On May 25, Kik Interactive announced that the firm would be introducing its own cryptocurrency, which will enable users to purchase digital services on its platform.
Messaging app Kik just announced that it would be launching a new cryptocurrency called Kin, to be used to buy digital services within the app.Kik Interactive is behind the "Kik" messaging service based in Canada. The free messaging and chat app, founded in 2009, is geared towards a teen demographic.
It boasts of around 300 million registered users. The proposed cryptocurrency is called "Kin," a short form of Kinship or community.
The plans to launch the cryptocurrency are currently underway and the company's officials expect the system to debut sometime this year. The firm did not reveal how much cryptocurrency it plans to raise.
However, Kik stated that it would release 10 percent of the total coinage during the first sale. This is referred to as initial coin offerings (ICO).
ICO involves creating a virtual asset and selling it to the public. It is a common unregulated method employed by blockchain companies to raise capital.
It seems like Kik Interactive is looking to leverage the current growing interest in blockchain-based cryptocurrency around the world.
Kik CEO Ted Livingston wrote in a blog post that the launch of this cryptocurrency is the first step in the creation of a decentralized ecosystem of digital services. He also pointed to the fact that it would be the first social media app to develop its very own cryptocurrency for public sale.
Kin will be developed on the Ethereum blockchain, the public ledger similar to Bitcoin. It'll be deployed as an ER20 token, which will serve as a basis for interoperability with other features and services offered by Kin.
The digital currency aims to open doors to a varied range of participants, thus creating an ecosystem where users can access digital services.
Although the cryptocurrency sales are largely used to generate capital, this strategy also grants coin holders a certain degree of ownership, as they can contribute to the total output of the decentralized system.
Kik aims to take advantage of this to develop a system where developers can be rewarded outside of advertising. The Kin cryptocurrency will initially be employed to facilitate all kinds of services, such as buying live video streams and video games within the Kik platform.
The digital currency will eventually expand to cater to other services.
Following the integration of Kin with Kik, the firm will develop a Kin Rewards framework where Kin will be promoted as a cryptocurrency. Stakeholders will be granted Kin through an algorithm that will reflect each stakeholder's contribution to the platform.
This framework will act as an incentive for various digital services to become part of the Kin cryptocurrency.
Livingston says the reward framework will be based on smart contract technology. The daily rewards made available to developers within the ecosystem will begin at approximately $100,000 once it is established.
The daily sum will be split among the owners of various services. Each developer will take home a percentage of this sum depending on the number of cryptocurrency transactions attributed to their service.
As the daily award increases, more services will become part of the ecosystem. The cumulative effect is a steady increase in both the daily reward and the number of service.
The firm hopes that through this operational model, the Kin cryptocurrency can become a powerful economic force in the digital services sector.
Kik's cryptocurrency announcement indicated that the service might monetize complementary services such as sticker sales, bots and hosted group chats.
Payment options for bots and similar features can significantly increase their potential.
Other social media services have existing frameworks for payment support of bots, like Facebook's payment system through Messenger and Telegram's chatbot payment service.
But Kik plans to open source its client and server code in an effort to showcase its commitment to decentralization.
Kik Interactive will also establish the Kin Foundation.
It'll be a non-profit organization that will support an ecosystem of cryptocurrency and digital services for consumers, as well as a platform through which developers can monetize their offerings.
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