promptly cancelled my card. Yes, I carry a backup card, but everything electronic (like Uber) had to be redone.
Cryptocurrencies reinvent money for the digital era. This is enabling us to question assumptions that we never questioned before. Such as why money is restricted to national boundaries? In the US, the dollar is relatively stable, but countries like Brazil, Greece, and Argentina have seen some turbulent times.
We have seen globalized solutions replace national solutions in many areas. Video cassettes were limited to regions because of technical incompatibilities (PAL vs. NTSC video formats). The tech restrictions went away with digital formats, but were artificially maintained in DVDs (region codes). They are completely disappearing with MP4 and streaming videos (though it’s common for streaming videos to block foreign IP addresses).
Of course, we used to have a national phone system that’s been replaced with competitive offers. We used to limit the international routes airlines could fly. As the world has become more global (and virtual), localized restrictions on products and services become obsolete.
Messaging and BlockChain
Currently there’s separate consumer and enterprise messaging apps. There’s also apps such as Signal and Wickr that specialize in privacy and deletion capabilities. All of these are centralized models without an integrated currency.
Messaing and money go together, as illustrated nicely by WeChat. Its customers can find, communicate with, and pay businesses without ever leaving the app. Mobile payments within WeChat are so prevalent that visitors to China have trouble getting by with just credit cards. Popular chinese destinations are having to add mobile payments to accommodate Chinese visitors.
Telegram wants to increase the security of its messaging service and also leverage the decentralized benefits and security concepts of blockchain. That’s not a unique idea. The Mercury Protocol is building out communications on Ethereum, and Snap-Interactive is building its BackChannel application on NEM.
Telegram figures it has the size and momentum that can justify its own blockchain and intends to launch its own currency (Grams). It intends to raise funds with an Initial Coin Offering (ICO) as soon as this March that could net as much as $500 million. Unlike other cryptocurrencies or messaging platforms, Telegram has 180 million monthly users. TON will use a newly created, “third-generation,” “self-healing” blockchain. It will use 2-D technologies for scale and increased speed.
There’s no question we are going to see a lot of new cryptocurrencies in 2018. Many of which will be tied to a specific company or application, and there will be many more applications tied to existing blockchains such as Ethereum.
Messaging related blockchains are a fascinating concept that tie together two of my favorite topics. They will likely represent the next major evolution in messaging. Blockchain based applications can offer a higher degree of anonymity and reliability as well as stronger retention. They may be able to withstand attacks better than current approaches with improved global services.