Telegram has been locked in a fierce legal battle with the Security and Exchange Commission, which wants to block the company’s initial coin offering and halt the launch of its Telegram Open Network, or TON, blockchain.
But that hasn’t stopped the social network from pushing ahead with the technical details of its project. On Feb. 3, Telegram issued the latest version of its whitepaper for its TON blockchain—a key piece in actually launching its gram tokens and fulfilling the promises it made to its investors.
Telegram presold $1.7 billion worth of gram tokens to wealthy investors in 2018. Its plan was to allow those investors to take ownership of their grams on Oct. 31. That’s when TON was originally supposed to go live, and that’s when investors would be able to resell their grams to the public for a handsome profit. Since then the SEC got the court to temporarily block the launch of TON. And now the agency is pushing for a permanent injunction.
While Telegram has been vigorously fighting the SEC, it is also trying to weaken the agency’s legal arguments. That includes going back on what it promised investors in its sales agreement. Specifically, that is that grams would be available in the Telegram app. Now the company says the TON wallet will be standalone, which undercuts its whole value proposition: instant access by Telegram Messenger’s 200 million users.
Telegram is also trying to make it look to investors like work on the network is proceeding as planned, and the company is on track to launch TON on April 30, its latest deadline.
One man behind the paper
What the first two papers lacked, however, was an in-depth description of the consensus algorithm, which is how the nodes in the system reach agreement on the next block in the chain.
The current TON whitepaper describes a Byzantine-fault tolerant style proof-of-stake network dubbed Catchain. (BFT simply describes how the network defends against attacks from dishonest nodes.) In that sense, it is similar to other PoS protocols like Tendermint (Cosmos), Algorand, Ouroboros (Cardano), and Casper. But unlike those, TON expects to have only 100 nodes in its system, making it more of a centralized delegated proof-of-stake model, similar to EOS.
The name Catchain derives from “catch-chain” because TON is “a special blockchain dedicated to catching all events important for the consensus protocol,” the whitepaper said.
Telegram claims that running 100 nodes, its Catchain protocol can generate new blocks every 4-5 seconds, according to tests it carried out in December 2018. (For comparison, Bitcoin generates a new block every 10 minutes, while Ethereum generates a block every 10 to 20 seconds, but both of those are proof-of-work systems.)
Similar to Telegram’s 2017 whitepaper, the only name on this latest whitepaper is Nikolai Durov. He is Telegram’s technical co-founder and the older brother of Russian developer Pavel Durov, who is also behind Telegram. Nikolai has two Ph.D.s in math, so he is obviously very clever, but it’s a little surprising to see he is the only author of the paper.
It is pretty unusual to see a researcher create a platform like this all on their own. The whitepaper for Algorand has five names on it, and one of them is Silvio Micali, a Turing-award winning computer scientist. An Ourobous whitepaper has four names on it.
Also odd, a search for the word “security” in the Catchain paper comes up clean, despite the fact that one of the main functions of a blockchain is making sure funds don’t get stolen. Algorand, in contrast, mentions security 16 times in its white paper. The word appears four times in the Bitcoin whitepaper, and 14 times in the Ethereum whitepaper.
One could argue, though, that the main purpose of TON is to get grams into the hands of the investors, so Telegram doesn’t have to return the $1.7 billion in cash those Silicon heavyweights and wealthy Russians handed over in good faith.