While crypto-traders continue to stifle for the best blockchain and crypto in the space, the big tech companies are infiltrating it faster than the market perceives.
In the aftermath of the 2017 crypto bubble, regulators all over the world attempted to put an end to ICOs. The SEC (Securities Exchange Commission) went after some of the most popular ICOs of 2017 like Kik, Veritaseum, and so on. The ICO mania is considered dead for now.
However, even when ICOs are practically non-existent, newer blockchain projects are still finding their way into the market. This time it is backed by big tech companies or professional investors.
Hedera, Hyperledger, Telegrams’ TON and more
Reportedly, Telegram will begin public testing of its blockchain platform – TON (Telegram Network) on September 1, 2019. The firm has expedited its plan to meet the October 31st deadline. If the blockchain is not launched by then, according to the SAFT (Simple Agreement for Future Tokens), the investors can claim their money back.
NYTimes recently reported that the GRAMs cryptocurrency wallet would be made available for the 200-300 million Telegram users. Moreover, it also emphasized the uncertainty with a messaging app operating a cryptocurrency. However, there is more to it than meets the eye.
Telegram is taking a cautious approach “focusing on privacy rather than regulations,” Mati Greenspan told CoinGape in an emailed comment. He believes that the project launch will happen.
Recently, Hedera Hashgraph also announced the beta launch for September of its blockchain platform. It is backed by IBM, Tata Communications, Nomura and so on. The utility, governance, and investment model of the projects are also similar. They have partnered with accredited investors base on SAFT agreement.
Hence, the blockchain project will initiate shortly. Only, the information on the viability of crypto tokens in payment space is not clear.
Is Private Investing the New Technique?
Earlier this year in May, Bitfinex completed a private sale of its exchange backed token LEO UNUS LED. As it was already facing considerable problems with the New York Attorney General, this project seemed like a no-go in the beginning. However, the private sale brought in around $1 billion, which soon kick-started its trading in less than ten days.
Hedera and Telegram have also designed a similar module. Instead of conducting an ICO which could fall under the purview of an unregistered security, they are developing the network using the investment from professionals. Mati Greenspan noted about the TON network on facing regulatory hurdles. He says it wouldn’t meet them, because,
Number one is that they did not offer their ICO to the public.
It was only for accredited and professional investors.
This gives them a lot of leeway as most regulators focus on protecting retail traders and professionals have a lot more freedom to do their own research.
Blockchain, not Bitcoin or Cryptocurrencies – Scratch that
The projects proposed by Telegram and Hedera includes a cryptocurrency component in it – Grams and Hbar, respectively. This sharply contradicts the criticism on the utility of cryptocurrencies. For a public, permissionless network an inventive for ‘good behavior’ is a vital aspect that cannot be ignored.
The cryptocurrency distribution of the blockchain for Hedera is expected to long for 15 years. Telegram has also planned a long term distribution of its Gram Tokens.
Moreover, both these organizations are effectively building a platform for smart contract and Dapps. Platforms like Ethereum, EOS, Cardano (ADA), Tron, and others are already leading adoption in the space. However, most of these platforms were initiated via ICO.
ICO or SAFT (Simple Agreement for Future Tokens), most of these platforms are not entirely decentralized, at the moment. On how the regulators will view these in the future is still not clear.
They look like financial securities for now. Their transition to currency and approval from authorities will likely take longer.
The use of Grams token with 200-300 million worldwide will also raise questions with security laws. Moreover, the payments aspect of TON could face a backlash similar to Facebook’s libra. But that is for the future, since, the token distribution process is spread over a long period.
Which of these blockchain projects will be able to operate a globally approved currency? Please share your views with us.