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Telegram transmits technical whitepaper, trials with the SEC continue...


Currently facing a legal battle with the U.S. Securities and Exchange Commission over its $1.7 billion token sale, Telegram have revealed more details about the technical specifications underpinning its TON blockchain in a recently released whitepaper.


The whitepaper details the block validation process for its blockchain, describing it as a Byzantine Fault Tolerant protocol custom-built for proof-of-stake networks. TON Labs’ Mitja Goroshevsky said:

The new consensus protocol white paper provides a formalized understanding of what they’ve [TON developers] been testing.

He added:

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.

The whitepaper was previously planned for release in October, when the network was originally scheduled to go live. However, the SEC litigation imposed an abrupt halt to the process.

The protocol was tested in December 2018 and according to the whitepaper, up to 300 nodes were distributed all over the world. The testing displayed that “the TON Blockchain is able to generate new blocks once every four to five seconds, as originally planned."


According to the explainer released by TON Labs, Catchain is a Practical Byzantine Fault Tolerance (PBFT) partly similar to those used by Tendermint (Cosmos), Algorand, Ouroboros and Casper, relying on a proof-of-stake model (rather than an electricity hungry proof-of-work model). 


In Catchain, each round of verification includes three steps:

  1. Validator nodes exchange block candidates for approval

  2. The primary node for the current attempt sends the candidate block for voting to the rest of nodes

  3. Then the validator nodes exchange votes. 

If the validators fail to reach a consensus that round is skipped and the new block is not committed to the blockchain.


The release of the whitepaper is well timed, and will be read in response to the claims made by the SEC that Telegram has not created a viable blockchain, as it promised to do, and "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.”


Telegram responded to these allegations stating that, “it is the SEC’s burden to prove that Grams will be securities, not Defendants’ burden to prove their technology works.”


The kind of proof-of-stake system in use in the Catchain system is an exciting evolution of Blockchain technology, but for lawyers in the space, the Telegram vs SEC saga is top of our reading lists whenever new material is revealed.