Telegram Drops Technical White Paper for Blockchain SEC Is Trying to Halt

Telegram, the messaging app company currently facing a legal fight with the U.S. Securities and Exchange Commission over its $1.7 billion token sale, revealed more details about the technical specifications underpinning its TON blockchain Wednesday.

A new white paper details the block validation process for its blockchain, describing it as a Byzantine Fault Tolerant protocol custom-built for proof-of-stake networks. The company was sued by the SEC last year on allegations it sold unregistered securities during the pre-sale of its upcoming gram tokens, the native cryptocurrency for TON. However, this litigation does not appear to be halting any development on the TON platform.

Developers, led by the TON Labs startup, have been kicking the testnet’s tires since last spring. The new consensus protocol white paper will give these individuals “a formalized understanding of what they’ve been testing,” TON Labs’ Mitja Goroshevsky told CoinDesk.

“Consensus protocol is a central part of any blockchain and it needs to be described for the further analysis of the blockchain and its code,” Goroshevsky said.

The paper was previously planned for release in October, when the network was originally scheduled to go live, until the SEC’s litigation disrupted the process.

“The protocol hasn’t changed since then,” he said.

The protocol was tested in December 2018 on “up to 300 nodes distributed all over the world,” according to the white paper. The testing apparently showed that “the TON Blockchain is able to generate new blocks once every four to five seconds, as originally planned.”

According to the explainer TON Labs released, Catchain is a Practical Byzantine Fault Tolerance (PBFT) partly similar to those used by Tendermint (Cosmos), Algorand, Ouroboros and Casper. 

In Catchain, each round attempt includes three steps: validator nodes exchange block candidates for approval; the primary node for the current attempt sends the candidate block for voting to the rest of nodes; then validator nodes exchange votes. 

If the validators fail to come to consensus, the “round is skipped and the new block is not committed to the blockchain,” TON Labs’ explainer said. “If validators fail to reach consensus for a few rounds, new validator election can resolve the deadlock.”

In its arguments filed with the court, the SEC has argued Telegram didn’t create a viable blockchain, as it promised to do. While aspiring to outperform bitcoin and ethereum, “Telegram has presented no concrete evidence that it has achieved that goal” providing merely a “vague, conclusory statement” the blockchain is “fully functional and ready to be launched,” the agency insisted.

Telegram fought these allegations as irrelevant, saying, “It is the SEC’s burden to prove that Grams will be securities, not Defendants’ burden to prove their technology works.”