Sat. Apr 17th, 2021
1st place in the Free TON essay competition

The essay by @itakura1 took 1st place in the Free TON Positioning Essay contest.

The exponential progression of networked technologies has only two logical endgames:

  1. A dystopian endgame where centrally-controlled financial and communication networks empower an oligopoly of elites while enslaving the rest of humanity in an Orwellian nightmare.
  2. A utopian endgame where decentralized financial and communication networks give rise to a “golden-age” of freedom, collaboration, and equal empowerment for all.

Unfortunately, we seem to be heading towards the former, dystopian endgame. The 2008–2009 global financial crisis exposed the privately-owned central banking system as nothing more than a government-sanctioned, global Ponzi scheme. In 2013, Edward Snowden exposed the “big-tech” internet monopolies’ collaboration with rogue intelligence agencies to intercept, store, analyze, and exploit all online activities and communications. China, unencumbered by western ideals, is already beta-testing an Orwellian technocracy. The worldwide progression toward a centrally-controlled, network-enabled dystopia is clear to any informed and objective observer.

Most people are generally good, and abhor such abuses and inequalities. This is why most democratic countries have enacted laws to prevent such centralization and abuse of power. Clearly such laws have been ineffective. This is due to simple fact — there will always be a minority of amoral or immoral people who will find a way to exploit any and all weaknesses within a centralized system. The good news is that this simple fact leads us to a simple solution: robust, decentralized systems.

Decentralization is not a new concept — democracies, republics, and parliamentary systems were designed to limit the centralization of power and control. However, these systems all rely on human integrity which is invariably corrupted. Only a system founded on something immutable, such as mathematics, can adequately resist human corruption. Mathematics, in the form of modern encryption, powered by ubiquitous computational power and communication networks has finally made the development of robust, decentralized financial and communication systems possible.

On October 31, 2008, Satoshi Nakamoto started the decentralized blockchain revolution when he published his whitepaper: Bitcoin: A Per-to-Peer Electronic Cash System. The Bitcoin network was subsequently launched with the following message encoded in the genesis block: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. It’s clear that Nakamoto, whoever he was, understood the threat posed by the central banking system and the need for a robust, decentralized alternative.

Vitalik Buterin, Gavin Wood and the Ethereum team developed an alternative blockchain platform that greatly extended Bitcoin’s scripting functionality. This enabled the the development of decentralized applications, or dapps, that run on the blockchain’s distributed Virtual Machine (VM). This created endless new possibilities including smart contracts, custom currencies (ERC-20 tokens), non-fungible assets (NFTs), decentralized exchange (DEX), and decentralized autonomous organizations (DAOs).

Over the last decade, the Bitcoin and Ethereum networks have grown exponentially, with current market capitalizations over $200 Billion and $40 Billion, respectively. During this time, hundreds of “alt-coins” were developed, most of which were slight variations of Bitcoin and Ethereum, but a few incorporated important advancements. The most important of these advancements were Proof of Stake and Byzantine Fault Tolerant (BFT) consensus, which addressed the fundamental limitations of Bitcoin and Ethereum — speed of finality (transaction speed) and scalability (transaction throughput).

Anyone in the trenches of the blockchain revolution has encountered the limitations of Bitcoin and Ethereum. A Bitcoin transaction can take over an hour before it is accepted by an online merchant. On the Ethereum blockchain, the rapid growth of Decentralized Finance (DeFi) has led to painfully slow transaction times and financially prohibitive transaction fees. The bottom line is that Bitcoin and Ethereum were successful proofs of concept, but they have fundamental limitations that make them inadequate for widespread global adoption.

These limitations led to the “blockchain trilemma” concept, which postulates that scalability, security, and decentralization cannot be maximized simultaneously — maximizing one aspect requires a compromise in at least one of the others. There is currently a wave of new blockchain projects that claim to have solved this trilemma, but upon critical evaluation, fundamental limitations or issues are apparent. Several of these projects have launched test networks (including Ethereum 2.0) and some have even launched “mainnets,” but the reality is that these projects have only solved the trilemma on paper, none have demonstrated a mature solution in practice.

Long before the trilemma was commonly recognized in the blockchain industry, a true genius in the fields of mathematics and computer science, Nikolai Durov, was quietly developing a solution behind the scenes (Nikolai, and his brother Pavel, were already well-known for creating the popular Russian social networking site VKontakte and the encrypted messaging platform Telegram). In early 2018, Nikolai published a 23-page whitepaper and a 132-page technical paper detailing the design of the Telegram Open Network (TON), an Ethereum-like blockchain with greatly expanded capabilities.

Nikolai’s TON represented a major departure from all previous blockchain projects. Instead of offering incremental improvements on existing technologies, Nikolai fundamentally re-imagined blockchain technology as a whole. His whitepaper unveiled radical innovations such as infinite dynamic sharding, instant hypercube routing, and self-healing 2-dimensional ledgers. These innovations, when combined with proof of stake and BFT consensus, solved the trilemma and made TON the first viable solution for an inherently script-able, scalable, secure and decentralized blockchain. TON promised to bring the benefits of blockchain to the masses — making the exchange of value as fast and secure as exchanging Telegram messages, for hundreds of millions of concurrent users.

After the publication of these revolutionary documents, Telegram quickly raised over $1.7 Billion in private investments for the development of TON. Nikolai and his independent development partner, TON Labs, spent over two years and $500 Million translating Nikolai’s vision into code. However, as the TON blockchain approached its launch date, a legal battle with the U.S. Securities and Exchange commission reached a climax when a U.S. judge declared that Telegram would not be permitted to launch the TON blockchain, anywhere in the word, with or without U.S. investors. Despite the absurdity and legal overreach of this ruling, it was clear that America’s global hegemony presented an insurmountable obstacle for the Durov brothers.

On April 30, 2020 Telegram announced it would abandon the launch of TON and return the remaining $1.2 Billion to investors. The United States, a self-proclaimed champion of freedom, had marched the world another step closer to the centralized, dystopian endgame. However, on May 7th, a consortium of independent blockchain companies, including TON Labs, announced the launch of the Free TON network — a community-developed and governed blockchain project built upon the codebase developed by Nikolai Durov and TON Labs. The Free TON community declared its unequivocal commitment to the principles of the free software movement (hence the Free in Free TON) and decentralization and formalized this commitment in a Declaration of Decentralization.

With the departure of Telegram, TON became The Open Network. Free TON is truly an open network, in every sense — anyone who shares the community’s commitment to free software and decentralization can join the community and contribute to the project. Core developers, dapp developers, website developers, graphic designers, PR and marketing specialists, even meme makers — literally anyone who has an idea to share, or skills to contribute, can propose and participate in “contests” for contributing to the project. The contest specifications, judges, and winners are determined by a democratic governance process powered by the Free TON blockchain. Contributors are rewarded with TON crystals, Free TON’s native currency.

Most modern cryptocurrency projects are funded by venture capitalists and a majority of the tokens are allocated to a small group of insiders. On this fact alone, these projects can not be considered decentralized. The unique history of Free TON made it possible to allocate nearly all (93%) of the native currency for rewarding community contributions. This gives the Free TON project a unique superpower — 5 Billion “TONs” of fuel to power the decentralized blockchain revolution that was sparked by Satoshi Nakamoto. While it seemed that we were heading toward the centralized dystopian endgame, the creative genius of Nikolai Durov, a fortunate turn of events, and a committed community of developers and companies have turned the course of history towards the utopian endgame.Come join the Free TON community and help build a utopian, decentralized future — a golden-age of freedom, collaboration, and equal empowerment for all!

With this essay we have completed the publication of the 5 best essays in the Free TON Positioning Essay contest. Soon we will bring you some essays with a technical bias.


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