A secondary market has emerged for buying and selling Telegram tokens early
techcrunch.com
techcrunch.com
"Added to that, the fact that Telegram isn’t in control of the flow of capital at this early stage doesn’t look good."
I don't understand that, why would they not have access to the capital which they raised? Didn't they sell the tokens?
What a shit article, could at least provide some details.
One source said an early investor who acquired a tranche of tokens at a price of $0.37 is actively seeking to sell for $1.30 — potentially a 3.5-fold increase for a token that hasn’t left the gate yet.
That sort of flipping (or "capital flow") isn't typically possible in startup fundraising because investors are restricted from selling their stock.
For a normal startup it would look bad if your investors wanted to sell their stock immediately because they would be signaling a lack of confidence in the future. For this Telegram ICO, it isn't quite the same, but some people might look at it as a bad sign in a similar way. To me, it is hard to tell what the underlying basis for any valuation of this ICO is.
An ICO is more like an IPO than a seed round, in terms of who buys in. And early investors / insiders quite commonly sell fine stocks shortly after IPO.
None of this is a comment on the quality of Telegram in particular.
Ex buy at 0.30. Price goes to 1.2, sell 25% of holdings to cover cost, but let profit ride.
As the saying goes, "Can't lose money by taking profits".
Explain please. Does this literally mean Telegraph has $1.7b of cash in their bank account now?
Also, this market cap is not based on any kind of value investing principles or anything, just the current spot price of these coins. If too many people tried to cash out at the same time, the spot prices would drop like a rock.
All the tokens have so far been created and sold directly by Telegram. They have sold $1.7b worth of tokens to investors. It doesn't matter what those investors now sell the tokens at, and even if price drops to 0 Telegram still got the money from the investors.
I think that’s what we’re trying to zero in on. One is serious IPO money, the other is a clever financing solution that may be entirely inflated by speculation not to mention subject to extraordinary volatilty.
There is no way to tell in this or any other ICO which uses wallet addresses whose ownership id hidden behind layers of anonymity (in other words, all of them), how much of that 'sale' was merely the same old ethereum token market makers, hedge funds or even regular oldpump-n-dump groups moving quantities of token from one pocket to the other.
It's absolutely in their interest, and within the capacity of their not inconsiderable leverage, to generate breathless speculator excitement around all of the wildly extrapolated dollar figures that come from the combined effect of the bubble and the order (or two or three) of magnitude which some of the biggesr players in this market can bring to bear on these extremely close-held assets.
There is no direct association between individuals and addresses on blockchains. This is the problem with ICO evaluations constantly being tossed around and irresponsibly promoted by careless or indifferent finance and tech journalists. tossed around. It's gas, vapor, the same money being search related over and over again to convince mom and pop speculator that there's a stability of large numbers in these things. Can you make money on it? Yes, I have, and so have lots of people. That doesn't mean it's something that should be endorsed or suggested is legitimate to an unsuspecting public.
That's 1/10th the amount raised by Facebook IPO. Facebook, the heir apparent to Google-sized Silicon Valley domination, which everybody and their mother knew about, and which every(ish) investor wanted a piece of.
And here we have Telegram, a niche product using an experimental financing scheme and a technology that many are skeptical of. Yet somehow they convinced people to the tune of 1/10th FB?
Only way this adds up is if people bought the tokens using Bitcoin (with its very fuzzy and hard-to-liquidate value), and the SEC filing reports that towards the "amount raised."
- Telegram might have opted to cancel the public sale due to recent events on how SEC and CTFC perceive tokens (they are more and more viewed as security) and in that case, it's better that all tokens are sold to professional investors.
- Just because there is a demand for TON tokens which will, in turn, create a secondary "gray" market doesn't mean that the ICO is a mess. It's just that they decided not to sell to the public.
- You might love or hate what Telegram is doing with the ICO (I'm more on the hate part of the spectrum), but the fact remains - Telegram just raised 1.7B without diluting and it seems that both Telegram and the speculative investors are very happy about that. How that can be construed as a mess is beyond me.
Doing a "me-too" ICO with a bunch of buzzwords thrown in is such an obvious money grab and I would prefer that they simply integrate Ethereum directly in Telegram, but you can't deny their position as the go-to communication tool of the Crypto community (Wechat being the second in line). They are just capitalizing on their position and re-positioning themselves as a Wechat clone, but built on crypto instead.
edit: formatting
looks like TON is has its own proof-of-stake system, so it's competition for Ethereum. is that why Russia is blasting it off the internet?
PS: I'm still not convinced all of this is not some charade, but then again I don't trust anybody that build communication tools, so do take the charade comment with a grain of salt.
What are the chances a government (and a Russian government of them all!) would not only actually understand cryptocurrencies, but also have some solid strategy regarding those? Some governments are maybe close to this, but in overall - I'd say, chances are quite low.
Nah, it's just that FSB want to be able to either read messages or kill the non-cooperating service. Or, if we take another theory, they want to make to make an impression the service is extremely uncooperative and they absolutely can't read any messages. Either of those is much simpler and plausible than a conspiracy to ban some token that doesn't even exist yet.
Russia's attempts to block Telegram are almost certainly related to the services that Telegram offers now, not things which it might hypothetically offer in the future.
How would that work? What I gather from their whitepaper is that their plan for the network is much more ambitious. Even if they were to use Ethereum as the settlement layer, they would still need to build a lot of infrastructure on top of it.
[0] https://drive.google.com/file/d/18F51eFyyHZ1Pu0JxaTcT99xDLIc...
Maybe stop abbreviating without explaining.
You yourself seem to think this is, without putting too fine a point on it, a scam. If your capital is $1.7B in money you've scammed from others (or others who themselves hope to scam others), you've definitely waded into a big mess.
How much did the AR guys that are showing 3D renders raise again? The ones that everybody is calling scam?
I can also present to you an alternative viewpoint (non-scammy) on Telegram:
Telegram has the leading mindshare in crypto space communications which could mean that they will be able to drive day-to-day adoption. Imagine paying back your friends through Telegram. And most of your Telegram friends are anyways crypto savvy and would love to use this. I can fully reason TON being very relevant if they get the tech right.
About getting the tech right - they've built Telegram, right? It's an app that's being used daily. And it works great. And the founder is a very successful serial investor. I wouldn't bet against Telegram that they actually pull this off. With so much money they could easily buy a crypto team to give them the missing skills.
Let's crunch some numbers:
- They've sold for 1.7B USD of tokens. And let's say that they sold 50% of their tokens. This gives them 3.4B market cap.
- Let us look at the coinmarketcap.com - you can see that EOS, which has not launched the mainnet and has an ICO ongoing for the past year (raised ~2B so far). They don't have any real-world usage (remember - they do not have a public blockchain running) and they are currently valued at 14B.
- It's not unreasonable to expect that you will profit from buying TON tokens.
In the end - these are big boys that are investing. They understand due diligence. It's going to be hard for them to scream "its a scam".
And just to be clear, my definition of scam is: "I am lying about what I will do with the purpose of taking the money from you." Here its more of "I have a wish list of things I want to build, but I'm not experienced enough to know that this might be harder than expected." But this is what startups do daily. The only difference is that Telegram (and other crypto projects) is able to get cash at a much larger scale.
PS: I still don't like TON ICO.
That's seems like a mess to me. It, as far as I can tell, seems like a mess to you. It seems like a mess to the author of the TC article. Why is it so weird they'd call it a mess?
"Crypto" in this context is cryptocurrency right? (not cryptography)
I've only ever heard negative opinions of Telegram from the cryptography community.
If the tokens don't grant a stake in Telegram's business, does this mean the ICO is essentially an independent system (where tokens have value regardless of how Telegram performs as a business), and only loosely related to Telegram in the sense that their name was used to initially promote the opportunity?
ICOs give investors (better said: "token purchasers") no security rights. This is a point of contention between people running ICOs (tokens have utility value and are used to pay for services) and regulators (ICOs do not pass the Howey test [1] and are securities).
Right now token purchasers are either buying the tokens for the purpose of use or buying them speculatively with the purpose of the price going up over time as usage increases. Token issuance vehicles (companies) are oftentimes separated from the entity that is running the business to reduce legal exposure.
[1]: https://consumer.findlaw.com/securities-law/what-is-the-howe...
Will be interesting when a company sells tokens, becomes very successful, then decides they want to change the terms of their previous sale. Clearly, billions of dollars could be on the line - eventually some company is going to become very successful, get greedy and smartly raise the ambiguous question of whether they are legally bound by token sale obligations.
Have any companies that have ICO'ed reflected their token sales in their company bylaws? I think the 'legal API' between token ownership and enforcement in courts is an interesting problem.
Well, I think that if the matter of company ownership comes down to a decision by a court, then the token didn't really function as it was supposed to.
The point of (or at least, one of the points of) smart contracts is to be the enforcement agent for the terms of an ERC20 token.
Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership.
> Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership.
When put this way I can't see the future of smart contracts ever being fully realized. Humans rely on humans for final arbitration and take issue with automatic enforcement of rules without opportunity for appeal.
The appeal mechanisms I've seen still rely on humans (mechanisms like multi-signature transactions with an escrow user as a signature).
Ultimately, unless all of your property is entirely digital or informational in nature, governments will be forever able to use violence or the threat thereof to compel you to relinquish whatever property they wish.
A neighborhood food co-op or a pub's fantasy football league will probably actually benefit. A megacorporation is probably just too big to do without human arbitration in the face of violence, as you point out.
However, we might be closer than we think to, as you say, property being digital or at least wholly representable digitally.
We'll see. I'm both of the belief that smart contracts are awesome and that their usefulness is limited.
> If you’re having trouble picturing it: Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished. Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos. Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead. That’s an I.C.O.
[1] https://www.nytimes.com/2017/09/15/business/cryptocurrency-b...
As for the "stranger" part - "stranger" is just a friend you haven't gotten to know yet! :D
It's probably best to think of TON and Telegram as separate companies; when you invest in TON you get a stake in TON which, by design, will probably never have any assets other than network effect. So the answer is that you're buying into the network effect.
People believing they can make a 3.5-fold increase is what makes them invest.
In practice it's not much of a problem, because you sell your ICO tokens for Bitcoin and then you sell your Bitcoin for dollars/yen/won/euros at a licensed crypto-to-fiat exchange like Coinbase, Bitthumb, Gemini, etc. You do lose anonymity because all the fiat exchanges have KYC identity-verification procedures, but each step of the transaction is legal (for the ICO buyer), so there's little risk.
If you spent $1000 on BTC 5 years ago, you now have ~$100k of bitcoin. So why not let $30k ride on telegram ICO exploding and getting it up to a million?
Right now, most of bitcoin's liquidity comes from drugs – if you want to purchase anything, you have to go through it, or other, much less safe payment systems. However, the marketplaces move rapidly from darkweb to Telegram; and since buyers already heavily use it to connect to dealers and dealer's bots, it's an easy and natural progression to pay in the same app, too.
Out of personal experience with above points, I have no doubt that Gram will be huge on day one.
Two forms, $850M each:
[1] - https://www.sec.gov/Archives/edgar/data/1729650/000095017218...
[2] - https://www.sec.gov/Archives/edgar/data/1729650/000095017218...
Here we seem to be in the full swing of the fool supply curve, the irrational exuberance and speculative mania phase.
As a general rule, if you're going to pick a fight with one superpower, try to be like Snowden and make sure that you can still take refuge in a different one. By contrast, Julian Assagne is what happens when you make enemies everywhere.
http://southpark.cc.com/clips/410872/erics-jewelry-calvacade
Now I'm concerned that it will become a bloated software. I hope M. Durov will keep his vision of providing a simple messaging client that just work - because we desperately need one.
No matter what, an organization needs income. Either donations our business revenue. In any case, because there is competition, when if the service is simply maintained costs will inevitably rise.
Arguably raising a war chest is the best way to stay smooth sailing. I think there is a false belief that there is a world where it's possible to build and maintain quality software, specifically wide scale free consumer software, that doesn't need massive scale to survive.