Telegram's Bitcoin Failure \ stacker news ~bitcoin

12.8k sats \ 38 comments \ @chungkingexpress 30 Apr 2023 bitcoin

There has been some big announcements recently about Telegram supporting Bitcoin in their built-in app wallet.

I decided to test it out and unfortunately found some major issues that make it a failure and Dead on Arrival.

Firstly, they support BTC, but only alongside their own shitcoin token "TON" and USDT. There is no way to disable the display of TON and it always shows up at the top. Telegram is used by hundreds of millions globally and they are using this position to shill a POS shitcoin.

Secondly, I made a small test transaction and was surprised to see they were using legacy format P2PKH addresses. This is not unique, Coinbase and others still use legacy addresses formats (which means higher fees for the user).

The real failure though was that though my transaction got confirmed on-chain, it was still listed as "pending" in Telegram. I left it for 12 hours+ and it still had not been added to my balance. I contacted the support bot and this is what they had to say:

~1100 sats is high risk? According to who? This is about as loose as it gets. If I cannot deposit Bitcoin to my wallet then how can anyone? There was no ticket number, no support link, just a quick "give us your refund address."

Who else even has access to my funds?

I suspect the reason this transaction was rejected was because of chain analysis on the coins. I used a simple swap service to do Lightning -> Bitcoin to deposit these funds. I am reluctant to waste any more Bitcoin testing this service using a "clean" sending address, but regardless it is not a great outcome.

This was just a test and I would never use this service really myself, but for the millions of Telegram users who are not aware of other wallet alternatives etc and just want something built-in this seems like a failure.

What does it mean if more and more chain analysis is deployed to decide what Bitcoin is "ok" and what is not? I don't know the answer, but it is uncomfortable to have doubt about whether a transaction will be accepted or not even if confirmed onchain.

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46 sats \ 0 replies \ @TheBTCManual 30 Apr 2023

Lol thanks for taking the knock and giving it a run through, I guess telegram LN bots are not under threat, funny that people who have created bots in telegram offer a better experience than telegram itself

52 sats \ 2 replies \ @Maximux 30 Apr 2023 freebie

The bad thing is that they do not accept Bitcoin Lightning (LN). It is for Bitcoin On-Chain only. I hope that changes.

10 sats \ 0 replies \ @guts 1 May 2023 freebie

I have sent same comments to Wallet's support about Lighting and they are aware of this.

21 sats \ 0 replies \ @dieselbaby 30 Apr 2023

Yeah, while that sucks I would say that it's not really something I would blame them for. Not sure what it'd require in terms of infrastructure/setting things up on their backend to incorporate lightning deposits/withdrawals for every user. Would be cool to see.

Kind of strange that they are doing such hardcore chainalysis on deposits like this, especially such small amounts.

Wonder what their standards/settings are for determining what makes a transaction flagged as suspicious or being "linked" to "dirty bitcoins"...when you consider just how many millions of BTC flowed through sites like Silk Road back in the day, a huge number of BTC could theoretically be tied to "dirty coins", no?

95 sats \ 8 replies \ @gnilma 30 Apr 2023

Yes, shilling of their shitcoin is a huge red flag for me.

To test out the chain analysis part, I sent 10k sats to my wallet just now, from a whirlpool coinjoined 100k sat UTXO. Let's see where this goes. Will reply here with updates on the transaction.

43 sats \ 1 reply \ @gnilma 1 May 2023

Probably my final update on this one. 13 hours after I sent a refund address to the Telegram wallet support bot, they finally processed the refund and sent the bitcoin (10k sats) to the address I provided. They used part of the refund amount to pay for on chain transaction fees, which I had no problem with (fee was high, 30sat/vB, totaling almost 6.7k sats). What I had a problem with was almost 600 sats were sent back to the original address where I had originally sent 10k sats to the Telegram wallet. That means I only got about 2.7k sats back into my external wallet. Yet, in the confirmation message they sent out in the Telegram wallet, they never mentioned withholding / sending back almost 600 sats into the original telegram wallet deposit address.

Once again, I wrote to their wallet support bot asking about the reason for withholding almost 600 sats. I asked about the discrepancy between their refund confirmation message and the actual refund amount as indicated by the on chain transaction.

Also, I tried clicking deposit in the wallet again and got the following message:

🛑 This operation is forbidden. Please, contact our support team @wallet_supportbot

Seems like they not only flagged my transaction, but also flagged my account and won't let me deposit anymore bitcoin. Of course, I also asked about why I wasn't able to deposit anymore.

I got the following response almost 5hrs ago and have not receive any update since:

Hello,

Let us check information, please wait.

Everything about this wallet just seem off for me. As if no lightning support, using on chain only isn't bad enough, they had to kick it up a notch to do legacy address only with no segwit support.

The act of sending almost 600 sats back to themselves and not telling me about it seems strange. Was that a fee for processing the refund? If so, why did they not mention it up front, but instead, tell me that they refunded a larger amount than the actual amount? Was it a dust amount that they keep for chain analysis? Or was it just a mistake, a human error?

Then disabling my wallet from further deposits is just a d*ck move. Censorship at its finest. If you send anonymous coins into this wallet, expect your whole wallet to get banned.

All in all, I rather Telegram not add bitcoin support to their wallet. By adding bitcoin support the way they did seem like they were trying to give a bad name for bitcoin. Imagine a newcomer trying to use bitcoin for the first time; and Telegram's wallet was their first experience with bitcoin. The new comer would think that what other shitcoiners had been telling them were all true; that bitcoin is slow, cumbersome, and expensive to use. Where, in fact, it is only Telegram's bitcoin wallet that is slow, cumbersome, and expensive to use.

0 sats \ 0 replies \ @ek 2 May 2023

I am thinking ... isn't it possible to tell services beforehand from which UTXO you will fund your wallet so they can do their chainanalysis before you fund your wallet?

192 sats \ 1 reply \ @gnilma 30 Apr 2023

So my transaction got 2 confirmations just now, and I got the following message from the wallet bot

🔎 Deposit transaction for 0.0001 BTC ~2.93 USD is being verified. Wait for the verification results. Please contact @wallet_supportbot for the details.

As of now, my wallet shows the following balance, with the 10k sats showing on hold. I guess it’s going through chain analysis as we speak lol

💰 My Wallet

Bitcoin: 0.0001 BTC ≈ 2.93 USD Hold: 0.0001 BTC ≈ 2.93 USD Available: 0 BTC

Toncoin: 0 TON

USDT: 0 USDT

5 sats \ 0 replies \ @designsats 1 May 2023

police is on the way to your location

1 sat \ 2 replies \ @chungkingexpress OP 30 Apr 2023

Hey thanks for helping out.

19 sats \ 1 reply \ @gnilma 30 Apr 2023

No need to thank me. I'm genuinely interested to see what they do to whirlpooled UTXOs. On the other hand, I should be the one thanking you for writing this article and raising awareness of Telegram's shitty wallet.

Telegram got a lot of attention in the bitcoin echo chambers when they announced the support of bitcoin on their wallet. Even Matt and Marty talked about it on RHR. But it seems everyone just saw the headline, then started to rave and cheer about it without actually looking at the wallet. Whatever happened to don't trust, verify? lol

21 sats \ 0 replies \ @kepford 30 Apr 2023

I didn't hear any raving about it. Reporting what happened is different. IIRC they were mostly talking about telegram getting banned for free speech. But, I also didn't hear any talk about the details of the implementation. Let's not pretend RHR was recommending telegram. Recall them talking about privacy tradeoffs.

0 sats \ 0 replies \ @gnilma 30 Apr 2023

So yea, after 10 hours of funds being “on hold”, I reached out to wallet support. This is what I got from them.

Thank you for waiting.

Your deposit has been put on hold because our systems flagged it as a high risk incoming transaction and cryptocurrency cannot be credited to the bot's wallet.

Please provide the external BTC wallet address to which we can return the funds.

Pretty much the same response as what OP got. So coinjoined sats are high risk and not ok to be sent to Telegram bitcoin wallet, even if it’s only a small amount. Not to mention using legacy addresses and fully custodial. This wallet’s so called bitcoin support is simply horrible.

10 sats \ 0 replies \ @guts 1 May 2023 freebie

TON has always been their official token since the beginning and later added USDT on Tron. There is a Lighting wallet bot on Telegram as @LightningTipBot

61 sats \ 0 replies \ @DarthCoin 30 Apr 2023

Thanks for the review. Agreed. Is a failure. Mee too, when I tried to test and saw the legacy address I just give up. When you see such pathetic implementation you stay away from it.

40 sats \ 0 replies \ @ez 30 Apr 2023

I agree the implementation is piss poor, they just did it to have more liquidity when dumping their shitcoin on retail for BTC is my takeaway

25 sats \ 0 replies \ @Zepasta 30 Apr 2023

Just don't use any service that supports shitcoins. Even hardware wallets.

21 sats \ 0 replies \ @chytrik 30 Apr 2023

Wow, thanks for doing this review. This wallet integration is worse than useless, it is harmful to the interesting properties of bitcoin itself. Terrible.

30 sats \ 0 replies \ @dtonon 30 Apr 2023

I didn't check the TM wallet yet, I guess that the refund possibility means it is custodial. First fail. So, why not offer at least Lightning? A LN wallet seems more logical for pocket money in a chat context. Second fail. And of course this exposes the users to the false assumption that Bitcoin = High fee. Third fail. Bad.

20 sats \ 0 replies \ @brxyz 1 May 2023

Sorely disappointing.

20 sats \ 0 replies \ @kakocuro 30 Apr 2023

I did not even get to testing it. I saw the TON token and already gave up on even trying after that. Shame.

20 sats \ 0 replies \ @softglitter2d 30 Apr 2023

Thanks for this review. I think I'll remain with LightningTipBot for two reasons:

This post: I mean, the implementation failed. The rest, history.
LightningTipBot works very well.

20 sats \ 1 reply \ @dieselbaby 30 Apr 2023

Yeah this seems suspect as fuck, doesn't seem to be a truly decentralized/fully on-chain transaction if you can simply respond to some bot program and have them return the funds...if you're not able to maintain control of the funds if you're sending them to a deposit address of your own wallet, then you're basically at their mercy, no?

0 sats \ 0 replies \ @ek 2 May 2023

truly decentralized/fully on-chain transaction

Not sure what you mean by that.

then you're basically at their mercy, no?

Yes, it's a custodial wallet. But this isn't the problem here. I don't think anyone expected them to create a non-custodial wallet.

0 sats \ 0 replies \ @fedelang 2 May 2023

Thanks for the review. Won't use this pos.

0 sats \ 0 replies \ @kilianbuhn 2 May 2023

They want the sender to be a kyc exchange 😂😂😂

0 sats \ 1 reply \ @beorange 1 May 2023

The biggest issue here is that it looks like a custodial service. The whole problem starts there.

Regarding Telegram's BTC wallet addition, I think it is a major global win for Bitcoin, regardless of the other useless "coins" they are also supporting.

0 sats \ 0 replies \ @ek 2 May 2023

The biggest issue here is that it looks like a custodial service. The whole problem starts there.

SN is also custodial

0 sats \ 0 replies \ @mo 1 May 2023

Thanks a lot for testing and T... what alternative services can you suggest?

0 sats \ 0 replies \ @legxxi 1 May 2023

Wow, thanks for reporting! Such a pity that Telegram engages in shitcoinery.

0 sats \ 0 replies \ @designsats 1 May 2023

Didnt they notice fate of Mobile coin (and its creator) ?????

Shitcoiners get stiches

0 sats \ 3 replies \ @kristapsk 30 Apr 2023

This is not unique, Coinbase and others still use legacy addresses formats (which means higher fees for the user).

Coinbase has bech32 for a long time already. And they batch withdrawals and doesn't charge high tx fees from the user.

0 sats \ 2 replies \ @chungkingexpress OP 1 May 2023

Really? The Coinbase BTC receive addresses I have seen are all in the legacy format: https://help.coinbase.com/en/prime/trading-and-funding/address-formats

0 sats \ 0 replies \ @kristapsk 1 May 2023

Not sure about Coinbase Prime. Cannot also now check about receive with ordinary Coinbase, as my KYC has expired, I can only send. But when looked at their batched transactions, their internal address were bech32.

0 sats \ 0 replies \ @m00ninite 1 May 2023

When they send out, they do batches.

0 sats \ 0 replies \ @KoreaComK 30 Apr 2023

I think most centralized solutions will do a chain analysis to check where the balances are coming from. Not because they want to, but because of any likelihood that these amounts come from an illicit source and they will have to pay legal costs.

0 sats \ 0 replies \ @faithandcredit 30 Apr 2023

Tokens/securities are an interesting funding model perhaps with better incentives than ad models

0 sats \ 0 replies \ @Snooks 30 Apr 2023

That is very worrying and points to an evolution on non fungible sats. We need privacy