Telegram Cancels Its Public ICO. What Does This Mean?
There has been a lot of information in the press regarding Telegram’s canceled ICO over the past couple of weeks – and for good reason.
More than $12 billion has been raised since the first ICO was launched over four years ago. Close to $2 billion of this figure was from small private investors backing Telegram’s ICO.
It’s safe to say, the ICO was a pretty big deal.
What is Telegram?
Telegram is an encrypted messaging service that is completely free to use and has no ads.
It is available both on the web and via an app, and it allows users to send and receive any kind of media or document. The program even enables users’ messages to self-destruct after a period of time.
A single Telegram message thread can host up to 100,000 users. As a result, many communities around the world choose to use it as their internal social network.
It has hit the #1 spot for social networking apps in several different countries. It is especially popular in areas where Internet access is closely monitored by the government.
Bringing Telegram to the Blockchain
Earlier this year, Telegram announced that it was creating a Telegram Open Network (TON) that would be powered by the blockchain and have its own cryptocurrency.
This project was designed to move the app from simply being a messaging system, into a platform that would enable mobile payments and various other value transactions. TON would improve upon the transaction times and fees of other rival cryptocurrencies like Bitcoin.
The team has described their solution as, “a decentralized counterpart to everyday money – a truly mass market cryptocurrency.”
What’s the Story Behind Telegram’s ICO Cancellation?
Telegram’s white paper stated that the goal was to raise $1.2 billion through an invite-only private sale, then open up the sale to the public.
The sale, which attracted both extreme user interest and a lot of regulatory concern, was set to be one of the biggest cryptocurrency opportunities in history.
However, when the time came, Telegram ended up extending their private ICO to raise $1.7 billion, before announcing that they would be canceling their public ICO.
As it turns out, the $1.7 billion that was raised during the ICO came from a small group of only 200 private investors. This group was limited to institutional investors and high net-worth investors who had undergone accreditation.
The reason behind the cancellation of the world’s largest cryptocurrency fundraising effort remains unclear. However, there is speculation that it could be a result of increasingly tight regulations in the crypto space.
Could ASK.fm’s ICO Be the New One to Watch?
For the millions of people who lost out on participating in the Telegram ICO, all hope might not be lost – ASK.fm could be the new company to watch.
Just like Telegram, ASK.fm is an established platform which already has its own 200 million-strong user base.
You might have already heard of this social question and answer platform. It has been around since 2010 and has already successfully monetized its service. It has over 215 million users to date.
Image source: Ask.fm
This alone separates it from the vast majority of other ICOs out there.
ASK.fm has already laid out its entire vision for how it will tokenize its services in a way that rewards stakeholders.
Following the disappointment caused as a result of the cancellation of the Telegram ICO, ASK.fm’s ICO might just be the new one to jump on.
Will Increasing Regulations Have a Significant Impact on the Crypto Industry?
Although the cause of Telegram’s ICO cancellation still hasn’t been fully revealed, it begs the question: how much will increased regulation affect ICOs of the future?
2017 was the year of the ICO boom, and 2018 will be the year of increased ICO regulation.
Countries including the United States, China, Japan, South Korea, Europe, and the rest of the world have already started making crackdowns on ICOs.
Since these crackdowns and increased regulations began, both the number of ICOs and the amount of money raised per ICO has been steadily decreasing.
Many people fear that this will have a negative impact on the industry. However, the more likely outcome is that it will simply separate the wheat from the chaff by weeding out low-value ICOs with little to offer so we can turn our focus to projects with more to offer.
Image source: Askfm.io
As a result, it is likely that more projects will be required to follow a model similar to that of platforms like ASK.fm – by first establishing their own user base and creating a working model.
Gone are the days of newly established crypto companies just diving in headfirst and hoping to make it big – and that’s definitely a good thing.
This article is written by a guest author
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