Morning Report: Telegram’s impending ICO asks an interesting question: what about bitcoin?
Earlier this morning, TechCrunch reported that Telegram, a popular encrypted chat app, is planning a massive initial coin offering (ICO). The ICO is unique in that it will serve as a funding event, directional market data point, and, it seems, technological achievement.
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Here’s TechCrunch:
According to multiple sources which have spoken to TechCrunch, the “Telegram Open Network” (TON) will be a new, ‘third generation’ blockchain with superior capabilities, after Bitcoin and, later, Ethereum paved the way.
That makes an interesting (and oddly somewhat obvious) point that crypto is advancing as an asset supergroup faster than bitcoin itself can mature. Hence, Ethereum as a later-comer that has carved out its own niche as the de facto platform for ICOs.
Until now, it seems, with something new on the way from Telegram.
This brings up a question that we asked the other week when bitcoin’s percentage of the aggregate crypto class of securities, coins, and other work fell:
But what might happen if bitcoin falls to a low enough percentage of the crypto market that it’s no longer an obvious store of value in comparison to rival offerings? And then it doesn’t do really much at all that is useful.
I would tack on a question mark instead of a period at the end of that; however, you can follow it well-enough as written.
This connects to the Telegram story neatly. Bitcoin’s falling market share to Ripple’s XRP token was notable, just as the rising value of Ethereum’s ether token previously pushed bitcoin down a notch. Telegram is betting that there is even more space apart from bitcoin to be found in the crypto space, which could lower the market share of the most-famous crypto yet again.
Happily, we are not speculating in the dark. Indeed, TwoBitIdiot wrote an article earlier this year that made the rounds over the weekend. In his “95 Crypto Theses for 2018,” the following comes in at 52:
Most crypto funds will (net of fees) underperform vs. BTC and ETH as benchmarks (as they have for the past six months). I said this back in August, and it’s even more true today with bitcoin dominance nearing historic lows of 36%. (36%!!!)
If 36 percent is so notable that it demands both repetition and three exclamation points, we can presume that it is a decently sized deal.
This leaves us with the obvious question: What does the value of bitcoin look like when it is just 20 percent of the crypto space (by dollar value of circulating tokens or whatever similar metric you want)? Telegram is betting, at least implicitly, on that future.
In the meantime, the sheer amount of attention that tech and the larger technology-focused media is paying to crypto will either look completely reasonable or utterly risible in a year’s time.
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