If the spirit of the prize was "if you break our crypto you win", this guy should win it. If the spirit of the prize was "we don't want to give away 200k, but we want to pretend we're secure", he shouldn't
jo
You don’t know what the message says, because it’s so short. You will never win the prize.But my system was not so secure. My cipher system was this: Take a message and type it on a US Qwerty keyboard, but shift every letter over one place. So `hi` became `jo`. Not very strong. It would easily be cracked with a message consisting of an actual sentence or two.
Now, with Telegraph, it wasn’t just length of the message involved, but additional information; still, the conditions are so narrow that it doesn’t apply to the real world. Just like I’d never simply send you a message that said "hi", Telegraph would be used in ways beyond one simple back-and-forth exchange, so it artificially limits the information available to a cracker. Make sense?
See also: The BEAST attack or the general class of side channel attacks.
Basically, the framework of the contest precludes many avenues of attack to which a given cryptosystem could be vulnerable. The researcher who discovered the vulnerability in the OP used a man-in-the-middle attack, which cannot be used in the Telegram contest.