Bitcoin Wallet

Wikipedia co-founder says Bitcoin doesn’t work, BTC community snaps back

BTC proponents argued to Jimmy Wales that banks may work, but they’re not available to everyone, and that storing BTC personally and storing fiat via banks are two different things.

Wikipedia co-founder Jimmy Wales took to X (formerly Twitter) on Dec. 11 to take a shot at Bitcoin (BTC), bragging that while many users have lost their Bitcoin because they forgot their wallet passwords, he’s never lost any money due to losing his bank password.

Wales’ comments didn’t resonate well with the wider Bitcoin and crypto community, who snapped back at the Wikipedia co-founder about its dependence on donations to run day-to-day operations.

In his X post, Wales sarcastically claimed that he forgot the password to his bank account and lost all his cash, only to then mock the BTC community by adding, “No, actually, that didn’t happen because banks work and Bitcoin doesn’t.”

Ocean mining pool refutes claims of censoring certain Bitcoin transactions

Dashjr rejected blame for accusations aimed against Ocean and asked Samourai Wallet to fix the bug “on your end.”

Bitcoin (BTC) wallet provider Samourai Wallet has accused BTC mining pool Ocean of censoring Whirlpool CoinJoin transactions and BIP47 notification transactions from Dec. 6. However, Ocean’s top executive has denied the claims while asking the Bitcoin wallet provider to fix a bug in their software.

On Dec. 7, Samourai Wallet claimed that a new policy enacted by Ocean mining pool censors certain Bitcoin transactions. In addition, the wallet provider accused X (formerly Twitter) and Block co-founder Jack Dorsey, who is an investor at Ocean, of a “hostile action.”

Samourai Wallet continues to accuse Dashjr of lying and deceiving community members by shifting the blame away from itself as it asks the community, “Don’t let them get away with this.”

Trust the best strategy in crypto bear market — Trust Wallet CEO

Cointelegraph sat down with Trust Wallet CEO Eowyn Chen to talk about how Web3 can become a better experience for everyone.

Bringing the global crypto and blockchain communities together in Istanbul, Turkey, the Binance Blockchain Week 2023 was a clear indicator that the Web3 ecosystem continues to grow regardless of price movements.

Despite being a Binance event, the conference housed several key players from the crypto industry.

Among them was Trust Wallet, a decentralized Web3 wallet provider acquired by Binance back in 2018. Since its acquisition, Trust Wallet has been widely seen as “the wallet arm of Binance.” This is why the Binance Blockchain Week visitors were caught off-guard when the crypto exchange announced its own Web3 wallet.

Trust Wallet CEO Eowyn Chen — a former vice president at Binance — clarified that “Binance focuses on the centralized, while Trust Wallet works toward the decentralized ecosystem,” adding that Trust Wallet has a neutrality that can serve and partner with anyone in the crypto industry.

“We think that keeping that independence and distance is the best way to keep the culture and the talents running for its own mission.”

Trust Wallet was born in 2017 during the initial coin offering craze due to the need for an accessible mobile wallet, Chen said.

Cointelegraph sat down with Trust Wallet CEO Eowyn Chen during Binance Blockchain Week Istanbul. Source: Cointelegraph

“Recently, we became a sister company of Binance rather than operating under Binance because we can have a better playing field,” Chen explained.

“Scammers provide better customer support”

Compared to fixing the user experience, solving the security issues across Web3 is trickier, according to Chen.

Binance self-custody wallet launches crypto-to-fiat off-ramp

Trust Wallet has partnered with MoonPay and Ramp to allow customers to convert their crypto to fiat without using any centralized exchange.

Trust Wallet, the noncustodial and multichain crypto wallet, has partnered with Ramp and MoonPay to introduce seamless crypto-to-fiat withdrawals for its users. The partnership will allow wallet users to convert crypto to fiat directly within the wallet app.

The feature eliminates the need for transferring funds to a centralized wallet to liquidate or convert to fiat. With the help of this new functionality, users may now enter and exit the cryptocurrency market totally through their self-custody wallet and take complete control of their cryptocurrency funds.

The crypto-to-fiat conversion feature comes when centralized exchanges and even peer-to-peer platforms are shutting down. The latest to shut up shop is Paxful, a popular P2P global exchange that announced its closure on April 4, citing regulatory challenges and staff shortages.

Trust Wallet’s head of product, Eric Chang, said that the off-ramp feature would prove to be a boon for customers, especially at a time when the market is turbulent, and crypto platforms are under heavy scrutiny over managing customers’ funds.

Trust Wallet is the official cryptocurrency wallet of Binance. It offers access to 65 different blockchains and boasts a customer base of 60 million users. The wallet also gives users access to decentralized applications (DApps), enabling them to communicate with DApps on any supported blockchain. Some of its key features include buying, staking, trading and storing various cryptocurrencies.

However, Trust Wallet is not a cold wallet or hardware wallet, where it remains offline until given access by the users. Trust Wallet works as a hot wallet as long as there’s an internet connection. The wallet can be accessed via a secure connection online. While this feature was intended to help users, it proved to be a disaster for the co-founder of the Web3 metaverse game engine “Webaverse,” who lost $4 million from his Trust Wallet.

Improving Bitcoin NFT marketplace infrastructure sets the stage for ecosystem growth

Bitcoin NFT inscription activity continues to rise and the launch of new BTC specific marketplaces could lay the groundwork for the next hype cycle.

Bitcoin NFT inscription activity has remained strong with consistency in the daily number of NFTs inscribed on Bitcoin. At the same time, the infrastructure to foster Bitcoin trading is finally coming together with the development of wallets and marketplaces supporting Ordinals.

NFT marketplaces, Gamma and Magic Eden, added support for Bitcoin NFTs this week. While the initial response of traders has been subdued, the activity is expected to pick up soon.

Improving the infrastructure around Bitcoin NFTs

Bitcoin NFTs, also-known-as Ordinals, began with much fanfare in late January as they enhanced the utility and revenue of the Bitcoin blockchain.

Dune dashboard from data analyst dgtl_assets shows that the Ordinals inscription activity remains robust, with nearly 580,000 NFTs inscribed in less than three months.

*Cumulative sum and number of daily BTC NFTs inscribed. Source: Dune*

While the daily inscription activity is vigorous, the trading volume of Bitcoin NFTs is still muted, which can be primarily attributed to the absence of Bitcoin wallets and supporting marketplaces.

Ordinals require a specially designed Bitcoin wallet that recognizes content files on discernable satoshis, the smallest unit of Bitcoin, and facilitates its transfer. Hiro and Xverse are the leading wallet providers in the space.

Mark Hendrickson, the product lead at Hiro, told Cointelegraph that the “active users for the wallet are up significantly in general this year, around 350%.” The activity picked up significantly since February, thanks to the Ordinals hype.

On the other hand, Xverse added Bitcoin NFT support on February 15.

So far, the Xverse Chrome browser extension has been downloaded on over 10,000 browsers, with Hiro’s download numbers surpassing 90,000. The Hiro wallet enjoys an advantage here as it was initially designed for the Stacks blockchain, a Bitcoin sidechain that supports smart contract ability.

Marketplaces come together

Since March 19, there has been considerable improvement in the space, with two leading marketplaces, Gamma and Magic Eden, beginning to support Ordinals trading on March 20 and March 22. So far, the marketplaces have met with a soft opening with less than $1 million in trading volume on both venues.

In comparison, OpenSea has facilitated more than $10 million in daily trading volume on Ethereum NFT trades alone on most days in the first quarter of 2023.

Gamma users have completed around 182 Bitcoin NFT purchases since launch. Whereas Magic Eden has done close to 18.94 BTC (worth around $530,000) volume since launch, with the Bitcoin DeGods collection dominating volumes by 67%.

Additionally, Hendrickson noted that Magic Eden enjoys an advantage in “the cross-protocol department given that they’ve previously rolled out support for Solana, Ethereum and Polygon. This could help serve cross-chain trading needs faster, especially as demand increases for moving liquidity across chains to access their various NFT markets.”

*Bitcoin Ordinals top collections on Magic Eden. Source: Magic Eden*

At the same time, he noted that “Gamma has an advantage among Ordinals marketplaces given their deep focus on Bitcoin-based technologies.” Data provided by Hendrickson shows that the number of Hiro users interacting with Gamma surged significantly to around 2,144 weekly users as the hype around Bitcoin NFTs kicked off.

*Number of Hiro clients that connected their wallets to Gamma. Source: Hiro*

The Bitcoin NFT trading activity is expected to pick up. Ordinals provide superior security guarantees than NFT ecosystems elsewhere. The digital media file of Ordinals is stored directly on the Bitcoin blockchain and enjoys the same security guarantees as regular BTC transfers. Whereas other ecosystems like Ethereum store the content file of the NFT on third-party storage solutions like AWS and IFPS. Hendrickson noted, “Their long-term durability is a huge advantage.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Silk Road Bitcoin for sale? US government-linked addresses transfer $1B in BTC

US law enforcement agencies have confiscated thousands of BTC from the Silk Road over the years, and a significant chunk of it has been auctioned from time to time.

Over 50,000 Bitcoin (BTC), worth $1 billion, were moved from multiple wallets connected to United States Government law enforcement seizures and transferred to new addresses, with some moved to Coinbase on March 8.

According to data shared by on-chain analytics firm PeckShield, three transfers were made from U.S. law enforcement agency’s wallets. These wallets held nearly 51,000 BTC seized by U.S. agencies from the Silk Road marketplace in November 2021. The confiscated BTC was consolidated into two wallet addresses.

*Silk Road Bitcoin moved to three different addresses. Source: Twitter*

Out of these three transfers, the majority appear to be internal transfers. However, approximately 9,861 BTC was sent to Coinbase. The other two include a 30,000 BTC transfer and a 9,000 BTC transfer.

*Silk Road BTC sent to Coinbase. Source: Glassnode*

The Silk Road was an online black market and the first modern darknet market. It was launched in 2011 by its American founder Ross Ulbricht under the pseudonym “Dread Pirate Roberts.“ The marketplace was one of the first to accept Bitcoin payments, helping to popularize crypto use. U.S. law enforcement agencies confiscated multiple items from its founder, including hoards of BTC, which have been auctioned from time to time.

Popular Bitcoin proponent Tim Draper bought nearly 30,000 BTC in 2014 in one of these auctions. Another auction for 50,000 BTC was held in October 2015, where the U.S. Marshals Service auctioned 21 blocks of 2,000 BTC and one block of 2,341 in an online auction.

While only a small portion of the 50,000 BTC was sent to Coinbase, the movement of billions worth of BTC from U.S enforcement agency-linked wallets evoked wild reactions and even wilder theories from Twitter users. One pointed out that if U.S. agencies decided to sell their Silk Road Bitcoin, it would put significant selling pressure on the market. At the same time, a few others questioned the timing of the sale.

US Treasury lists BTC, ETH addresses tied to Russian sanctions evasion group

The government department said it would impose “full blocking sanctions” on Jonatan Zimenkov and his crypto addresses due to his connections with a sanctions evasion network.

The Office of Foreign Assets Control of the United States Department of the Treasury has added two cryptocurrency wallets allegedly connected to a Russian sanctions evasion network as part of its list of Specially Designated Nationals.

In a Feb. 1 announcement, OFAC said it had added one Bitcoin (BTC) address and one Ether (ETH) address to its list of sanctioned entities as part of a move to “methodically and intensively target sanctions evasion efforts around the globe.” Treasury said it would impose “full blocking sanctions” on 22 individuals, including Jonatan Zimenkov, a Russian national with access to at least one BTC wallet and one ETH wallet.

According to the U.S. Treasury, Jonatan is the son of arms dealer Igor Vladimirovich Zimenkov, who runs the sanctions evasion network. The group was allegedly behind supplying technology to a Russian company following the country’s invasion of Ukraine in February 2022, as well as supporting certain “sanctioned, state-owned Russian defense entities,” including Rosoboronexport and Rostec.

“Igor Zimenkov was designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy,” said OFAC. “Jonatan Zimenkov was also designated pursuant to E.O. 14024 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Igor Zimenkov.”

Treasury is taking more action as part of the U.S. strategy to methodically & intensively target Russia’s sanctions evasion efforts around the globe, and to make it harder & costlier for Russia’s military-industrial complex to re-supply Putin’s war machine.https://t.co/q7a6DIxhZg

— Deputy Secretary Wally Adeyemo (@TreasuryDepSec) February 1, 2023

The BTC address provided by Treasury showed no balance at the time of publication. The ETH address likewise contained no tokens but showed four transactions totaling roughly 5,463 ETH in early 2022 — more than $16 million at the time.

The U.S. Treasury seems to have stepped up efforts to include crypto wallets in its sanctions efforts. The government department effectively barred U.S. residents from using the controversial Tornado Cash mixer, an action that later prompted lawsuits from crypto advocacy groups and investors.

Multiparty computation could offer increased protection for crypto wallets

Multiparty computation can help users to protect their private keys and seed phrases when used in wallets.

Multiparty computation (MPC) is a type of cryptographic protocol that allows multiple parties to jointly compute a function over their inputs without revealing those inputs to each other.

MPC can be useful when parties want to compute some function together but want to keep their inputs private from others. For example, a group of banks may want to determine the total amount of money in their joint account without revealing their account balances to each other.

In MPC, each party has a secret input that they keep to themselves. The process is done by carefully encrypting the inputs and performing the computation on the encrypted values so that the final result is the desired function, all while keeping the values secure.

MPC protocols typically involve multiple rounds of communication between parties exchanging encrypted messages and performing various computations on their own inputs.

MPC is a complex and technical topic, and there are many variations and approaches to implementing MPC protocols. Some key challenges in designing MPC protocols include ensuring that the protocol is secure against various attacks, such as malicious parties trying to learn other parties’ inputs, and ensuring that the protocol is efficient with regard to computational resources and communication costs.

What is a multiparty computation crypto wallet?

A multiparty computation crypto wallet is a crypto wallet that uses MPC technology to manage and store users’ assets securely. In an MPC crypto wallet, the private keys used to access and manage the users’ cryptocurrency are split into multiple parts, known as “shares,” which are distributed among the parties involved in the MPC protocol.

The key advantage of using MPC in a crypto wallet is that it allows the users to securely manage their cryptocurrency without any single party having access to the entire private key. This can help protect against various attacks, such as hackers attempting to steal users’ cryptocurrency by compromising a single party’s private key share.

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MPC crypto wallets typically use a combination of cryptography and secure communication protocols to enable different parties to jointly manage users’ cryptocurrency. The process can involve complex calculations and communication between the parties, but the result is a secure and efficient way to manage users’ cryptocurrency assets.

Crypto wallets like ZenGo use multiparty computation to improve wallet security, and Coinbase has the feature enabled for their noncustodial wallet. As a result, MPC crypto wallets can provide increased security and protection against certain attacks. Still, they also require more computational resources than other crypto wallets.

Benefits and drawbacks of multiparty computation crypto wallets

The main advantage of an MPC crypto wallet is that it can provide increased security for users’ cryptocurrency assets by splitting the private keys used to access and manage the cryptocurrency into multiple parts and distributing those parts among different parties.

Tal Be’ery, co-founder and chief technology officer at crypto wallet ZenGo, told Cointelegraph, “MPC solves cryptocurrency’s most pressing problem: The single point of failure (SPOF) of the private key. This SPOF is the main reason users lose their funds: Whether by misplacing their private key, having their private key stolen, or accidentally sharing their seed phrase through a phishing scam.” He continued:

“With MPC, the indivisible private key is replaced by multiple distributed secrets often called ‘shares,’ such that a quorum of these shares can distributively sign a message — without creating a private key.”

Be’ery mentioned how separating the pieces of the private key and storing them in different locations makes it more difficult for malicious actors to compromise a user’s wallet.

“If each of these shares is held in an orthogonal place (e.g., mobile device and a server), then it makes it orders of magnitude more complicated for hackers to steal, as the attacker would need to steal from multiple independent places in different ways,” Be’ery said.

“This type of architecture also solves the dilemma discussed above: Creating copies of shares as a backup against loss is much easier, as no one share represents the ‘the and only’ private key,” he added.

Parth Choudhary, founder and CEO of Glip — a Web3 gaming and wallet application — also told Cointelegraph, “MPC could make it so that a wallet provider can’t get to a user’s money or control it. It may also make it harder for hackers and other bad people to steal private keys.”

MPC cryptocurrency wallets have some advantages over traditional wallets. MPC wallets are more reliable since they can ensure that a user’s assets are still accessible, even if one or more parties become unavailable or unresponsive. Privacy is also improved because the private keys are split into multiple shares and distributed among different parties.

By preventing any single party from discovering the user’s complete private key, the user has a reduced chance of losing their funds. Security is also improved since the computations are carried out on encrypted outputs, preventing malicious parties from learning sensitive information.

However, there are also some potential disadvantages to using an MPC crypto wallet. One of these disadvantages is the complexity associated with MPC protocols, especially for non-experts in cryptography. So, an MPC wallet can be more challenging to set up for the average person.

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Additionally, due to the computational resources needed by MPC protocols, they may be slower to operate. In this regard, an MPC wallet may be less efficient than other crypto wallets. Finally, not all cryptocurrency assets can be managed using an MPC crypto wallet, and some assets may be difficult or impractical to manage using MPC.

Wallet security has always been important for anybody who uses cryptocurrency, and the need for self-custody has become all the more apparent with the collapse of several high profile cryptocurrency firms and the loss of millions in user funds.

The decision to use an MPC crypto wallet will depend on the specific needs and requirements of the user. For example, it may be useful for users who prioritize security and privacy, but some people may prefer a more simple solution.

How do crypto hardware wallet firms make money?

All the companies that are involved in producing hardware crypto wallets have multiple revenue streams, either directly or indirectly.

The hardware wallet industry has emerged as one of the most resilient sectors to the ongoing cryptocurrency winter, with issues like the FTX crash bringing in even more cold wallet sales.

The bear market of 2022 has once again reminded crypto investors of the importance of self-custody and independence from centralized exchanges (CEX).

As a result, some major CEXs like Binance has increased their investment exposure to hard wallet firms, while CEO Changpeng Zhao even suggested that CEXs may no longer be necessary in the future. Should it be the case, the crypto industry of the future will be quite unlike the existing one because the business model of hardware wallets is very different from that of CEXs.

One massive difference is how hardware wallets make money because — unlike CEXs — cold wallets don’t charge any fees for most transactions by design. But selling devices cannot be the sole revenue stream for cold wallet manufacturers due to a number of reasons, including that hardware wallets are durable devices that don’t often need upgrades.

So, how do hardware wallet manufacturers actually make money? Cointelegraph reached out to several cold wallet providers to discuss the issue to better understand their business model.

How long does a hardware wallet last?

There is no clear answer on how long a hardware cryptocurrency wallet is able to last, partly because the world’s first-ever cold wallets are still working properly.

Czech Republic-based hardware wallet firm Trezor was the first company in the world to officially release a cold wallet back in 2014. After eight years, the Trezor One model is still one of the most popular hard wallet devices, with many customers still using their first generation of Trezor devices, Trezor brand ambassador Josef Tetek told Cointelegraph.

“Trezor devices come with a two-year warranty. However, that doesn’t mean the devices break down after two years,” Tetek said, adding:

“At conferences we regularly meet users who still use the first edition from 2013. In general Trezor devices are very durable and the fault rate is minimal.”

The exec emphasized that users can break, lose or damage their devices, but they will keep their Bitcoin (BTC) if they keep their recovery seed backup intact.

According to Ledger, another major cold wallet provider, the lifespan of a cold wallet is “really long,” but is not something that the firm can estimate. “Devices are designed to last. Sometimes issues come up as with every product, but people should be able to bury them,” a spokesperson for the firm told Cointelegraph.

According to some hardware wallet providers, card-based cold wallets can last for dozens of years or never expire at all.

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Andrey Kurennykh, CEO at the SBI-backed cold wallet firm Tangem, suggested that their card-like hardware wallet has the same lifespan as the underlying Samsung S3D350A secure element. “Samsung claims that they have a lifespan of more than 25 years. Since there are no other hardware components in Tangem wallets, we consider this to be the lifespan of the whole device,” Kurennykh said in an interview with Cointelegraph.

Adam Lowe, creator of another cold wallet company Arculus, also told Cointelegraph that the company’s card-like cold storage device “never expires.”

As hardware wallets might never require a user to upgrade the device, how do cold wallet firms keep running operations, given that such companies have to spend significant resources to provide long-time support for their customers?

Increasing demand for hardware wallets

Many hardware wallet providers have been forced to expand their support staff in order to meet increasing demand for cold wallet devices.

“We have significantly scaled up our support team, which has been important to us considering recent events in the crypto industry and the increase in people moving to self-custody,” the Ledger spokesperson said.

“We’re seeing a large influx of people new to crypto from different channels and geographies, and we’re strengthening support proportionally,” Tangem’s Kurennykh noted.

A number of wallets have also introduced new support solutions including self-help tools and chat bots, allowing them to more easily handle frequently recurring requests like implementing an e-commerce API. “This helps to handle unexpected surges in inquiries such as that experienced in the recent FTX collapse,” Trezor’s Tetek said, adding that the firm has also been actively adding videos on solving the most common issues and difficulties.

Cold wallets’ multiple revenue streams

All the companies that are involved in manufacturing hardware crypto wallets have multiple revenue streams, either directly or indirectly, according to comments from industry executives.

“Ledger isn’t just a hardware company, we’re a software company as well with Ledger Live,” a representative said, adding that its revenue comes from not only selling Ledger devices but also through services on Ledger Live.

The firm also offers its own nonfungible token platform known as Ledger Market, business-to-business (B2B) products tool called Ledger Enterprise and others, the spokesperson noted.

Ledger has also been actively expanding its devices, launching a total of seven different cold wallets since 2014. Ledger’s latest wallet, developed in collaboration with iPod Classic creator Tony Fadell, is priced at $279, which is $200 higher than the cost of the previous Ledger wallet.

Rival firm Trezor doesn’t offer any financial services and doesn’t levy any fees on using its Trezor Suite app, Tetek said. At the same time, its sister firm, Invity, enables Trezor users to buy and sell Bitcoin (BTC) and other crypto currencies directly from the Trezor Suite, he said, stressing that the firm is a separate business from Trezor.

According to Tangem’s Kurennykh, the firm has several revenue streams, with as much as 70% of the company’s revenue coming from hardware wallet sales. About 20% of revenues come from third-party services fees like on-ramp and off-ramp exchanges, while 10% is generated through white-label wallet sales, Kurennykh said. The company is also working on its own non-custodial payment solution, which is expected to make another additional revenue stream.

Ruben Merre, co-founder and CEO at Binance-backed crypto wallet Ngrave, also told Cointelegraph that the firm’s revenue is mostly generated from product sales. However, there are areas for additional revenue streams, including a transaction fee for a fiat-crypto onramp. “The user can then buy crypto directly from the hardware wallet app […] The hardware wallet manufacturer may charge a transaction fee for this process,” Merre said.

Additionally, a number of cold wallets also participate in affiliate or promotion programs in cooperation with crypto services and exchanges.

There’s no public hard wallet company yet

As none of the existing hardware wallet companies are public, there is no readily available data on the revenues coming from their business. All the hardware wallet firms interviewed by Cointelegraph declined to provide any figures related to their financial information, citing their status as a private company.

At the same time, the executives reiterated that the collapse of the FTX exchange in November has driven massive sales and traffic to hardware wallet platforms.

In November, Ledger doubled its transaction revenue through Ledger Live month-over-month, also recording an all-time-high in number of trades through Ledger Live, the spokesperson said. “We had our best sales month ever in November, with our two best sales days ever on Nov. 13 and Nov. 14, following FTX,” the representative added.

“We can say that we have sold over 1 million devices, and we are experiencing record sales after the recent FTX collapse,” Trezor’s Tetek also noted.

As previously reported by Cointelegraph, the hardware wallet industry had been estimated to grow at a faster pace than exchanges, even before the FTX crash. But despite self-custody being one of the genuine purposes of crypto, investors should still be aware of the risks associated with storing coins by themselves.

TON Telegram integration highlights synergy of blockchain community

Independent developers from The Open Network community developed a Telegram bot for trading and transferring cryptocurrency.

As a result of a recent upgrade to the wallet bot, users of the Telegram app are now able to purchase and sell cryptocurrencies without leaving the application. The wallet bot was developed by The Open Network (TON, formerly Telegram Open Network) in April. The bot initially enabled users to buy, sell and trade Toncoin (TON) within the Telegram app, but a new update has added a fully functioning cryptocurrency wallet to the application.

An independent team of TON developers created the wallet bot to simplify crypto transactions for Telegram users. A representative from the TON Foundation told Cointelegraph, “The creation of the wallet bot is handled by an independent development team, and we are certainly happy that more and more projects are choosing TON as the basis for creating new products,” continuing to say:

“TON is intended for millions of users, and one of our goals is to make the use of blockchain no more complicated than using applications that users are used to.”

The wallet bot also serves as a fiat on-ramp, allowing users to buy TON using their credit cards within the Telegram app. The currently supported fiat currencies for buying and selling Toncoin are United States dollars, euros, Ukrainian hryvnia, Belarusian rubles and Kazakhstani tenge.

Regarding transactions within Telegram, the exchange service that facilitates them also functions as a guarantee and resolves any required conflicts that may arise between the two parties involved in the transaction. The other party may carry out the transactions in complete anonymity; nevertheless, users must provide the bot with their cell phone numbers before participating in any cryptocurrency-related activities made accessible by the application.

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The wallet bot doesn’t charge any fees for buying crypto through Telegram, but sellers will be charged a commission fee equivalent to 0.9% of the selling price for each complete transaction. Currently, the app can only be used to purchase Toncoin (TON) and Bitcoin (BTC). However, the TON Foundation plans to expand the number of cryptocurrencies available for purchase. In addition, in order to transfer crypto through the peer-to-peer functionality on Telegram, users need to register with The Open Network.

When transferring crypto to another person, users send the coins to the recipient’s Telegram handle instead of their address. The TON Foundation representative highlighted this feature, saying, “The @wallet bot team is making great strides in this direction, as you can now buy, exchange, and send Toncoin to your contacts without leaving Telegram. There is no need for long addresses or special applications. We think that the future lies in projects like this.”

History of Telegram and The Open Network

Telegram Messenger grew massively in popularity within the crypto community due to its encrypted messaging and ability to create group chats. The bot functionality also makes automating tasks within the groups and chats easier. For example, bots can ban users, respond to questions and link users to useful resources for a project.

In 2017, Telegram began monetization plans for the application since it did not use ads. As part of this plan, Telegram Open Network, or The Open Network, was founded by Telegram founders Pavel and Nikolai Durov, and the white paper was released in January 2018. The Open Network was developed as a platform for decentralized apps and an alternative payment processing network to major networks like Visa.

To raise funds for the development of TON, Telegram held a private sale for the GRAM, which investors could exchange for the TON token when launched. However, the United States Securities and Exchange Commission would later class the token sale as an unregistered securities offering. As a result, Telegram decided to end its active involvement with TON in 2020.

On June 11, 2020, Telegram and the SEC reached a deal in which Telegram agreed to reimburse $1.22 billion as a termination fee in GRAM purchase agreements and pay an $18.5 million penalty to the SEC. Telegram also agreed to provide the SEC prior notice if the company planned to sell any digital assets during the next three years.

On May 7, 2020, Free TON was launched as an independent venture to continue the development of the Telegram Open Network, using the freely available source code. The community later grew to over 30,000 members by January 2021, and the Telegram team later transferred the ton.org domain and GitHub repository to the TON Foundation by August 4, 2021.

The TON foundation has assumed responsibility for the Telegram token’s underlying cryptocurrency (TON). Before this, users of the apps collaborated on a fundraising effort for the cause. As a result, they contributed more than $1 billion to the growth of the TON ecosystem, which was made possible by their donations.

What the future holds for TON and Telegram

It is possible that the TON Foundation’s new Telegram bot update may pave the way for a global cryptocurrency payments service. Furthermore, since the app has over 500 million active users globally, it can act as a catalyst for further crypto adoption if the wallet bot proves to be popular.

When asked about the future of Telegram and The Open Network, a TON Foundation representative told Cointelegraph, “Telegram is a user-friendly platform for everyone in the Web3 world — both for communication and developing products using their disruptive technologies. Furthermore, the open platform allows developers to create working products with real-world use cases that can be deployed in the app.”

“The wallet bot, based on TON, is a great example of this. There are also many services on Telegram that already use TON, such as donate, mobile and others,” they stated, adding, “A significant development is the launch of the Telegram username auction, which is a great demonstration of how the simplicity of tokenization on TON can open up many real-world examples of the use of blockchain technology.”

As well as the wallet bot, The Open Network has developed additional Telegram bots that serve different purposes. The donate bot allows creators to post messages that accept donations via special action buttons that will facilitate a payment process within the Telegram application. The process works by a user contacting the donate bot and following the instructions.

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The user will also have to add the bot as an administrator on the channel and submit payout information so they can receive the donations. The mobile bot allows users to access the internet when Wi-Fi is unavailable. The Telegram username auction allows users to purchase and auction off their Telegram handles for TON tokens.

The recent update to Telegram’s wallet bot can open up a wider range of the public to using cryptocurrency. It can also further solidify Telegram’s reputation as one of the go-to apps for blockchain-based projects seeking to build a community, especially if additional tokens are added to the platform. Telegram already has a lot of the crypto community using the application, and the ability to buy and transfer crypto could bring non-crypto users into the market.