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   Strategies & Market TrendsBlockchain and Cryptocurrencies

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To: FJB who wrote (229)1/17/2018 10:48:49 PM
From: Glenn Petersen
   of 5496
Thanks for posting the link. An interesting article. Worth posting in fill, given the size of the ICO, the large existing user base and the sheer ambition of its proposed development plan. When you toss in the fact that it comes with a few caveats, it is guaranteed to generate a lot of interest, both pro and con.

Inside Telegram’s ambitious $1.2B ICO to create the next Ethereum

by Jon Russell ( @jonrussell)
January 15, 2018

We have even more information about messaging app Telegram’s plans for cashing in on its popularity within the crypto community with the massive ICO for its proposed Telegram Open Network (TON) project (that we first reported), after obtaining the whitepaper and investor prospectuses in full.

From the documents, it is clear that Telegram isn’t content with sitting on a platform like Ethereum for its token sale and services, as most ICOs are. Instead, it wants to create a platform of its own to rival Ethereum for hosting a new wave of decentralized services and internet experiences tipped to emerge thanks to the blockchain.

Telegram’s ICO will be a record if all goes according to plan, but that’s only the start.

The company plans to raise a staggering $1.2 billion in total, starting with a $600 million pre-sale that’s strictly for traditional venture capital backers and those inside its executive’s close circles. That first stage is running from January to February by invite-only, according to the letters sent to selected participants that were viewed by TechCrunch.

Following the pre-sale, the firm plans to hold a public sale in March which will allow retail investors to enter. The public sale is pegged at $600 million, which would make the overall ICO worth $1.2 billion. That blows any other token sale out of the water, and it would easily surpass the current record of $257 million raised by Filecoin in September.

Beyond money, the ICO will be notable for a product with far greater traction among consumers than any other token sale project to date. As explained in the prospectus, Telegram is on track to surpass 200 million active users this year:
In October 2017, Telegram reached 170 million monthly users, delivering 70 billion messages every day. At least 500000 new users join Telegram daily. At this rate, the service is expected to hit 200 million monthly users in Q1 2018. These users can provide the required critical mass to push cryptocurrencies towards widespread adoption
Ambitions to run the decentralized web

Telegram is best known for a messaging app, which the company claims in the documents is used for community communication in over 60 percent of ICO projects, but its own ICO is more extensive than monetizing that chat service.

The company is planning to develop the building blocks for a decentralized internet that could eventually power decentralized apps (known as DApps), smart contacts, censorship-proof websites and more.

The pitch includes four components, as we previously reported:
  • Distributed file storage akin to services like Dropcoin and ICO company Filecoin
  • A proxy service for creating decentralized VPN services and TOR-like secure browsing environments based on the blockchain
  • Services for decentralized apps, smart contracts and decentralized web browsing experiences
  • Payments for micropayments and peer-to-peer transactions
Putting these components together could allow Telegram to be the base for a new range of decentralized apps and services based on the blockchain. It could turn Telegram from a messaging app into a platform that hosts internet-based content which could, in theory, operate micro-paywalls that let users unlock news or subscriptions for small amounts of crypto payment, while there’s also the potential to become a major payment hub.

TON will provide the backbone for new kinds of internet services while also allowing existing social networks and messaging apps to join in, too.

Telegram said its services play, which lets other developers build apps and services on top of TON, can “be a gateway to blockchain-based projects for the masses — similar to how Google Play and the App Store currently work for centralized applications.”All of these goals, of course, require technology and Telegram’s 132-page whitepaper goes into much detail on that. Those technologies outlined in the whitepaper aren’t deployed by other projects right now, so they will require some time for development, but they are based on, or inspired by, ongoing efforts from other blockchain companies that remain in progress.

Blockchain developers who spoke to TechCrunch were underwhelmed by the lack of new technology in the whitepaper, claiming that it mostly uses theories from existing projects rather than pushing the envelope.

More details in full, as we reported last week:
The “TON Blockchain” will consist of a master chain and 2-to-the-power-of-92 accompanying blockchains. Its most notable aspect is that it will have an “Infinite Sharding Paradigm” to achieve scalability. Thus, TON blockchains aim to be able to “automatically split and merge to accommodate changes in load”. This would mean new blocks are generated quickly and “the absence of long queues helps keep transaction costs low, even if some of the services using the platform become massively popular”.

It will also consist of “Instant Hypercube Routing” designed so the blockchain can maintain top speed even as it grows. Its proof of stake approach will reach consensus through a variant of the ‘Byzantine Fault Tolerant’ protocol, again increasing speed and efficiency. And it will also use 2-D Distributed Ledgers. This means the TON can grow new valid blocks on top of any blocks that were proven to be incorrect to avoid any unnecessary forks. In other words, TON aims to be ‘self-healing’.

TON’s third generation blockchain will be based on a dynamic ‘proof of stake’ secured by multiple parties with a high degree of fault tolerance. It will also handle storage of ID, payments and smart contracts. So, instead of relying on proof of work to create its currency, Telegram will rely on a new, less energy-hogging way of mining cryptocurrency than the original Bitcoin method.

The claim is that it will be capable of a vastly superior number of transactions, around 1 million per second. In other words, similar to the ambitions of the Polkadot project out of Berlin — but with an installed base of 180 million people. This makes it an ‘interchain’ with so-called ‘dynamic sharding’.

Telegram CEO Pavel Durov speaking at TechCrunch Disrupt San Francisco

Huge discounts and a long wait

Once news of the project got out, most interest focused around the token sale itself with many investors sure the project will be a hit based on hype alone.

For the sale itself, Telegram is proposing to create five billion Gram tokens — which it plans to use the

symbol for — to be distributed as follows:

  • 10 percent held as incentives to develop the platform, including developer incentives
  • 4 percent kept for remunerating the developer team
  • 42 percent retained by the TON Reserve during the initial stages of the project in order to “protect the nascent cryptocurrency from speculative trading and to maintain flexibility at the early stages of the evolution of the system.”
  • 44 percent will be tradable, Telegram said
A recent trend in ICOs, also known as token sales, is to offer large discounts in the pre-sale phase to encourage large investors — known as Whales — to contribute. Telegram is requiring a minimum investment of $20 million for that — a number that is way higher than any other token sale to date — with discounts of more than 50 percent for those who take part. According to a document for investors, Telegram believes the pre-sale discount could exceed 70 percent of the final token price although the final numbers aren’t confirmed. That is insane.

With the final public sale price targeted at $0.97, that could mean some whales pay as little as $0.31, according to the prospectus.

Due to those enormous discounts, Telegram is proposing a varied lock-up period that would see the investors who enjoyed the largest discount unable to sell their tokens. Details are still being worked out, but lock-up periods could range from three to 18 months dependent on discount, with an option for partial lock-up, too.

There will be an uncharacteristically long delay before investors, both pre- and public, get their hands on their tokens. Telegram plans to release the Grams in December, with a schedule of January-March 2019 for when they will list on exchanges, thereby becoming available for everyone else and, crucially for investors, tradable.

Product roadmap

Plenty of ICOs are rightly accused of trading on hype and developing multi-billion dollar market caps for their coins without actually offering a product.

Telegram’s token sale will take place before the company’s product is available, but the tokens themselves will be released after a number of features according to the company’s rough guideline as shared with investors:
  • Q1 2018 — secure ID launch
  • Q2 2018 — MVP of test of network of TON
  • Q3 2018 — testing and security audit for TON
  • Q4 2018 — stable version of TON deployed
  • Q4 2018 — Telegram wallet launched
  • Q1 2019 — TON-based economy goes live inside Telegram
  • Q2 2019 — TON services, storage and proxy launched
By 2021, Telegram plans to step back and rename TON to ON with the network managed by its foundation. That’s not an entirely uncommon goal for token sale projects.

“Telegram will serve as a launch pad for TON, ensuring its technological superiority and widespread adoption on the initial stages, but the future of TON is in the hands of the global open-source community,” the company wrote in the whitepaper.

Unprecedented ICO

There’s a lot to unpack from the Telegram ICO, but it is clear that early reports of plans to develop its service into WeChat undersold the sheer ambition of this project.

Acutely aware of the unique position that their company occupies as the go-to app for the crypto community, Telegram’s founders are aiming to develop a platform of comparable scale to Ethereum and the many “Ethereum killers” that have launched over the past year or so. This ICO isn’t just designed to (finally) make money from the Telegram messaging app, it aims to build a platform for future ICOs, future cryptocurrencies, future decentralized applications and a new kind of censorship-proof internet system.

The question — like all ICOs — is whether the theory can become reality. Certainly on the tech-side, Telegram’s processes and protocols remain in development. The product roadmap reflects that and the big launches won’t happen until later this year (the Telegram wallet) and early 2019, when the TON-based economy goes live, which means there are no major clues as to when the public component of the token sale opens.

Given the fact that few ICOs even have a product in the market, let alone one with 170 million active users, you can expect that crypto-focused investors will be keen to grab a slice of this sale. How the pre-sale fares among more traditional VCs will also be one to watch.

Disclosure: The author owns small amounts of cryptocurrency including ETH.

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From: Elroy1/17/2018 11:15:06 PM
   of 5496
Breaking: Bitcoin Value Currently Plummeting—No, Wait—Skyrocketing—No, Plummeting

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To: Glenn Petersen who wrote (275)1/17/2018 11:51:44 PM
From: Sdgla
1 Recommendation   of 5496

New etf

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To: Glenn Petersen who wrote (281)1/18/2018 12:35:49 AM
From: Savant
   of 5496
ICOs moving closer to the 'old way' of doing biz..discounts for early, special groups, bit of a lock up...mebbe...YTBD,
accredited only early on....insiders maintaining control...not all bad, but, some things never change..big money rules...

The plans show promise, let's see how the follow through rolls out.

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To: Sdgla who wrote (283)1/18/2018 7:56:51 AM
From: w0z
1 Recommendation   of 5496
As I read it, neither ETF is actually investing in blockchain coins, but indirectly in companies (e.g. IBM, Microsoft, etc) using the technology. Therefore they are not truly "blockchain" ETFs which the SEC noted in disallowing the term in their description. I'm not sure about the legal status of ETFs directly investing in coins, but I believe that day will eventually come. I know baskets of related coins (e.g. IoT, security, big cap, small cap etc) is one of the options ETHOS plans to offer eventually once their legal bases are covered.

Related to my Picks & Shovels (P&S) investing theme, this offering by Ledger (i.e. Ledger Wallets like the Nano S) is going the usual VC route. Too bad Ledger is not publicly available because it would be a great P&S investment IMHO.

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To: w0z who wrote (285)1/18/2018 8:13:56 AM
From: Sdgla
   of 5496
I believe your read is correct.. which is why I posted it. The Blockchain is the focus of Glenn’s article not so much the coin. IOW the chain is the disruptor not so much the coin.

I confess to needing to read the article in its entirety multiple times in order to get my head around the complexity of the entire scope of the tech.

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To: Sdgla who wrote (286)1/18/2018 8:53:50 AM
From: w0z
1 Recommendation   of 5496
IOW the chain is the disruptor not so much the coin.

True, but there is not a single chain. There are many for different applications. Some are public (open source) and some are private (e.g. IBM and others). And there are even some challenging technologies to the blockchain concept itself (e.g. Tangle, Hashgraph, etc).

This technology is far from mature and the idea of an ETF or market basket of coins makes a lot of sense to diversify yet still be concentrated in the technology (more than the ETFs described previously would allow). Most of the 1448 coins (as of this moment) will fail but some will succeed and possibly even displace BTC's #1 spot (think about Netscape/Google, MySpace/Facebook, Palm/iPhone, Nokia/Apple-Android, etc).

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To: Sdgla who wrote (283)1/18/2018 10:03:47 AM
From: Glenn Petersen
   of 5496
The BLCN fact sheet:

BLCN ETF top holdings (As of 12/31/2017)

Company Country Weight (56 total positions)

1 Intel Corp USA 2.43%
2 Overstock.Com, Inc. USA 2.39%
3 Intl Business Mach USA 2.37%
4 Cisco Systems Inc USA 2.26%
5 Hitachi Ltd Rg Japan 2.23%
6 Microsoft Corp USA 2.19%
7 Hive Blckchn Tch Rg Canada 2.17%
8 SAP Se Ads USA 2.15%
9 SBI Holdings Rg Japan 2.13%
10 Barclays Plc Adr UK 2.08%

h/t Stock Watcher

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To: Savant who wrote (284)1/18/2018 10:40:15 AM
From: T'Munney
   of 5496
<<ICOs moving closer to the 'old way' of doing biz..discounts for early, special groups, bit of a lock up...mebbe...YTBD,
accredited only early on....insiders maintaining control...not all bad, but, some things never change..big money rules...>>

I would respectfully suggest that is the relatively 'new' way. Back in the day(80s and 90s) companies would form, have some success and then IPO with opportunities for the small investor. Now companies form, receive several rounds of financing from big money locking up cheap shares, and then IPO with enormous market caps.

The effect is, as you say, big money rules.

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To: Glenn Petersen who wrote (238)1/18/2018 10:42:47 AM
From: Glenn Petersen
2 Recommendations   of 5496
Blockchain will be the killer app for supply chain management in 2018

The distributed ledger technology that underpins cryptocurrencies is now poised to disrupt supply chain management – especially in the global shipping industry

By Lucas Mearian
Senior Reporter, Computerworld | Jan 18, 2018 2:57 AM PT


This year, blockchain testing programs will evolve from pilot tests to real-world platforms, and supply chain management is among the industries the distributed ledger technology is set to disrupt.

On Tuesday, Maersk and IBM announced a joint venture to deploy a blockchain-based electronic shipping system that will digitize supply chains and track international cargo in real time.

The new platform could save the global shipping industry billions of dollars a year by replacing the current EDI- and paper-based system, which can leave containers in receiving yards for weeks.


A new blockchain-based, distributed electronic ledger could save the shipping industry billions of dollars by replacing outdated systems for tracking cargo and getting approval from customs and port authorities.

A lot of companies are interested in blockchain for creating more efficient workflows, but supply chain management is one of the "big, killer apps," according to Vipul Goyal, an associate professor in the Computer Science Department at Carnegie Mellon University (CMU).

"For example, as goods move from one place to another or one part of a company to another..., companies are interested in using blockchains to keep track of how goods are moving and where they are," said Goyal, who is part of CMU's Cryptography Group.

Paul Brody, Ernst & Young's (EY) Global Innovation Leader for Blockchain Technology, said the blockchain market over the past 18 months has been going through an "explain this to me" phase (PowerPoint) into the "prove it to me" phase (working conference room pilots).

"Now we're in the 'Okay, build it for me' phase," Brody said via email. "We see this in our business: clients are moving projects towards production and...we have similar conversations with others in the industry."

Deloitte CTO Bill Briggs agreed: "You can go industry by industry and you're seeing concepts proven, pilots now moving into production. "Things like supply chain validation, food safety verification, consumer products companies and potentially industrial and even life sciences companies are starting to circle it."

Private or "permissioned" blockchains can be created within a company's four walls or between trusted partners and centrally administered while retaining control over who has access to information on the network.

Blockchain can also be used between business partners, such as a cloud vendor, a financial services provider and its clients.

Bill Fearnley, Jr., research director for IDC's Worldwide Blockchain Strategies, recently returned from visiting company clients in China where he found "everybody wanted to talk about supply chain.

"If you build a blockchain ledger within [a single company] that has a certain value," Fearnley said. "The real value blockchain is when you use distributed electronic ledgers and data to connect with suppliers, customers and intermediaries."

One major challenge with supply chain management today involves trade finance record keeping, because a lot of trade finance record keeping is still based on inefficient systems: including faxes, spreadsheets, emails, phone calls and paper.


Along with paper legal documents, much of the international shipping industry's information has been transmitted via electronic data interchange (EDI) – a 60-year-old technology. But once shipping manifests move to API-based technology on the new platform, shippers and everybody else in the supply chain will have more timely information and improved visibility, according to Michael White, former president of Maersk Line in North America and CEO of the new supply chain management company.

"One of the advantages of blockchain is the immutable record and trust people can have in it. If anything changes in a document..., it's immediately apparent to all," White said.

Manufacturers want to ensure goods get to where they're supposed to go and those purchasing the merchandise want to make sure it originated from a reputable source. By addressing both ends of that supply chain, it addresses the threat of counterfeit goods, fraud and theft, according to Fearnley.

Blockchain technology, which can be either an open ledger (seen by anyone) or a permissioned network (seen only by those authorized) addresses the supply chain challenge as it's an immutable or unchangeable record shared among network participants that's updated in real time.

"With distributed ledgers, manufacturers and retailers can all be looking at the digital and physical products in the supply chain, and they can all be looking at the same information, which enables them to cut steps in the shipping and payment reconciliation process," Fearnley said.

For example, if a retailer orders 1,000 widgets and only 990 show up, they can refuse to pay the invoice until the manufacturer can show where the other units are. And, depending on the contract, that can leave an invoice in limbo for days or weeks.

"If you're able to improve record keeping, with distributed ledgers, then you can improve reconciliation, and then you can speed up the payment process; you can reduce fraud and get people paid faster," Fearnley said.

Blockchain ledgers can also improve financial liquidity.

For example, an aggregated record between manufacturers or distributors and buyers can also include the financing partners, so that once all parties agree goods have been delivered, payments on invoices can be released.

"The sooner manufacturers and distributors can agree on shipments and receipts, the sooner manufacturers can be paid for their goods. Getting paid faster improves financial liquidity for members of the supply chain," Fearnley said.

Announcements like the one by IBM and Mearsk this week can provide additional credibility behind future blockchain-based supply chain management systems.

"The ability to build a shared record is the key here, and it would be harder for startups to lead the development of large scale ecosystems supported by distributed ledgers," Fearnley said. "It's better if some industry leaders get involved to help lead the development because many of them have established trusted relationships throughout the supply chain."

Senior Reporter Lucas Mearian covers enterprise mobile issues, including mobility management, security, hardware and apps, and enterprise collaboration technology.

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