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Kik Messenger App Debuts Own Digital Currency Amid Bitcoin Boom

127 points by rayuela 9y ago

pdog 9y ago
Why does Kik need a decentralized cryptocurrency to handle payments for digital goods? They can do it with virtual credits on their own servers a million times more efficiently.
- almostApatriot1 9y ago
  Because they can have an ICO for their coin and basically have other people fund the development + probably make money on the side.
- cocktailpeanuts 9y ago
  It's a change of business model. Instead of ads they're making a bet on cryptocurrency as a way to profit.
  - almostApatriot1 9y ago
    Sort of, but not really. The whole kik points system model is to allow you to earn stuff for watching ads.
    - cocktailpeanuts 9y ago
      Yes, but the difference is, with the currency approach they are trying to raise their value through the coin price. They may employ ads and other "tactics" to make money in the process, but that's fundamentally different from previous approaches where you just give away everything for free and hope to get enough eyeballs to monetize via ads. And ad driven businesses are going through difficult times, and probably not the future of the Internet. They gotta start from somewhere, and the only business model that's familiar enough is the model you mentioned, and that's why they start out this way. It can succeed or it can fail, but if it succeeds they will probably branch out to other ways of making money outside of ads.
- corry 9y ago
  Because doing it as a decentralized cryptocurrency would allow it to one day be more significant than just an internal token systems. There is power in the combination of anonymous identity / messaging + bona fide cryptocurrency.
  - s73ver 9y ago
    But, and this is the important thing, how does that help kik make more money?
    - benjaminmbrown 9y ago
      By owning 90% of a digital ecosystem
- petertodd 9y ago
  There are very rarely technical justifications for creating a new cryptocurrency. For starters, even if you need a token for technical reasons, you can always use a proof-of-burn token creation mechanism, and that proof-of-burn mechanism can enable two-way-trading(1) to ensure the coin doesn't become a separate asset. Another major problem is that we frequently see perfectly good ideas whose technical architectures are wrecked by the need to add an inefficient and unscalable consensus system to support a new cryptocurrency. For example, the original Ripple concept is a really good one, proven by the success of the analog equivalent, Hawala. Ripple could have continued on that basis - found investors for the standard open-source business model - and made a potentially useful system that at minimum would have represented good accounting software for banks (international banking is not unlike a very large scale, regulated, Hawala). Instead they decided to raise money via a token, XRP, and because of that token they needed to add a global consensus blockchain. The result was a system that had all the scalability problems of Bitcoin, and since they didn't use proof-of-work, an ill-defined consensus model that's secured in practice by a handful of private keys, all Ripple-controlled servers(2). If we're going to go down that route, why not just do it properly and have an actual legal contract with the people in charge? And with that legal contract, why do we need XRP? Why not just pay for the service with an existing currency? Frankly, I think most of these ICO's are transparent attempts to raise money while avoiding securities regulations. I'm sufficiently libertarian to have a mostly "buyer beware" attitude to that, but I sure as heck wouldn't want to be closely involved with one - very high risk the SEC will put a lot of people in jail over this, and the ethics of many of these schemes are very dubious. 1) https://petertodd.org/2014/setting-the-record-proof-of-publication#proof-of-publication-needs-scamcoins-like-mastercoin-and-counterparty https://petertodd.org/2014/setting-the-record-proof-of-publi... (read that URL link as 'Myth: Proof-of-publication needs “scamcoins” like Mastercoin and Counterparty' 2) https://github.com/petertodd/ripple-consensus-analysis-paper/blob/master/paper.pdf https://github.com/petertodd/ripple-consensus-analysis-paper... Written by me under contract for R3CEV (they were considering buying Ripple apparently, and I was doing due diligence for them and their members).
- avip 9y ago
  For VCs.
- ftxrcc 9y ago
  It's trendy. I don't see any reason why a chat app like Kik should make a crypto currency, other than "it's trendy and hip".
edmanet 9y ago
Why not just use bitcoin?
- tlrobinson 9y ago
  Because they want to cash in on the cryptocurrency hype.
- AlwaysBCoding 9y ago
  10-minute block times make Bitcoin unusable as a transactional currency in it's current state (don't shoot the messenger).
  - JTon 9y ago
    What currency isn't transactional? I'm not following; are you suggesting bitcoin is not well suited for any purpose?
    - 52-6F-62 9y ago
      From my understanding, and what I can read from what they said: They're suggesting Bitcoin is not practical for what the current average rate of transactions on other payment networks would require of it, should it even take on a lesser portion of those transactions (eg. X-thousand transactions per second). It is useful however for a value store. Eg. You can't rightly trade units of gold 50,000 times per second, but it's a good bet that if you buy some and stow it that it will at least hold or even appreciate in value.
    - uncletammy 9y ago
      Believe it or not, Bitcoin isn't actually transactional these days. A new feature called "replace by fee" was introduced that allows coins that were used in a transaction which is still in queue for processing (hasn't yet been included in block by the miners) to be spent in a different transaction as long as the spender pays a high enough fee to jump to the front of the queue.
      - 9y ago
almostApatriot1 9y ago
The whole 'earn points for this' system seems like a good idea in general, but I wonder how appealing it will be for advertisers to buy coins that wind up having such an unstable price. By the time they make it to the consumer they could be worth half of what you paid for them. I imagine a simpler system would be more practical but the prospect of making tens of millions off of an ICO was just too appealing to pass up.
- benjaminmbrown 9y ago
  This system is designed to make advertisement obsolete
almostApatriot1 9y ago
Am I the only person who finds this kind of depressing and scary? I thought cryptocurrencies were supposed to be about democratization and decentralization. Now if you want to make money on Kik, you apparently are going to get paid in Kin, a currency Kik controls for which there is no standard conversion to USD. How is this different than getting paid in Walmart Dollars.
- snissn 9y ago
  It's good for Kik.. You are free to make your own messenger app so you can create your own cryptocurrency!
- stingraycharles 9y ago
  This concept has always existed, and you can compare it to e.g. steam credits. People found ways in the past to trade "virtual money" for real money, and this will be no different. The fact that it's a cryptocurrency adds a layer of transparency on top of it, and it looks like they're using it as an excuse to add additional value to their coin. In reality, though, market forces will probably figure this out, and if it's not practical to trade for "real" money, it will not be worth much to app developers.
  - nwah1 9y ago
    Let's not forget the enormous in-built demand for fiat currencies via taxation.
    - colefichter 9y ago
      > Let's not forget the enormous in-built demand for fiat currencies via taxation. I understand that the whole libertarian-hipster-goldbug thing is in vogue right now, but what does this even mean?
      - andirk 9y ago
        >> Let's not forget the enormous in-built demand for fiat currencies via taxation. > I understand that the whole libertarian-hipster-goldbug thing is in vogue right now, but what does this even mean? If an in-built currency for fiat taxation is on the cover of Vogue (psst, it's Bloomberg), then what does this even mean?
conradk 9y ago
I'd guess they probably kept a few thousands or million coins for themselves. This way if this takes off, they'll have millions of dollars worth of coin to trade for real money. Or else they'll act as an exchange, which seems to be a good business too, as long as you have enough capital to get it going.
- koolba 9y ago
  s/trade against/trade for/
  - conradk 9y ago
    edited, thanks
- rch 9y ago
  Someone should work through the mechanics of doing this as a form of IPO, without running afoul of applicable regulations.
  - seibelj 9y ago
    The is already happening en masse. Look up "initial coin offerings" (ICO's)[0] [0] http://www.investopedia.com/terms/i/initial-coin-offering-ico.asp http://www.investopedia.com/terms/i/initial-coin-offering-ic...
- JustAnotherPat 9y ago
  there will be 10 trillion coins and they plan to keep 9 trillion of them. So more like a few thousand million, not thousand OR million :)
lwlml 9y ago
There is a reason why you shouldn't adopt the e-mail address or phone number your cable company _could_provide to you: it ties you closer to their network and increases your dependence on it. I doubt that Kik's "core competencies" are anywhere near what it would take to launch and maintain a digital currency. So, don't call it a digital currency and call it for what it really is, a "customer loyalty" program where hard money and attention is traded for scrip that never... ever... leaves the "company store."
SurrealSoul 9y ago
At what point does a premium virtual asset become a "currency" For example, if Clash of Clans has gems that you purchase to purchase items and such inside the application, is that a currency? '...sells tokens that can be used to buy services on its platform. The idea is that as more and more people use Kik, the value of those tokens, called “Kin”, will rise in value.' But how is this different than buying premium currency in a free to play game? The "Kin" can only be used inside Kik, how does the value increase?
- ben_jones 9y ago
  IANAL but I imagine their are legal boundaries that come in place the second they become transferable, the second they cross international borders, etc. Personally I would argue the first time they are used to buy drugs has a cultural significance. I wonder where bitcoin would be without the Silkroad.
- dyarosla 9y ago
  That was exactly my thought process. A cryptocurrency only has value if it's seen as valuable in multiple contexts. There's no indication why value would increase externally of Kik for Kin.
- pjc50 9y ago
  At this stage ICOs which have a sufficient hype factor have an upward ramp in trading after launch, which attracts a lot of unsophisticated libertarian investors ("suckers"). Kik seem to have decided to get in on this action, as it's sufficiently distinct from plain Ponzi to appear legal.
- corry 9y ago
  Respectfully, I think you and others in this thread defining "Kin" too narrowly by thinking of it exclusively a premium virtual token for use inside of Kik. Yes, that's obviously the first use-case. But thinking bigger, the combination of anonymous identity / mobile messaging + bona fide cryptocurrency can lead to something way more significant for Kik's users (who are primarily teenagers & pre-teens - people don't have access to credit and find it difficult to participate in the economy). Assuming some level of mass adoption / easy FX to Bitcoin or traditional currency... Kin could represent a new way in which these users could meaningfully participate economically. Kin will be tied to their anonymous Kik identity; it's managed through Kik which is always-on always-with-them (smartphone); it's the lingua franca for buying stuff inside of Kik with their friends & fav brands. And if they can eventually use Kin outside of Kik (either directly or via simple FX mechanics) - could be a game-changer. So from Kik's POV it's definitely worth the extra headaches and effort to try to do this as a cryptocurrency vs. just internal tokens. Worst case, it doesn't really work and they've over-engineered a token system. Best case, they're a major player in the next-gen of cryptocurrencies.
dharma1 9y ago
Educated guesses when regulators will comment on ICOs, and the impact of that on the crypto market?
EternalData 9y ago
Not sure the cryptocurrency boom and gift certificate utility are super-correlated -- Target has been trying to trap me and my USD with those checkout cards for ages. Usually the incentive is social shame for not just giving straight cash to my friends as gifts -- here, I'm not so sure? I guess it's about as viable as Dogecoin.
deft 9y ago
Kik releases interesting features about every 6 months, then promptly abandons them. They had a cool 'webapp' feature with a JS library for people to write browser apps that ran and integrated inside of kik. They dropped that and launched the bot store. Before this they had Kik Games, which were dropped for the browser. Not sure why they do this. They still haven't monetized bots (I'm guessing this is how they will). Games and webapps could be monetized from the start as embedding ads was easy. I don't know what Kik is doing.
- dyarosla 9y ago
  Maybe they don't either? Looks like a lot of test pivots?
oryband 9y ago
Please see https://kin.kik.com https://kin.kik.com for more info, https://reddit.com/r/KinFoundation https://reddit.com/r/KinFoundation, and http://slack.kinfoundation.com http://slack.kinfoundation.com for discussion.
dalbasal 9y ago
Are any of the cryptocurrencies out there with a "monetary policy" aim of fised exchange rates, IE a digital derivative of USD or EUR? I know this is sort of heretical in that it abandons some of the lofty, revolutionary goals of digital currency but... Currencies like e-pesa or the simpler share-able phone credit pseudo-currencies, give their users stable values. It's hard to imagine a neigborhood shop in Manilla dealing with bitcoin's volatility. I think you need either (1) very fast, cheap & easy ways of converting to hard currency or (2) price stability. I was hoping that bitcoin would develop the first. That way bitcoin could work as a sort of infrastructure, with most people thinking in fiat currencies but the actual transaction taking place in bitcoin. That hasn't really happened. ^Oh, and I generally like the idea of bootstrapping up to full fledged currency from an embedded, toy currency base. Good luck Kik.
- flashdance 9y ago
  Tether is a cryptocurrency that attempts to have a fixed exchange rate with the USD. It does this fairly okay-ish. There were a few moments when its price dropped well below $1 because of insolvency fears but it seems to have rebounded. Below is the whitepaper: https://bravenewcoin.com/assets/Whitepapers/Tether-White-Paper.pdf https://bravenewcoin.com/assets/Whitepapers/Tether-White-Pap...
- elif 9y ago
  ok, so you mint coins proportional to increases in price in order to match your target price.. you distribute those coins equally among all coin holder proportional to their holdings. assuming you can mint coins continuously, you are able to keep the price fixed... Until the elephants (biggest holders) realize that they can buy at $1.01 to ensure they keep getting minting payouts which eclipse the $0.01 premium they are paying to float the market. It's a runaway feedback loop for them until... the the price drops below $1.00. What is the mechanism to deflate the currency? a greek style haircut seizure? welcome to a flash crash as all rational parties move their value to other currencies... so to prevent the former feedback loop, you can impose a sufficient transaction fee. to prevent the latter feedback loop you can implement bank-style currency controls, a technical limit on withdrawal rates.. so you end up with a currency which is subject to the exact same (perpetual inflation) negative performance of its fiat counterpart, but with higher fees and stricter controls in place... So it's got the worst of both worlds
corry 9y ago
Here's the whitepaper that actually discusses what they are doing (much better than this article IMO): https://kin.kik.com/Kin%20Whitepaper%20v1.pdf https://kin.kik.com/Kin%20Whitepaper%20v1.pdf Also here's Fred Wilson's write-up (he's an investor in Kik): http://avc.com/2017/05/kin/ http://avc.com/2017/05/kin/
kalleboo 9y ago
Why did the submitter add "amid bitcoin boom" to the title here? Or did Bloomberg change it?
detroitcoder 9y ago
For clarification, Kin is a token using the Ethereum blockchain. There is a straight forward tutorial how anyone can create their own currency/rewards program/token. https://www.ethereum.org/token https://www.ethereum.org/token
PunchTornado 9y ago
Aren't these the guys behind the npm fiasco? Wouldn't use them.
pooper 9y ago
I have nothing good to say about Kik. I just want to remind anyone who is thinking about giving them money that they are the same litigious assholes who forced node and npm to give them (and not just deactivate) the namespace kik. They are obviously shitty people and everything they touch is shit.
- chickenfries 9y ago
  IIRC, it was npm (not node) that rolled over and gave it to kik just because they felt like it would be "confusing." http://blog.npmjs.org/post/141577284765/kik-left-pad-and-npm http://blog.npmjs.org/post/141577284765/kik-left-pad-and-npm https://medium.com/@mproberts/a-discussion-about-the-breaking-of-the-internet-3d4d2a83aa4d https://medium.com/@mproberts/a-discussion-about-the-breakin...
  - deletia 9y ago
    This ^ Arguably one of the best things to come out of that whole incident was NPM's realization that the (then) entire system of dependencies had a huge issue; that is, the fact that one pissed of developer could break a massive amount of production codebases. IMHO the incident was a good learning experience for the JS community as a whole and really shouldn't be framed so negatively all the time.
    - chickenfries 9y ago
      I think a lot of it was much ado over nothing, but I agree that if you didn't already mistrust tiny, anemic modules written by single developers in your production code that it was a good lesson.
      - deletia 9y ago
        Exactly :) A lot of larger companies affected needed a wake up call regardless.
        9y ago
dreamdu5t 9y ago
Not a single ICO has delivered its promised product or service. The only returns have been from new investors or speculation. I think it's still early to completely write them off as just pump and dumps
- sgspace 9y ago
  Have you ever heard of Ethereum? These Kik tokens run on top of Ethereum which had an ICO a couple years ago.
- benjaminmbrown 9y ago
  Define "delivered" please
rmason 9y ago
Here's a short video that explains what Kik is doing: https://vimeo.com/218866968 https://vimeo.com/218866968
mobilemidget 9y ago
Not booming today, dropped 500+
- placeybordeaux 9y ago
  Over a 24 hour period it's down 1.2%
mobilemidget 9y ago
Not booming today, dropped 500+
flylib 9y ago
this is hilarious, Facebook can just launch their own coin if needed if you want to compete with them that way by giving users coins which will give them monetary incentives to use your service, hell Kik is laying the playbook for FB to copy them
659087 9y ago
This is all starting to feel awfully similar to the time shortly before the last major bitcoin crash. I've had 2 people who know absolutely nothing about technology tell me of their plans to take out 401k loans to buy in over the past couple weeks. Both refused to hear it when I pointed out how bad this decision could turn out. Both had fully bought in to the stories being pushed by "$100k by the end of the year!" type crazies/pumpers on reddit.
baobabKoodaa 9y ago
Kik is launching their own digital currency as a token on the Ethereum network. Multiple tokens run on top of Ethereum. One of these tokens is called ETH. It's Ethereum's native and most widely accepted token. Why is Kik launching their own token instead of using ETH? Typically the answer to this question is about creating additional features that the native token ETH doesn't have (Ethereum tokens can be programmed to follow arbitrary rules). No, Kik's token will not have any additional features. The sole reason they are creating their own token instead of using ETH is to have a money printing machine that they control. It's in their white paper after several pages about decentralization and fairness. Search for "Kin Rewards Engine".
- DiNovi 9y ago
  ETH is not a token that runs ontop the network, it is the asset that powers the network.
  - baobabKoodaa 9y ago
    ETH is a token just as Kik's Kin will be a token. You are correct that it is built into Ethereum, rather than on top of Ethereum. I tried to make that distinction by calling it "native".
kleer001 9y ago
Silly.
patrickbolle 9y ago
HN threads on anything related to Ethereum (not Bitcoin) seem to really stir up a lot of junk and hate comments. So weird. I'm just a web dev that thinks Ethereum is really cool technology (and have made some great money from ETH), but there are a lot of naysayers here.
ge96 9y ago
You know "ML" throw that word around. I've seen some ehem sites where you get paid a fraction of a cryptocurrency for explicit photos. I was thinking for training an ML to recognize "acts" in explicit videos, you'd need a lot of data haha... so you'd need a way to pay people for their photos... but also the whole age thing... and why not regular money. But Kik... their own money... I don't know. Easier said than done obviously... I was also thinking about running a bitcoin node, watching transactions and providing an API analyzing sales for "patterns' but not sure... ahh... I wanted to cry when I bought Amazon gift card to convert my bitcoin to a "safe currency" and a few days later it grows by $700 whyyyy oh well.

127 points by rayuela 9y ago

pdog 9y ago

Why does Kik need a decentralized cryptocurrency to handle payments for digital goods? They can do it with virtual credits on their own servers a million times more efficiently.

almostApatriot1 9y ago
Because they can have an ICO for their coin and basically have other people fund the development + probably make money on the side.
cocktailpeanuts 9y ago
It's a change of business model. Instead of ads they're making a bet on cryptocurrency as a way to profit.
- almostApatriot1 9y ago
  Sort of, but not really. The whole kik points system model is to allow you to earn stuff for watching ads.
  - cocktailpeanuts 9y ago
    Yes, but the difference is, with the currency approach they are trying to raise their value through the coin price. They may employ ads and other "tactics" to make money in the process, but that's fundamentally different from previous approaches where you just give away everything for free and hope to get enough eyeballs to monetize via ads. And ad driven businesses are going through difficult times, and probably not the future of the Internet. They gotta start from somewhere, and the only business model that's familiar enough is the model you mentioned, and that's why they start out this way. It can succeed or it can fail, but if it succeeds they will probably branch out to other ways of making money outside of ads.
corry 9y ago
Because doing it as a decentralized cryptocurrency would allow it to one day be more significant than just an internal token systems. There is power in the combination of anonymous identity / messaging + bona fide cryptocurrency.
- s73ver 9y ago
  But, and this is the important thing, how does that help kik make more money?
  - benjaminmbrown 9y ago
    By owning 90% of a digital ecosystem
petertodd 9y ago
There are very rarely technical justifications for creating a new cryptocurrency. For starters, even if you need a token for technical reasons, you can always use a proof-of-burn token creation mechanism, and that proof-of-burn mechanism can enable two-way-trading(1) to ensure the coin doesn't become a separate asset. Another major problem is that we frequently see perfectly good ideas whose technical architectures are wrecked by the need to add an inefficient and unscalable consensus system to support a new cryptocurrency. For example, the original Ripple concept is a really good one, proven by the success of the analog equivalent, Hawala. Ripple could have continued on that basis - found investors for the standard open-source business model - and made a potentially useful system that at minimum would have represented good accounting software for banks (international banking is not unlike a very large scale, regulated, Hawala). Instead they decided to raise money via a token, XRP, and because of that token they needed to add a global consensus blockchain. The result was a system that had all the scalability problems of Bitcoin, and since they didn't use proof-of-work, an ill-defined consensus model that's secured in practice by a handful of private keys, all Ripple-controlled servers(2). If we're going to go down that route, why not just do it properly and have an actual legal contract with the people in charge? And with that legal contract, why do we need XRP? Why not just pay for the service with an existing currency? Frankly, I think most of these ICO's are transparent attempts to raise money while avoiding securities regulations. I'm sufficiently libertarian to have a mostly "buyer beware" attitude to that, but I sure as heck wouldn't want to be closely involved with one - very high risk the SEC will put a lot of people in jail over this, and the ethics of many of these schemes are very dubious. 1) https://petertodd.org/2014/setting-the-record-proof-of-publication#proof-of-publication-needs-scamcoins-like-mastercoin-and-counterparty https://petertodd.org/2014/setting-the-record-proof-of-publi... (read that URL link as 'Myth: Proof-of-publication needs “scamcoins” like Mastercoin and Counterparty' 2) https://github.com/petertodd/ripple-consensus-analysis-paper/blob/master/paper.pdf https://github.com/petertodd/ripple-consensus-analysis-paper... Written by me under contract for R3CEV (they were considering buying Ripple apparently, and I was doing due diligence for them and their members).
avip 9y ago
For VCs.
ftxrcc 9y ago
It's trendy. I don't see any reason why a chat app like Kik should make a crypto currency, other than "it's trendy and hip".

edmanet 9y ago

Why not just use bitcoin?

tlrobinson 9y ago
Because they want to cash in on the cryptocurrency hype.
AlwaysBCoding 9y ago
10-minute block times make Bitcoin unusable as a transactional currency in it's current state (don't shoot the messenger).
- JTon 9y ago
  What currency isn't transactional? I'm not following; are you suggesting bitcoin is not well suited for any purpose?
  - 52-6F-62 9y ago
    From my understanding, and what I can read from what they said: They're suggesting Bitcoin is not practical for what the current average rate of transactions on other payment networks would require of it, should it even take on a lesser portion of those transactions (eg. X-thousand transactions per second). It is useful however for a value store. Eg. You can't rightly trade units of gold 50,000 times per second, but it's a good bet that if you buy some and stow it that it will at least hold or even appreciate in value.
  - uncletammy 9y ago
    Believe it or not, Bitcoin isn't actually transactional these days. A new feature called "replace by fee" was introduced that allows coins that were used in a transaction which is still in queue for processing (hasn't yet been included in block by the miners) to be spent in a different transaction as long as the spender pays a high enough fee to jump to the front of the queue.
    - 9y ago

almostApatriot1 9y ago

The whole 'earn points for this' system seems like a good idea in general, but I wonder how appealing it will be for advertisers to buy coins that wind up having such an unstable price. By the time they make it to the consumer they could be worth half of what you paid for them. I imagine a simpler system would be more practical but the prospect of making tens of millions off of an ICO was just too appealing to pass up.

benjaminmbrown 9y ago
This system is designed to make advertisement obsolete

almostApatriot1 9y ago

Am I the only person who finds this kind of depressing and scary? I thought cryptocurrencies were supposed to be about democratization and decentralization. Now if you want to make money on Kik, you apparently are going to get paid in Kin, a currency Kik controls for which there is no standard conversion to USD. How is this different than getting paid in Walmart Dollars.

snissn 9y ago
It's good for Kik.. You are free to make your own messenger app so you can create your own cryptocurrency!
stingraycharles 9y ago
This concept has always existed, and you can compare it to e.g. steam credits. People found ways in the past to trade "virtual money" for real money, and this will be no different. The fact that it's a cryptocurrency adds a layer of transparency on top of it, and it looks like they're using it as an excuse to add additional value to their coin. In reality, though, market forces will probably figure this out, and if it's not practical to trade for "real" money, it will not be worth much to app developers.
- nwah1 9y ago
  Let's not forget the enormous in-built demand for fiat currencies via taxation.
  - colefichter 9y ago
    > Let's not forget the enormous in-built demand for fiat currencies via taxation. I understand that the whole libertarian-hipster-goldbug thing is in vogue right now, but what does this even mean?
    - andirk 9y ago
      >> Let's not forget the enormous in-built demand for fiat currencies via taxation. > I understand that the whole libertarian-hipster-goldbug thing is in vogue right now, but what does this even mean? If an in-built currency for fiat taxation is on the cover of Vogue (psst, it's Bloomberg), then what does this even mean?

conradk 9y ago

I'd guess they probably kept a few thousands or million coins for themselves. This way if this takes off, they'll have millions of dollars worth of coin to trade for real money. Or else they'll act as an exchange, which seems to be a good business too, as long as you have enough capital to get it going.

koolba 9y ago
s/trade against/trade for/
- conradk 9y ago
  edited, thanks
rch 9y ago
Someone should work through the mechanics of doing this as a form of IPO, without running afoul of applicable regulations.
- seibelj 9y ago
  The is already happening en masse. Look up "initial coin offerings" (ICO's)[0] [0] http://www.investopedia.com/terms/i/initial-coin-offering-ico.asp http://www.investopedia.com/terms/i/initial-coin-offering-ic...
JustAnotherPat 9y ago
there will be 10 trillion coins and they plan to keep 9 trillion of them. So more like a few thousand million, not thousand OR million :)

lwlml 9y ago

There is a reason why you shouldn't adopt the e-mail address or phone number your cable company _could_provide to you: it ties you closer to their network and increases your dependence on it. I doubt that Kik's "core competencies" are anywhere near what it would take to launch and maintain a digital currency. So, don't call it a digital currency and call it for what it really is, a "customer loyalty" program where hard money and attention is traded for scrip that never... ever... leaves the "company store."

SurrealSoul 9y ago

At what point does a premium virtual asset become a "currency" For example, if Clash of Clans has gems that you purchase to purchase items and such inside the application, is that a currency? '...sells tokens that can be used to buy services on its platform. The idea is that as more and more people use Kik, the value of those tokens, called “Kin”, will rise in value.' But how is this different than buying premium currency in a free to play game? The "Kin" can only be used inside Kik, how does the value increase?

ben_jones 9y ago
IANAL but I imagine their are legal boundaries that come in place the second they become transferable, the second they cross international borders, etc. Personally I would argue the first time they are used to buy drugs has a cultural significance. I wonder where bitcoin would be without the Silkroad.
dyarosla 9y ago
That was exactly my thought process. A cryptocurrency only has value if it's seen as valuable in multiple contexts. There's no indication why value would increase externally of Kik for Kin.
pjc50 9y ago
At this stage ICOs which have a sufficient hype factor have an upward ramp in trading after launch, which attracts a lot of unsophisticated libertarian investors ("suckers"). Kik seem to have decided to get in on this action, as it's sufficiently distinct from plain Ponzi to appear legal.
corry 9y ago
Respectfully, I think you and others in this thread defining "Kin" too narrowly by thinking of it exclusively a premium virtual token for use inside of Kik. Yes, that's obviously the first use-case. But thinking bigger, the combination of anonymous identity / mobile messaging + bona fide cryptocurrency can lead to something way more significant for Kik's users (who are primarily teenagers & pre-teens - people don't have access to credit and find it difficult to participate in the economy). Assuming some level of mass adoption / easy FX to Bitcoin or traditional currency... Kin could represent a new way in which these users could meaningfully participate economically. Kin will be tied to their anonymous Kik identity; it's managed through Kik which is always-on always-with-them (smartphone); it's the lingua franca for buying stuff inside of Kik with their friends & fav brands. And if they can eventually use Kin outside of Kik (either directly or via simple FX mechanics) - could be a game-changer. So from Kik's POV it's definitely worth the extra headaches and effort to try to do this as a cryptocurrency vs. just internal tokens. Worst case, it doesn't really work and they've over-engineered a token system. Best case, they're a major player in the next-gen of cryptocurrencies.

dharma1 9y ago

Educated guesses when regulators will comment on ICOs, and the impact of that on the crypto market?

EternalData 9y ago

Not sure the cryptocurrency boom and gift certificate utility are super-correlated -- Target has been trying to trap me and my USD with those checkout cards for ages. Usually the incentive is social shame for not just giving straight cash to my friends as gifts -- here, I'm not so sure? I guess it's about as viable as Dogecoin.

deft 9y ago

Kik releases interesting features about every 6 months, then promptly abandons them. They had a cool 'webapp' feature with a JS library for people to write browser apps that ran and integrated inside of kik. They dropped that and launched the bot store. Before this they had Kik Games, which were dropped for the browser. Not sure why they do this. They still haven't monetized bots (I'm guessing this is how they will). Games and webapps could be monetized from the start as embedding ads was easy. I don't know what Kik is doing.

dyarosla 9y ago
Maybe they don't either? Looks like a lot of test pivots?

oryband 9y ago

Please see https://kin.kik.com https://kin.kik.com for more info, https://reddit.com/r/KinFoundation https://reddit.com/r/KinFoundation, and http://slack.kinfoundation.com http://slack.kinfoundation.com for discussion.

dalbasal 9y ago

Are any of the cryptocurrencies out there with a "monetary policy" aim of fised exchange rates, IE a digital derivative of USD or EUR? I know this is sort of heretical in that it abandons some of the lofty, revolutionary goals of digital currency but... Currencies like e-pesa or the simpler share-able phone credit pseudo-currencies, give their users stable values. It's hard to imagine a neigborhood shop in Manilla dealing with bitcoin's volatility. I think you need either (1) very fast, cheap & easy ways of converting to hard currency or (2) price stability. I was hoping that bitcoin would develop the first. That way bitcoin could work as a sort of infrastructure, with most people thinking in fiat currencies but the actual transaction taking place in bitcoin. That hasn't really happened. ^Oh, and I generally like the idea of bootstrapping up to full fledged currency from an embedded, toy currency base. Good luck Kik.

flashdance 9y ago
Tether is a cryptocurrency that attempts to have a fixed exchange rate with the USD. It does this fairly okay-ish. There were a few moments when its price dropped well below $1 because of insolvency fears but it seems to have rebounded. Below is the whitepaper: https://bravenewcoin.com/assets/Whitepapers/Tether-White-Paper.pdf https://bravenewcoin.com/assets/Whitepapers/Tether-White-Pap...
elif 9y ago
ok, so you mint coins proportional to increases in price in order to match your target price.. you distribute those coins equally among all coin holder proportional to their holdings. assuming you can mint coins continuously, you are able to keep the price fixed... Until the elephants (biggest holders) realize that they can buy at $1.01 to ensure they keep getting minting payouts which eclipse the $0.01 premium they are paying to float the market. It's a runaway feedback loop for them until... the the price drops below $1.00. What is the mechanism to deflate the currency? a greek style haircut seizure? welcome to a flash crash as all rational parties move their value to other currencies... so to prevent the former feedback loop, you can impose a sufficient transaction fee. to prevent the latter feedback loop you can implement bank-style currency controls, a technical limit on withdrawal rates.. so you end up with a currency which is subject to the exact same (perpetual inflation) negative performance of its fiat counterpart, but with higher fees and stricter controls in place... So it's got the worst of both worlds

corry 9y ago

Here's the whitepaper that actually discusses what they are doing (much better than this article IMO): https://kin.kik.com/Kin%20Whitepaper%20v1.pdf https://kin.kik.com/Kin%20Whitepaper%20v1.pdf Also here's Fred Wilson's write-up (he's an investor in Kik): http://avc.com/2017/05/kin/ http://avc.com/2017/05/kin/

kalleboo 9y ago

Why did the submitter add "amid bitcoin boom" to the title here? Or did Bloomberg change it?

detroitcoder 9y ago

For clarification, Kin is a token using the Ethereum blockchain. There is a straight forward tutorial how anyone can create their own currency/rewards program/token. https://www.ethereum.org/token https://www.ethereum.org/token

PunchTornado 9y ago

Aren't these the guys behind the npm fiasco? Wouldn't use them.

pooper 9y ago

I have nothing good to say about Kik. I just want to remind anyone who is thinking about giving them money that they are the same litigious assholes who forced node and npm to give them (and not just deactivate) the namespace kik. They are obviously shitty people and everything they touch is shit.

chickenfries 9y ago
IIRC, it was npm (not node) that rolled over and gave it to kik just because they felt like it would be "confusing." http://blog.npmjs.org/post/141577284765/kik-left-pad-and-npm http://blog.npmjs.org/post/141577284765/kik-left-pad-and-npm https://medium.com/@mproberts/a-discussion-about-the-breaking-of-the-internet-3d4d2a83aa4d https://medium.com/@mproberts/a-discussion-about-the-breakin...
- deletia 9y ago
  This ^ Arguably one of the best things to come out of that whole incident was NPM's realization that the (then) entire system of dependencies had a huge issue; that is, the fact that one pissed of developer could break a massive amount of production codebases. IMHO the incident was a good learning experience for the JS community as a whole and really shouldn't be framed so negatively all the time.
  - chickenfries 9y ago
    I think a lot of it was much ado over nothing, but I agree that if you didn't already mistrust tiny, anemic modules written by single developers in your production code that it was a good lesson.
    - deletia 9y ago
      Exactly :) A lot of larger companies affected needed a wake up call regardless.
      - 9y ago

dreamdu5t 9y ago

Not a single ICO has delivered its promised product or service. The only returns have been from new investors or speculation. I think it's still early to completely write them off as just pump and dumps

sgspace 9y ago
Have you ever heard of Ethereum? These Kik tokens run on top of Ethereum which had an ICO a couple years ago.
benjaminmbrown 9y ago
Define "delivered" please

rmason 9y ago

Here's a short video that explains what Kik is doing: https://vimeo.com/218866968 https://vimeo.com/218866968

mobilemidget 9y ago

Not booming today, dropped 500+

placeybordeaux 9y ago
Over a 24 hour period it's down 1.2%

mobilemidget 9y ago

Not booming today, dropped 500+

flylib 9y ago

this is hilarious, Facebook can just launch their own coin if needed if you want to compete with them that way by giving users coins which will give them monetary incentives to use your service, hell Kik is laying the playbook for FB to copy them

659087 9y ago

This is all starting to feel awfully similar to the time shortly before the last major bitcoin crash. I've had 2 people who know absolutely nothing about technology tell me of their plans to take out 401k loans to buy in over the past couple weeks. Both refused to hear it when I pointed out how bad this decision could turn out. Both had fully bought in to the stories being pushed by "$100k by the end of the year!" type crazies/pumpers on reddit.

baobabKoodaa 9y ago

Kik is launching their own digital currency as a token on the Ethereum network. Multiple tokens run on top of Ethereum. One of these tokens is called ETH. It's Ethereum's native and most widely accepted token. Why is Kik launching their own token instead of using ETH? Typically the answer to this question is about creating additional features that the native token ETH doesn't have (Ethereum tokens can be programmed to follow arbitrary rules). No, Kik's token will not have any additional features. The sole reason they are creating their own token instead of using ETH is to have a money printing machine that they control. It's in their white paper after several pages about decentralization and fairness. Search for "Kin Rewards Engine".

DiNovi 9y ago
ETH is not a token that runs ontop the network, it is the asset that powers the network.
- baobabKoodaa 9y ago
  ETH is a token just as Kik's Kin will be a token. You are correct that it is built into Ethereum, rather than on top of Ethereum. I tried to make that distinction by calling it "native".

kleer001 9y ago

Silly.

patrickbolle 9y ago

HN threads on anything related to Ethereum (not Bitcoin) seem to really stir up a lot of junk and hate comments. So weird. I'm just a web dev that thinks Ethereum is really cool technology (and have made some great money from ETH), but there are a lot of naysayers here.

ge96 9y ago

You know "ML" throw that word around. I've seen some ehem sites where you get paid a fraction of a cryptocurrency for explicit photos. I was thinking for training an ML to recognize "acts" in explicit videos, you'd need a lot of data haha... so you'd need a way to pay people for their photos... but also the whole age thing... and why not regular money. But Kik... their own money... I don't know. Easier said than done obviously... I was also thinking about running a bitcoin node, watching transactions and providing an API analyzing sales for "patterns' but not sure... ahh... I wanted to cry when I bought Amazon gift card to convert my bitcoin to a "safe currency" and a few days later it grows by $700 whyyyy oh well.