Telegram, the developers of the popular and notorious encrypted messenger application, have made initial coin offering history with their very successful and ongoing ICO, which has already raised $850 million from corporate subscribers. On the heels of this historic event, we are examining this largest-ever initial coin offering and asking why it has been so popular, and whether it suggests that the field of cryptocurrency ICOs is maturing.

Why are Initial Coin Offerings So Popular?

Cryptocurrencies burst into public consciousness in 2017, with the exponential rise in prices of the major cryptocurrencies fueling a frenzied, speculative bubble. It was not only the major cryptocurrencies which benefited from enormous price increases – investors looking to buy cheap and get in at the ground floor of the next “big thing” sought out smaller, newer cryptocurrencies. Many of these new cryptocurrencies were capitalized through crowdfunding, whereby funders receive initial “coin” in the new cryptocurrency in return for financing it with legal tender fiat currency. The term “ICO” (initial coin offering) was “coined” to reflect the experience of an “initial public offering” by which a hot, newly public company offers its shares which typically then trade at a premium as soon as they hit the market. Speculators and investors have been eager to cash in on new cryptocurrencies in the same way many were happy to get their hands on new public shares of technology companies in the 1990s, or newly privatized utilities in the U.K. during the 1980s. It is against this background that Telegram recently completed the largest ever ICO for their new, currently unnamed cryptocurrency.

The Source of Admiration for Telegram

Telegram is a non-profit, cloud based instant messaging service, founded in 2013 by Pavel Durov. It has made a name for itself, as compared to similar technology applications, in the same way that Bitcoin made a name for itself against fiat currencies such as the U.S. Dollar. If that seems like a strange comparison, here is why I make it: Telegram is open-source, transparent, democratic, non-profit, and above all else, confidential. Telegram has positioned itself on the edge of a very live political debate – whether individuals will be able to enjoy digital privacy, free from spying eyes. Other communication apps such as Facebook or Twitter exist to make money, and they pander to corporate and government interests while taking the data of their users for free. On Telegram’s site, the FAQs include the following statement, which has come to be politically extraordinary in 2018: