Risk Warning: Your capital is at risk. Statistically, only 11-25% of traders gain profit when trading Forex and CFDs. The remaining 74-89% of customers lose their investment. Invest in capital that is willing to expose such risks.

Gram (TON) Vs Bitcoin in 2019: Best Worldwide Crypto Fight, Pros and Cons

Author: Martin Moni
Martin Moni
All publications of the author

As you may already know, ICOs have managed to raise a lot of money in the past two years. In 2017, ICOs had raised more than $5 billion while ICOs in the first quarter of 2018 alone had raised over $6 billion. Some notable ICOs that made headlines included EOS that raised about $185 million and Bancor with $153 million. But what if you were to learn that there was another ICO that wasn’t publicized yet it raised a lot more money than any ICO ever – much, much more. This was the Telegram Open Network (TON) ICO, meant to go live some time in winter. In this post, we shall be looking at the network, its technology and how it will compete with already established coins like Bitcoin in 2019. (Learn these: 5 tips to identify the perfect ICO to invest in)

More about TON

In case you’re wondering if TON has anything to do with the popular messaging app, Telegram, the answer would be yes. The company, Telegram Messenger LLP is registered in the UK and Telegram Messenger LLC is registered in the US. It was created by the brothers Nikolay and Pavel Durov in 2013, and since then has grown to become one of the most popular messaging apps worldwide. Unlike other messaging platforms, Telegram is often praised for its security and privacy features, and has been preferred by those who prioritize their privacy above other features. In the past 2 years, while ICOs had been growing in popularity, Telegram also became the main platform for developers to market their ICOs to potential customers. It would therefore make sense that the company would become interested in crypto, especially thanks to their 200 million customer base. According to TokenMarket, 84% of ICO projects have an active Telegram community, showing the widespread use of the app in crypto markets. (Do you know: What is An ICO and How Can I Make Money On It?)

Back in December, 2017 the company announced that it would be launching a crypto network in 2018 following an ICO along with native tokens. The blockchain network would be called Telegram Open Network (TON) initially but would later be renamed to The Open Network (TON) as from the year 2021. The native tokens to be used within the network would be called Gram. From the coin’s whitepaper, Telegram intended to use TON as the first truly mainstream decentralized platform for both money transfer and decentralized apps. According to the whitepaper, the current state of cryptocurrencies is like the automobile design in the late 19th century when the design was inefficient. TON would make blockchain more usable in every way, becoming the next greatest cryptocurrency network. (Some of the: Basic Cryptocurrency Terms You Need To Know)

The ICO for TON went ahead according to plan, and by the 30th of March 2018, we learned that the company had already raised $1.7 billion from the ICO. The information was revealed when they filed a Form D disclosure with the SEC for the sale of Gram tokens. Last year, the SEC declared ICO tokens to be a form of security to be governed by them, and companies had to get approval before launching an ICO. Of the total amount raised, $850 million was raised in February alone, pushing the total to $1.7 billion, ahead of their initial target of $1.2 billion. Perhaps the reason you may not have heard much about the ICO was because it wasn’t open to everyone but high net-worth individuals. In the first round of investments, the minimum requirement was $20 million and Gram tokens were worth $0.38 apiece, selling 45% of the total Gram tokens. In the second round of the ICO, you had to have at least $1 million to participate and each token was worth $1.33, selling up to 58% of the total Gram tokens available and pushing the total funds raised to $1.7 billion. (As an investor, you must master these: 5 tips to forming the most promising cryptocurrency investment portfolio for 2018)

A public ICO had also been intended, but seeing how the company had raised more than their initial target, the public ICO was cancelled. Nevertheless, this ICO made a huge impact over the entire ICO market as the image above shows, exceeding all other ICOs ever held. As usual, whenever there’s big money involved, scam artists will try to get a piece of the pie, and this also happened with the TON ICO. On the 28th of February, a company calling itself Telegram Open Network Limited was registered in the UK Companies House. Under company number 11229448. It became clear that getting a company registered with the Companies House was so easy it only required $20 for an online application, which is probably why many scam Forex brokers present their company number as evidence of their legitimacy. Anyway, the fraud was discovered quickly and reported by CCN, saving a lot of people from the scam. The scammers were planning to take advantage of vulnerable investors eager to get a bite out of the much hyped ICO. (Before making an investment: Learn How Cryptocurrency Scams Operate And Avoid Them)

How does the TON network operate?

In order to fulfil the vision for TON, Dr. Nikolai Durov combined both blockchain technology and other platform features. These two operate to ensure the network can perform all its intended purposes with ease. The TON blockchain starts off as a regular blockchain like the one found on the Bitcoin network, but with several additions. The most important one is the Infinite Sharding Paradigm. This is where the blockchain can split off into parallel blockchains up to 292 accompanying blockchains. It is sort of like the Lightning Network on Bitcoin, but different in how it operates. On the Lightning Network, some information is stored on sidechains to reduce the load on the main blockchain and speed up the process. (All the: The lowdown on cryptocurrency)

On the other hand, sharding involves the actual split of the blockchain to accommodate any changes in the load, and then subsequently merging into the main blockchain. The effect of sharding would be to increase the transaction speeds across the network. One problem the TON blockchain aims to address is the slow transaction speeds that make crypto ineffective against systems such as Visa and MasterCard. With sharding, though, the TON blockchain could support millions of transactions every second – faster than any other network. Adding to sharding is also hypercube routing whereby transactions between two separate blockchains is sped up also allowing for faster transaction speed. (Investing In Cryptocurrencies: Watch These 5 Profitable Cryptocurrencies)

Rather than use a proof-of-work algorithm that is inefficient in that it consumes power and allows for monopolization, TON will use a proof-of-stake approach. This is similar to what Ethereum have been working on with the Byzantine update, meant to increase the speed of transactions and avoid the use of ASICs by a few individuals. Finally, TON would avoid any forks and errors in the network by providing a self-healing mechanism where new, valid blocks are created on top of faulty ones. Not only would this prevent a fork in the network, but it would increase authenticity in the network in case of an error. (Do you know: What Will Be The Impact Of A BTC Fork?)

These features would be sufficient for any other coin, but TON intends to handle more than just money transfer to include file sharing and decentralized apps. To do this, the TON platform has features like TON storage that mimic torrents or file-sharing websites like Google Drive. These systems use multiple sources of files to ensure they are always available, and when coupled with the TON blockchain, it would much more secure. TON proxy will increase the users’ privacy by using decentralized VPN services while TON DNS will allow content to be readable just like reading text on a website. Telegram has always been a privacy-centric platform, and they intend to bring this same feature to the TON platform. (This are the: 5 Most Popular Uses of BTC and other Coins

TON payments and services will facilitate the transfer of payments across the network at a high speed while still letting other 3rd party services in. Telegram recently launched Telegram API that allowed other services to take advantage of the Telegram Messaging platform, but when done across the TON platform, the service would be faster and even more secure and private. (Find out: Which Are The Most Influential Cryptocurrency Markets By Country)

Another problem TON will try to address is access and transfer of tokens, which is sometimes difficult when a person has to find an exchange, wallet, etc. that would enable them to acquire and store the tokens. Gram tokens will be easily accessible and stored on the TON light wallet that would be available on all Telegram applications either on smartphones or computers. By doing so, they intend to make the TON-Telegram wallet the most widely adopted wallet thanks to the company’s huge customer base. Not only will Gram be used within the network, but also on external applications. (Does Bitcoin Stand A Chance Of Becoming The Worldwide currency?)

Progress on the TON network

Since the ICO earlier in the year, the TON project has achieved several milestones, although it is not yet done, nor is it on time as per expectations. According to the project’s roadmap seen in the image above, a stable version of the TON network should be launched before the end of the year, which is rapidly approaching and doesn’t seem likely. (Look at our: Veritaseum Price Predictions and Forecasts for 2019)

By August, 35% of the project was complete and the TON blockchain was almost complete with smart contract execution ready thanks to TON Virtual Machine. In November, reports from various sources said that the project was 70% complete and that the test version of TON could be on the way in a few months. Clearly, therefore, the stable version of TON is a long way ahead and we may not see it come into the markets until 2019. (Check out: Revain Price Predictions and Forecast for 2019)

What makes it different?

It was a huge shock when we learned that TON had raised $1.7 billion during its ICO of about 3 months – higher than any ICO ever. Which calls to question the validity of the technology and why so many investors put in so much money into the project. To do this, we have to look at the project from their perspective and why they thought it was different from any other ICO. (How easy is it to trade Cryptocurrency in the Forex market?)

The main difference from the project’s roadmap is in the number of transactions the company claims it can handle – millions per second. This would be possible through sharding as described in the previous sections, allowing multiple blockchains to split off from the main one and merging thereafter. As far as crypto goes, the problem of scalability has always been at the forefront, leading to so many problems. You may remember that Bitcoin Cash first came onto the scene because some developers wanted to increase the block size from 1MB to 8MB. Later on, Bitcoin SV would fork from Bitcoin Cash because some developers wanted to raise block sizes up to 128MB. These problems have plagued not only Bitcoin but other coins such as Litecoin as well. Instead of working on increasing the block sizes, though, TON will completely change the game by using a revolutionary strategy they have called sharding. If this process is successful, then TON would be the fastest payment network ever, forever solving the problem of scalability. (Looking at: Stellar Lumens (XLM) Price Predictions and Forecast for 2019)

Besides scalability, TON would allow for more than just value transfer to include decentralized apps and even files. The TON blockchain uses its infinite scalability to host much more information without slowing down the entire network, thus allowing for more activity. Bitcoin and even Ethereum are often bogged down by multiple requests in periods of high demand, causing the entire network to slow down drastically. Within such a network, it is impossible add any more features on top of the existing ones, but TON could be able to handle a lot more. (Have you asked yourself: Can You Actually Get Your Money Back From A Fraudulent Broker?)

Comparing it to Bitcoin in 2019

TON has stepped into the crypto markets with a bang, and it is geared to make a splash once it goes live around the world to its 200 million plus users. The best way to assess its performance would be to compare it to the current best coin in the market, Bitcoin, and analyse how they match up. Will TON be better because of the improved and revolutionary technology, or will Bitcoin remain king due to its dominant position in the market. We have all witnessed upsets in the market where a startup beat an already dominant player, like Google did to Yahoo!, but can TON do the same to Bitcoin. (These are the: 10 Most Important Resources to a Cryptocurrency Trader)

In favour of bitcoin

One thing Bitcoin has going for it is, as already mentioned, its dominance in the market. Today, it is possible to pay for goods and services across the world using Bitcoin, and in some countries like Japan, Bitcoin is already recognized as legal currency. Recently, Ohio started to accept tax payment in the form of Bitcoin, and a lot more companies and authorities are doing the same. Such dominance and widespread use will be the main hurdle for TON to overcome because it will be completely unknown once it goes live. Speaking of which, there still isn’t a clear date when TON will be fully operational, which means (for now) it is still completely obscure. For users, companies and regulators to view TON as a valid method of payment would be difficult, especially when there are already established altcoins like Ethereum that already exist. (Some of the: Cryptocurrency Regulations Around the World)

The next problem will be access to Gram tokens. 200 million Gram tokens in total were created for the TON network, with 44% made available to the public. Ultimately, 58% of the tokens were sold to investors, which means that there are over 100 million Gram tokens in the market. These may seem like a lot, but consider that these tokens were sold to institutional investors with a lot of capital. Only they can sell these tokens to users on the TON network, and they could perhaps raise the price of the tokens as they wished. Inasmuch as TON was meant to be completely decentralized, monopolization of the Gram tokens could mean exorbitant prices (at least initially) for consumers. Compared to Bitcoin, it is possible to access the coin even over peer-to-peer networks because the coins are widely available, and not just in the hands of a few investors. (Do you know: What Would Happen To Bitcoin Price When It Is All Mined?)

Remember also that there is a two-year lockup period for investors according to Forbes, which further keeps Gram tokens at bay. Therefore, these tokens will not be coming to the open market any time soon, and perhaps this could also mean TON is not about to become available to the masses. Gram tokens were only made available to big investors and ‘friends’ which could mean the network was not meant for the general public. (Ripple Price Forecast, Making Money Moves!)

Finally, TON has a much smaller group of developers maintaining it. From the moment it is launched until 2021, TON will be run by the founders of Telegram and a handful of developers. While there may be some advantages to having a small team, it also means there may be some deficits in the development team. Crypto firms have always faced hacking attempts as well as other challenges that need a lot of people to handle. Bitcoin already has an enormous group of developers that ensure the network runs smoothly, but TON only has 15 developers. For a platform targeting over 200 million users, this may become a bit of a challenge. Fortunately, TON will become The Open Network from 2021 and be managed by the TON Foundation, which will be a non-profit organization. (Investor Tips 2019: What To Include In Your Portfolio)

In favour of TON

Although the network is not yet live, it threatens the position of Bitcoin because it does have some very good intentions and technology. First, TON will address the biggest problem among most coins, scalability. By using sharding, TON will completely eliminate the problem of network lags even when demand is very high and through network spamming. This is also where TON will benefit from having a small team because changes in the network will be made swiftly without having to obtain a consensus from numerous developers around the world. There is absolutely no comparison between TON’s ability to handle millions of transactions to Bitcoin’s 7 transactions a second average. ((Ever asked: Will Cryptocurrencies Recover From Their Price Slump In 2018?)

Also remember that TON will be able to handle smart contracts and not just payment processing. Bitcoin was also planning to add smart contracts once the scalability issue if fixed, but this doesn’t seem to be possible any time soon. Meanwhile, TON will be able to allow smart contracts which are already functional through the TON Virtual Machine, similar to ether’s Ethereum Virtual Machine. This would allow other coins to be created on the TON network as well as the sharing of files and even storage. Applying these smart contracts at such a large scale could even replace Ethereum whose smart contracts have also been facing problems due to scalability. (Have you ever wondered: How Did Tether Cryptocurrency Survive The Crypto Market Selloff?)

User friendliness is another positive for TON compared to Bitcoin. If you have ever bought Bitcoins, you would know how cumbersome it can be to sign up at a crypto exchange, validate your account (it could take days), fund your account and then make the purchase. Hold on, still not through. Net you will need to identify a good crypto wallet that isn’t vulnerable to hacks and then transfer your Bitcoin into it. Throughout this process, you would have to wait up to 10 minutes for a transaction to be confirmed, and that is on a good day, because there may be delays that cause your preferred exchange to halt trading or take longer than usual, sometimes even days. That is before we even mention the transaction fees involved in every step, including the exchange itself, and these too could increase exponentially. Last year, Bitcoin transactions cost as much as $50 at the moment of highest demand. (These are: The Most Prominent Cryptocurrency Hacks and Scams You Should Know About)

TON would make the entire process of buying, selling and storing Gram tokens streamlined by keeping everything in-house. If you’re a tech enthusiast, you should see how Apple products beat Google products because they handle every step of the process. With TON, coins would be bought though groups and bots on the Telegram platform directly from one person to another without an exchange. Costs would also be low because of using proof-of-stake (PoS) rather than proof-of-work (PoW because miners don’t have to be compensated. Telegram promised that they will make the network very user friendly using TON DNS so that everyone will be able to use it. (BCH Vs. BTC: Confrontation Forecast in 2018)

Finally, and certainly very important, is that TON will be truly distributed unlike the current state of BTC. A few developers managed to acquire huge mining warehouses, and these give them power over the entire web, making it difficult to pass any changes to the BTC web, however beneficial. With PoS, there won’t be any groups of people monopolizing TON, and any beneficial changes would be easier to implement on the web. Moreover, this would allow market forces to determine the value of Gram tokens rather than a few individuals. A signal of their power could have been noted following the recent hash war between BTC SV and BTC Cash where miners diverted hash power away from BTC. This move caused BTC prices to crash almost 45% within days, showing just how much power these people had. In a truly distributed system, Gram tokens will be accurately priced based on its supply and demand. (These are the: BTC Price Prediction Update And Forecast For Autumn 2018)

Who wins?

It is still too early to tell the winner because one of the two (TON) is still in the development stages. All the same, we can still see that the benefits of TON and its advantages over BTC outweigh the downsides, making it the preliminary winner. Both of the camps still have a lot of work to do, though, while the crypto industry as a whole continues to mature. For now, we can only wait for the final version of TON to come around before we can get our hands on it and give it a try ourselves.

 

If you want to know even more about TON, watch this quick video:

Was the article useful for you?
5 (1)

ADD A COMMENT

Risk Warning: Your capital is at risk. Statistically, only 11-25% of traders gain profit when trading Forex and CFDs. The remaining 74-89% of customers lose their investment. Invest in capital that is willing to expose such risks.
If you like this discussion on TopBrokers.com then please like us on Facebook