Telegram will launch a decentralized blockchain, thus distancing itself from cryptocurrencies such as Libra. Facebook plans to offer a financial service, whilst Telegram focuses on technology.
A growing number of social media companies and messaging applications decide to embark on the blockchain industry and launch their cryptocurrencies, of which the most prominent are Facebook and Telegram. The venture reveals that the eternal versus between centralized and decentralized blockchains is also present in the companies of this industry.
The interest of the sector in cryptocurrencies is very obvious. First, Kik (the instant messaging application founded in 2010) started planning the launch of its token Kin, then in 2017 Telegram revealed the details of a future blockchain, and finally in 2019 Facebook confirmed that it would also join the stablecoin market.
Firms like Facebook and Telegram have decided to innovate and take advantage of an industry that generates good profits. However, although these two companies provide similar services, they have diametrically opposite ways of addressing and developing their new blockchain products. While Facebook has decided to create a cryptocurrency based on the governance of an association, Telegram prefers to work on a project for collective development
Two Different Visions
As Bitcoin founded the ecosystem, the community adopted much of the ideology of this group as their own. In this sense, independence, privacy and, therefore, the decentralization of power are unquestionable principles in the ecosystem. Under this view, the emergence of blockchain platforms with centralized governance is very controversial, since they go against the peer-to-peer (P2P) financial ideal that Bitcoin introduces.
However, because Bitcoin is open source and blockchain technology has an increasing impact on a financial level, many companies are adopting these networks under the governance of a few to maintain greater control over their projects. Facebook is an example of how a social media company may be interested in blockchain technology but not in its decentralized operation.
A few months ago, the board decided that its cryptocurrency would be managed by a group, called the Libra Association, composed of over 20 companies in the financial and digital commerce sector. The entity has a board of directors and an executive team, who make decisions about the fate of Libra.
The Facebook project has received strong criticism due to this decision since users believe that Facebook and its affiliated companies could condition its operation. The censorship of transactions and the development of the crypto asset unilaterally are some of the concerns that are visible in centralized governance.
Most companies prefer to develop centralized blockchains to continue to maintain control over their projects. After all, it is a product that, in most cases, has been launched to generate profits or benefits. However, other firms do not seem so interested in generating profits having total control over the network that they created.
Telegram announced in recent days that its TON blockchain will be fully decentralized. The board not only decided that the project will not have a foundation or management entity, but will also stop contributing to its development after the launch. Telegram’s decision causes surprise after the flood of criticism that Facebook received in 2019.
By Alexander Salazar