by Zain Jaffer
Note: I have no investments in TON and Telegram. This is merely for information purposes and is not financial advice.
Before I ended up in real estate investing, I found my success with a mobile advertising startup called Vungle that was acquired by private equity firm Blackstone in 2019 [https://www.blackstone.com/news/press/blackstone-closes-acquisition-of-vungle-a-leading-mobile-performance-marketing-platform/]. This is why I have always had a soft spot for new developments in mobile platforms. One of those platforms that has grown by leaps and bounds over the past few years is Telegram [https://web.telegram.org/a/] which is reported to have surpassed 900M users globally [https://www.ft.com/content/8d6ceb0d-4cdb-4165-bdfa-4b95b3e07b2a].
With the recent arrest of its founder Pavel Durov in France for issues related to nondisclosure of information to authorities on messaging involving criminal activity, Telegram has come into public scrutiny. Telegram is an encrypted cloud-based, cross-platform, instant messaging (IM) service with voice call capabilities available for desktop and mobile use. Although Meta platforms like WhatsApp and FB Messenger now have encrypted capabilities, Telegram was really one of the first to offer secure encrypted privacy protection for messages and voice calls [https://thenextweb.com/news/telegram-introduces-end-to-end-encrypted-video-calls]. It was founded in 2013 by brothers Nikolai and Pavel Durov.
Previously, the pair founded the Russian social network VK, after it had been taken over by the Russian government. The platform has a strong tradition of being used for global protests, as The Guardian reports [https://www.theguardian.com/media/2020/nov/07/nobody-can-block-it-how-telegram-app-fuels-global-protest]. A March 2024 Financial Times article reported that Pavel Durov fled Russia in 2014 after refusing to share the data of certain Ukrainian users of VK with Russia’s security agency. Durov had to unload his shares in VK to Kremlin-friendly oligarchs under duress for $300mn [https://www.ft.com/content/8d6ceb0d-4cdb-4165-bdfa-4b95b3e07b2a].
Unquestionably, Telegram has grown to become one of the world’s biggest messaging apps alongside FB Messenger, WhatsApp, China’s WeChat, and others.
But aside from messaging, what else can it be used for?
One of the fastest growing uses for Telegram is mobile gaming. In early July 2024, Cointelegraph reported that one of the games, Hamster Kombat, hit 239M users 81 days after launch [https://cointelegraph.com/news/hamster-kombat-239-million-users-telegram-durov]. That is impressive by any measure and there is talk of it getting a Guiness World Record [https://cointelegraph.com/news/hamster-kombat-guinness-world-record-200m-users].
If you are a fan of popular desktop games such as Minecraft, Roblox, Fortnite, Counterstrike, and League of Legends [https://newzoo.com/resources/rankings/top-20-pc-games], you should probably relax. These games are in high resolution, sometimes featuring realistic movement, sound, and other special real time effects. Telegram games are quite simple, and probably not going to dethrone any of these games for expert and fanatic gamers soon. Instead games like Hamster Kombat are much like the old Atari games or even Space Invaders or Tetris. Many of these involve rapid pressing of falling or moving objects across the screen to get and accumulate points. From a game enjoyment standpoint, it is a mixed bag. Fanatic gamers might get too bored with it, but for ordinary people who are on Telegram, it might be more akin to the enjoyment they get from playing Candy Crush, or similar games.
But there is actually more to Telegram games than meets the eye. A Telegram affiliate has actually launched a tradeable crypto token called TON, named after its blockchain, The Open Network [https://ton.tg/]. Actually Telegram launched their own blockchain before but was halted and sued by the US SEC in 2019 [https://www.sec.gov/files/litigation/complaints/2019/comp-pr2019-212.pdf]]. The new TON blockchain is not really owned by Telegram, but by a cooperating entity, which is probably a way to skirt the SEC ruling.
Going back to the games, what Telegram wants to do is to convince their 900M users to use these easy games, then earn points for their tradeable TON token [https://coinmarketcap.com/currencies/toncoin/]. In other words, it is a slick way to onboard millions of people into crypto and blockchain without too much technical difficulty. You are just playing a very simple game, and are earning points to exchange for the TON token. This is compelling enough to attract millions of users, particularly in less developed countries, where small amounts are enough to make them feel like kings for a day.
Americans have probably heard of China’s superapp, WeChat, where you can do your messaging, payments, games, shopping, and other needs. Telegram is also after that market. So is Elon Musk’s Twitter [https://www.coindesk.com/business/2023/08/31/elon-musks-x-has-licenses-in-multiple-us-states-to-process-payments-including-crypto/].
Needless to say, where there are millions of eyeballs, advertising is sure to follow. Telegram is cognizant of that fact [https://ads.telegram.org/getting-started].
It remains to be seen whether Telegram can capture the lead in this superapp category, but these easy to play games are making it easy for millions to be convinced to hop onboard.