As I'm sure many of you are aware, The creators of Kik Messenger have an upcoming ICO for a new cryptocurrency to integrate with their platform. I have taken the time to read the whitepaper, and while it is more of a sales pitch than a low-level technical description, there are some details that I find to be worth sharing.
The Basics
- Kin will be built on Ethereum following the ERC20 Token Standard.
- There will be a fixed supply of 10 trillion tokens, 1/10th of which will be sold during the ICO sale.
- All tokens will be pre-generated by Kik Interactive (ie. no proof of work/stake mechanisms).
- Users of Kik messenger will be able to earn Kin without any need to interact with an exchange.
- Cryptocurrency traders will be able to obtain Kin on exchanges.
Tested Waters
Those of you who do not have a lot of familiarity with Kik should be aware that they have experimented with digital currency integration in the past already. For 2.5 years (2014-2016), Kik integrated a non-blockchain digital currency called Kik Points into their platform. Kik Points could be earned by users in exchange for watching adverts, filling out surveys, or various other tasks. During the time of this experiment, Kik Point transaction volumes were reportedly higher than Bitcoin's by a fair margin as can be seen in the image below (source: Kin Whitepaper).
Scalability? Centralization?
If the Kik Points experiment can be seen as a sign of things to come, this raises the question of scalability. Is such a large influx of transactions a potential cause of concern for the Ethereum network (and by extension, Kin)? The Kin team seems to think it is. Additionally, it is believed that Ethereum's network transaction fees may pose an additional barrier for the usage of Kin. For these reasons, it is planned to develop an off-chain solution for dealing with transactions between users within the Kik Messenger client. This off-chain solution will be centralized but will allow faster transactions, prevent unnecessary congestion of the Ethereum network, and eliminate the necessity to pay transaction fees until a user wants to transfer their Kin to a wallet outside of Kik (ie. exchange or offline wallet).
Conclusion
While the partially centralized nature of this token is likely to be a turnoff to the majority of the cryptocurrency community, it is important to remember that the target demographic here is mostly teenagers who have very little or no experience dealing with cryptocurrency. With Kik's existing platform consisting of roughly 15 million monthly users, I believe this is a great way to introduce cryptocurrency to today's youth and normalize it so that they may go on to use other major cryptocurrencies as well (ie. ETH, BTC, STEEM, etc...). I can only see this as a positive thing for the cryptocurrency market as a whole as these users begin see cryptocurrency as a normal way to perform their daily transactions. Additionally, Kin is non-inflationary due to the fixed supply, which is great for initial investors. While the official timeline for the ICO sale has not yet been announced, it is very likely I will be participating. The technical whitepaper should be released in a few weeks and I may consider sharing a breakdown of that as well.
Please let me know in the comments if you have any questions or if you would like to see more whitepaper breakdowns from me in the future. Thanks for reading. I hope you enjoyed!