Telegram’s public image of Pavel Valeryevich Durov is that of a fighter pursuing freedom in the business world: Facing big capital, he responded to rumors of the Internet giant Mail.ru’s acquisition of VKontakte (hereinafter referred to as VK) with a photo of his middle finger raised. Faced with the Russian government's request to censor the comments on VK, he sent out photos of "dog heads" one after another.
But the above are all Durov’s stories when he founded VK, Russia’s largest social networking site. Durov is better known and credited for creating Telegram. This social software is a headache for governments all over the world. Because the content on it is difficult to crack, it has become a free front for some anti-totalitarian people and a breeding ground for various crimes.
However, this is also naturally consistent with the spirit of blockchain fundamentalists: fighting totalitarianism, advocating liberalism and people being responsible for themselves.
Durov himself is a fan of the encryption world, and Telegram is naturally close to encryption: it is a public chain, equipped with third-party encryption wallets, trading robots, and username confirmation and transactions on the blockchain, etc.
As a social software with over 800 million users worldwide, Telegram’s inbound encryption is undoubtedly a dimensionality reduction blow to existing Web3 applications. But the story of Telegram goes far beyond encryption. What happened when Durov was forced to give up his own creation of the Russian social software VK and start Telegram's business is a unique business legend and a story of how liberal political ideals are realized in the business world with the help of blockchain technology.
Liberals once hit a brick wall in business
To understand why Telegram is so close to encryption, we must first understand founder Pavel Valeryevich Durov.
Durov does not like to be interviewed by the media, but based on some interviews with people around Durov and his own social dynamics, Durov's image is roughly sketched: he wears black clothes all year round, loves fitness, has a toned body and a handsome face. Unruly, in order to defend his belief in freedom, he rarely bows his head in the face of power and capital. He is a technical genius with an obsession with privacy. After founding Telegram, his whereabouts have been elusive... Of course, in the eyes of people around him, angels also have a devilish side. When he was in college, Durov founded a website to help students cheat. Some classmates said that he was a young man with strong vanity. He rarely had a common language with others, but he also cared extremely about the opinions of people around him and wanted to make himself look successful.
This Russian born in 1984 (now a citizen of the United Arab Emirates), Durov's wealth was valued at US$11.5 billion in 2023. Ranked tenth overall among Russian billionaires. To this day, Telegram is privately owned by the Durov brothers, and unlike other commercial companies, Telegram refused to raise funds from traditional venture capital companies. Instead, the founders spent their own money to develop it, and later turned to ICO and bond issuance.
But among Durov's many characteristics, the one most closely related to encryption and his conception of Telegram is that he is a libertarian.
The impact of this feature was already evident when VK was first founded.
Just like with Telegram, Durov completely indulged all kinds of speech and piracy on the VK platform. However, as VK continues to grow and has sufficient influence, the conflicts brought about by this "freedom" also break out.
In December 2011, Russian protesters organized an event on VK out of doubt that the Russian State Duma election was rigged. This incident became the trigger for the Kremlin to suppress Durov. However, faced with the order to delete his account and page, Durov still did not execute it. Instead, he turned his VK page, Twitter and Instagram accounts into a battlefield, using ridiculous pictures of cute pets to express his dissent.
According to the story circulating, Durov's intransigence led directly to the armed forces entering his home on the night he posted the photo. What happened next, like all stories of government intrusion into business, was that Durov slowly lost control of VK, and VK was therefore controlled by Mail.ru, a company close to the Kremlin.
Later, Durov's shares were increasingly diluted, and the end of the story about VK and him was that he was removed from the CEO position by the board of directors.
He is a typical liberal who believes in freedom of speech above all else. When he took control of VK, he was often asked by the Russian government to censor his speech and delete posts, which was completely contrary to Durov's political philosophy. And Durov himself has a relatively tough character and is unwilling to bow his head, so the eventual outbreak of direct conflict became inevitable.
However, while running VK, Durov also had to compromise. After all, the company was not owned by him alone, and the combined power of politics and capital was strong enough. In the end, VK agreed to share user information with the Russian Federal Security Service. Durov then threw several paper airplanes made of 5,000 rubles from the window of his St. Petersburg office. He said the move was to prove that the company's decision was not motivated by money.
Embracing encryption is both a political ideal and a necessary business choice
The paper airplane later became the icon of Telegram.
In January 2014, Durov completely sold out his shares in VK. Durov left Russia and began his "wandering" career. What was sold was not only shares, but also all fixed assets such as houses and cars.
Before going into exile, Durov had already started Telegram with his brother. The widely circulated version is that he realized the importance of personal privacy while running VK because he was monitored by the government. The company is headquartered in Dubai, but Telegram does not have a fixed office location. He and the core team move offices around the world. He holds all shares of Telegram in order to avoid a similar ending to VK.
Telegram supports free speech, follows end-to-end encryption (although users are required to manually select private chat mode), and does not conduct any censorship of content on the platform. This brings freedom of speech to people, and of course, because there is no review, it has become a hotbed for crime: drug dealing, personal information trading, and even similar groups such as "Korea Room N" can be found on Telegram.
This was Telegram’s initial background, although it later made some “right” compromises, such as blocking accounts, robots and channels related to terrorist organizations, child abuse, etc.
But at heart, Durov is still an extremely liberal person and a supporter of blockchain and virtual currencies. In 2012, during the VK period, he publicly suggested that Russia abolish the existing monetary system. And he himself publicly stated that he owns Bitcoin. In 2012 he issued a manifesto he named "Liberalism" in which he elaborated on his ideas on how to improve Russia. In the manifesto, Durov advocated reforming the Russian education system; abolishing taxes on the information sector; abolishing the visa system, registration and military conscription; reducing tariffs; giving regions full autonomy; and opening up jury trials.
With such a background, it is not surprising that Telegram is involved in encryption. Durov’s ambition is to start from the public chain and build an encrypted world that integrates Telegram and architecture. In 2018, Telegram released its own digital currency Gram and blockchain platform TON. Recalling that 6 years ago, Durov advocated abolishing the ruble, supporting digital currency, and decentralization. Six years later, he began to implement his original ideas.
The public chain TON aims to provide Telegram users with fast and secure decentralized payment, digital identity and other services. As a Layer 1 public chain, compared with similar Ethereum and Solana, its biggest feature is that it is scalable and shardable, and has the advantages of ultra-fast transactions and low fees.
Judging from the characteristics of TON, it is hoped that it can carry the large-scale needs of a large number of users. Another feature of TON is the asynchronous architecture. Although it limits the development of TON in the DeFi field, it also confirms that large-scale adoption is the true vision of TON. It is precisely these characteristics that TON was described from the beginning as a decentralized application and service platform similar to WeChat, Google Play or AppStore, or even a decentralized alternative to Visa and Mastercard payment processing services.
Allowing Telegram users to better enter the encryption world may be the vision of TON. For example, the payment and wallet applications on Telegram are currently installed on TON. On TON, a full ecosystem involving NFT, Defi, Dex, games, etc. has been formed.
Durov, who learned the lesson of being cannibalized by capital from VK, did not raise money for Telegram through traditional fundraising methods. Instead, it turned to crypto industry funding methods. TON raised more than $1.7 billion through an ICO of its token Grams. However, in 2019, strong supervision in the United States ushered in. The U.S. SEC sued Telegram, accusing it of conducting unregistered securities issuances. Subsequently, the Telegram team suspended TON's mainnet launch, and finally chose to give up in the fight with the SEC, halting the development of TON and returning ICO funds to investors.
In 2020, Telegram announced that it would abandon TON. However, the technology supporting the project continues. Even for such an open source project, the "independence of TON" has brought new opportunities and vitality to its development. Because of the participation of the community, the TON public chain project has become a more decentralized project, realizing the co-construction of the community.
From 2020 to 2021, the NewTON team restarted the development of TON based on open source data. The NewTON team also changed its name to the TON Foundation to support and develop TON as a non-profit community.
This is the TON we are familiar with now, and its full name is TheOpenNetwork. Although TON has so many advantages, it is undeniable that its current situation is mediocre and ecologically lacking. According to Defiliama data, the current TVL on TON is $10.65m, ranking 61st.
Telegram uses ICO to raise funds for itself. On the one hand, Durov himself is naturally close to encryption. On the other hand, the real dilemma exposed is that Telegram is not profitable, and Durov, who is unwilling to compromise with "capital", may have no other way to go. From some aspects, although Telegram has a hot product and market fit, it has not yet achieved product and business model fit. For Telegram, embracing encryption is also an exploration to achieve better commercial profitability.
Analogous to WeChat, access blockchain third-party programs on Telegram
At this year's Token2049 conference, Telegram officially stated that Telegram would be transformed into a Web3 portal through TON. Although TON has become independent from Telegram, they still cooperate frequently.
Telegram has long become a must-have APP installed in the encryption industry. The founder of Telegram stated in his personal channel on July 18 this year that Telegram has more than 2.5 million new users registering every day, and its monthly active users have exceeded 800 million.
In fact, Telegram is not only integrating third-party blockchain applications in an orderly manner. This is similar to the integration of various third-party mini-programs into WeChat, allowing users to directly use third-party services, such as "taxi-hailing, financial management," etc. without leaving the platform. Telegram serves as a traffic pool. And Telegram has stepped into the game, such as launching the Telegram Passport function.
Telegram Passport is designed to help users complete services that require personal identification through unified authorization. Telegram officially states that "just upload your certification document file once, and you can immediately share your data with service providers that require real identity authentication, such as financial and ICO, etc." This identity information is stored in an end-to-end encrypted manner.
In July this year, the TON blockchain launched Telegram's new WalletPay function, which allows future merchants to integrate wallet robots in Telegram to collect cryptocurrency payments. Users can pay Bitcoin, USDT, and TON to merchants within the App.
And users can make deposits and withdrawals directly through bank cards, and can use @wallet to directly pay for many services in the telegram ecosystem. For example, you can buy telegram Premium directly, or buy a virtual eSIM phone card in @Mobile, or even use TON to trade usernames in telegram.
It is understood that WalletPay operates completely independently from Telegram. Wallet bots and applications are based on the Telegram WebApps open protocol, which allows developers to create their own applications and services on Telegram. However, commissions will be charged on transactions. In fact, the cooperation between Telegram and TON has not been interrupted. Telegram has also integrated TONSpace, a self-hosted encryption wallet launched by TON.
Another commendable feature is the "Fragment" function. On December 7, 2022, Telegram officially announced that users can have a Telegram account without a SIM card and log in using the anonymous number supported by the blockchain provided on the Fragment platform. In October of the same year, Telegram was able to implement username auctions on the Fragment platform, which meant that the power and assets of the social media platform had begun to be transferred to users.
This is an important milestone. As Durov said, this is the first time in the history of social media that a fair and transparent username market will be established, and people will have ownership of their own social media addresses. These addresses are protected in an unchangeable ledger "TON" on a decentralized blockchain network. Purchasing a username requires Toncoin. The launch of this application actually enriches the ecology on TON.
This is a smart contract similar to NFT that confirms the user's username on the blockchain. According to Durov's own news, 50 million US dollars of usernames were sold in less than a month after Fragment was launched.
And precisely because of Telegram’s openness and tolerance for encryption, many innovations that build a bridge between Web2 and Web3 around Telegram and encryption have been launched one after another. For example, trading tool robots built into Telegram like Unibot are undoubtedly a hot topic this year. Similar trading robots allow users to issue trading instructions in the form of a conversation with the robot in Telegram to complete the trading activities of on-chain tokens on Uniswap, such as token exchange, copy trading, limit orders, private transactions, etc.
From accessing the wallet to support virtual currency transactions and payments, to confirming the user's personal data and being able to trade it. This is a major innovation for Web2 social products. Compared with the Socialfi products currently trying in this direction, Telegram, which has such a large number of users, is undoubtedly a dimensionality reduction blow.
What Telegram is doing, and what various project parties are doing on Telegram, is also making the connection and communication between the Web2 and Web3 worlds smoother. This is one of the futures of the industry.
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