According to a report in the New York Times, Telegram is aiming to launch its crypto-coin, the Gram. Telegram has reportedly told its investors that the first batch of its coin called the Gram will be out within the next couple of months. In addition to the coins, there will be Gram digital wallets available to Telegram users, a number which stands anywhere between 200 to 300 million.
The cryptocurrency world got a shot in the arm when Facebook announced its plans to launch its cryptocurrency, Libra, earlier this year. While Libra is embroiled in a lot of regulatory controversies, Telegram is rushing in to launch its cryptocurrency by 31 October.
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain that serves as a public financial transaction database.
Telegram is a cloud-based instant messaging and voice over IP service. Telegram client apps are available for Android, iOS, Windows Phone, Windows NT, macOS, and Linux. Users can send messages and exchange photos, videos, stickers, audio and files of any type.
Telegram’s Gram coin will operate on the same decentralized network of computers as Bitcoin does. Telegram claims that once the coins are released, they will be governed by the decentralized network of computers. Telegram will have no control over the coins and how they move around. Just like its encrypted app, this leaves the use of Gram coins for good as well as bad purposes, which will surely raise the eyebrows of regulators.
However, unlike Facebook’s Libra which is said to be a stable coin and will be backed by fiat currency such as the US dollar or Japanese Yen. Gram will have no such thing. Just like Bitcoin, Gram’s value will depend on the demand and supply and what one is willing to pay for it. In short, Gram won’t be a stable coin.
Telegram is expected to release a test version of the Gram network before the coins are released. Gram coins also want to enable the buying and selling of goods on Telegram.
It’s not quite clear how regulators might deal with a new Telegram cryptocurrency, seeing how Telegram itself has a decentralized operating model. The platform allows users to send encrypted messages between phones, which has made it unpopular with some governments.
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies.
While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they have to first gain trust and credibility among consumers. However, its relative complexity compared to the regular currencies will likely deter most people.