
Kik Messenger App Debuts Own Digital Currency Amid Bitcoin Boom - rayuela
https://www.bloomberg.com/news/articles/2017-05-25/kik-messenger-app-debuts-own-digital-currency-amid-bitcoin-boom
======
almostApatriot1
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.

~~~
atemerev
This _is_ democracy and decentralization -- allowing private entities to issue
their own currencies. It is much better than the single monopoly of the
government-issued money.

~~~
foepys
> allowing private entities to issue their own currencies. It is much better
> than the single monopoly of the government-issued money.

Please elaborate on this.

Why is it better for the people to have dozens of currencies that they can
only use for a very limited selection of stores and have to trade for other
uses?

The only incentive for "private currencies", that I heard of, is to confuse
customers and make them forget that they are, in fact, using real money and
not only digital tokens.

~~~
splintercell
> Why is it better for the people to have dozens of currencies that they can
> only use for a very limited selection of stores and have to trade for other
> uses?

It isn't necessarily better to have dozens of different currencies, but it is
better to have the ability to issue your own currencies rather than be
dependent upon a single monopoly which may (and does) abuse its power.

Second thing is, there is no real way to determine how many currencies/tokens
are consumers ok with, other than to really try it out in the market. Let me
use an example.

Today if you have Amazon prime TV, then they have a whole section
subscriptions for channels where you can subscribe to Prime, Netflix, Hulu,
Crackle, CBS, Showtime, Scifi, History Channel etc, services. Initially it
started out with just Prime, Netflix, and Hulu, but now there are so many
options, you can't just watch Homeland if you have these three subscriptions.
The problem isn't just that you need to pay more, but rather that you have to
subscribe to so many services.

This is too confusing, but this also means that this is a problem to be
solved. In future (and I think some company has already started) to build a
package subscription. Maybe another solution would be to have every show a
pay-per-view basis (which Amazon already does).

The idea is, that the reason why different subscription services exists
because of some other, unavoidable business reason. But this can be solved
from the user experience point of view differently without resorting to a govt
monopoly on entertainment.

Same thing goes with these cryptocurrencies. They exist for different,
unavoidable business reason, but it is also annoying to have to deal with
different currencies, so I believe in future there will be more basket of
currencies solution (like ICONOMI) which allows people to hold 2-3 cryptos at
max, and from their POV, the conversion and payment to the native currency
happens seamlessly.

~~~
sharemywin
The problem is volatility. If the amount of people that are speculating >>>>
than people willing to sell other things to buy "your coin" in a bad market.
You could collapse the currency.

~~~
splintercell
But that's the whole point. We have solved this problem for over 2000 years
now using financial derivatives.

A farmer in ancient Rome did not want to undertake the volatility of grain
prices when his crop eventually comes to the market, so what he did is sells
his future crop to a fixed current price to someone who wants to undertake the
risk of price fluctuations, and this way a speculator got the profit which
came out of correctly predicting the future grain prices and farmer got a
fixed predictable price.

Same goes with these currencies. A speculator might provide enough liquidity
to your crypto, in return he gets a better deal for your coins.

------
SurrealSoul
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?

~~~
corry
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.

~~~
corry
Note: I just came across this:
[http://avc.com/2017/05/kin/](http://avc.com/2017/05/kin/)

Much better detail on the what's / how's / why's. Including link to the
whitepaper.

~~~
noxToken
This makes much more sense. I thought it was just currency that needed to be
exchanged from real USD. You can earn it as a reward. It just might be a game-
changer.

------
baobabKoodaa
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
ETH is not a token that runs ontop the network, it is the asset that powers
the network.

~~~
baobabKoodaa
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".

------
pooper
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
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-
breakin...](https://medium.com/@mproberts/a-discussion-about-the-breaking-of-
the-internet-3d4d2a83aa4d)

~~~
deletia
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
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
Exactly :)

A lot of larger companies affected needed a wake up call regardless.

~~~
pooper
The issue to me isn't the deletion of modules but rather the reassignment of
modules. I'm completely ok with deleting modules. I am not ok with taking a
name that used to exist and just giving it to someone else. That is the crime
here not the deletion of modules. That should be the wake up call.

------
lwlml
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."

------
pdog
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.

~~~
corry
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
But, and this is the important thing, how does that help kik make more money?

~~~
benjaminmbrown
By owning 90% of a digital ecosystem

------
659087
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.

------
dalbasal
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.

~~~
drdeca
a group called "MakerDao" is working on a token on Ethereum called Dai, which
is backed by collateral in the form of a variety of different tokens, and is
set up so that the price will target some multiple of something called
"Special Drawing Rights", which is a basket of national currencies.

I think eDollar is (was?) going to be (is?) something backed with Dai, which
would target the value of USD . (I have not kept up with it, so I don't know
what the state of eDollar is.)

~~~
RexetBlell
There is also Digix which plans to issue Gold backed tokens.
[https://www.dgx.io/](https://www.dgx.io/)

------
conradk
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.

~~~
rch
Someone should work through the mechanics of doing this as a form of IPO,
without running afoul of applicable regulations.

~~~
seibelj
The is already happening en masse. Look up "initial coin offerings" (ICO's)[0]

[0] [http://www.investopedia.com/terms/i/initial-coin-offering-
ic...](http://www.investopedia.com/terms/i/initial-coin-offering-ico.asp)

------
detroitcoder
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)

------
EternalData
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.

------
ge96
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.

------
patrickbolle
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.

------
dharma1
Educated guesses when regulators will comment on ICOs, and the impact of that
on the crypto market?

------
deft
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
Maybe they don't either? Looks like a lot of test pivots?

------
dreamdu5t
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
Have you ever heard of Ethereum? These Kik tokens run on top of Ethereum which
had an ICO a couple years ago.

------
corry
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/)

------
almostApatriot1
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
This system is designed to make advertisement obsolete

------
oryband
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.

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

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

------
rmason
Here's a short video that explains what Kik is doing:

[https://vimeo.com/218866968](https://vimeo.com/218866968)

------
flylib
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

------
edmanet
Why not just use bitcoin?

~~~
AlwaysBCoding
10-minute block times make Bitcoin unusable as a transactional currency in
it's current state (don't shoot the messenger).

~~~
JTon
What currency isn't transactional? I'm not following; are you suggesting
bitcoin is not well suited for any purpose?

~~~
uncletammy
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.

~~~
placeybordeaux
I was under the impression that that had always been allowed by the protocol,
it's just an implementation detail on if a node will relay the tx and which tx
the miner will choose.

------
mobilemidget
Not booming today, dropped 500+

~~~
placeybordeaux
Over a 24 hour period it's down 1.2%

------
kleer001
Silly.

