The Kik Messenger app is among the most widely used chat messengers globally. Recently, ETHNews had an opportunity to speak to Kik CEO and Founder Ted Livingston about Kik's new cryptocurrency, the Kin token, the Kin Foundation, and some of the vision behind what lead Kik to the Ethereum blockchain.
Livingston described why Ethereum was chosen to launch the Kin token, saying, "We did look at quite a few blockchains. At the end of the day, it seemed like Ethereum was the obvious choice. It has wide adoption, a great platform, and ERC20 tokens that create liquidity right away."
In 2011, Livingston had his sights on Bitcoin, which he expressed interest in, but saw limitations because no one was getting paid in bitcoin; it lacked the liquidity one might ascribe to a currency and, instead, acted more like a vehicle for the storage of value. As an Ethereum-based ERC20 token, Livingston believes Kin will be able to unify liquidity alongside value storage because the fixed number of coins will create scarcity as demand rises.
To Livingston, the Kin token represents an opportunity to distribute value amongst developers. He said Kik realized that if Kik Points (a currency established by the messenger app back in 2014) were put on the blockchain, it might be one of the most used cryptocurrencies in the world. Livingston asked:
"But what if instead of just doing that, we then took a large chunk of that value and gave some away every day to developers to come build an open and decentralized ecosystem of apps with us? What if this became bigger than just Kik? What if we used a cryptocurrency to economically align potentially tens of thousands of developers to all work together to provide value to consumers in this new way where you're not trying to do advertising? You're not trying to sell stuff, whether it's physical or virtual, you're just trying to bring people together and get them providing value to each other through this shared cryptocurrency, Kin."
Livingston wanted to put himself in the developers' shoes to get an understanding of what would be important to them. He envisions The Kin Foundation as the manifestation of a not-for-profit governance organization that will ultimately be decentralized and autonomous. Livingston said that due to this autonomy, "as a developer you don't need to trust anybody, not even Kin."
The Kin Foundation will present developers who couldn't make money providing value to consumers a chance to earn through its Kin distribution model. Part of the reason for this, Livingston explains, is that advertising costs couple with consumers who want to get items for free, making it difficult for smaller developers to monetize their products and services. "You have all these developers out there who have built these great experiences ... but they just can't find a monetization model," Livingston explained. "They can't find a way to build a sustainable business." He described how huge companies have the data and ability to scale to get funding from advertisers and thereby provide everything else to users for free to garner attention, thus earning more advertising revenue. In so doing, these larger companies squeeze out smaller developers who need revenue to operate but cannot monetize a business model. The Kin Foundation is designed to support these developers and foster new innovations.
Livingston's focus is to create an ecosystem that’s not based around advertising, but on users providing value to one another and being rewarded for it alongside developers who are also rewarded for generating content and transactions through the Kin network. According to Livingston, tying the currency to the blockchain provides two distinct advantages. "The first advantage is that you can guarantee the scarcity of the token. So once it's created, you can guarantee to everybody in the ecosystem ... there's never going to be any more of these."
He notes the second advantage that blockchains offer is that a token can be guaranteed forever. "Once you get it – because it's on the blockchain – that will forever be yours and you will control it. So what these two attributes of the blockchain let you do is really create value in a totally new way."
Kik has a few edges over its competitors, according to Livingston. It has a long history in chat; Livingston started the company in 2009. Livingston said Kik was the world's first platform to launch 100,000 bots from 100,000 developers in 2014. He also counts an amazing, tight-knit team as a significant factor in Kik's success. According to Livingston, these factors, alongside Kik's massive user base, make the company unique in the crypto-space.
Livingston foresees a future where Kik will give the world access to a marketplace using bot platforms and developers can create different experiences for users to engage them in spending Kin. "It could be fashion advice, it could be gaming, it could be any one of these different interests," said Livingston. He went on to say that because Kik will house the interface, users will easily be able to integrate with the services. "You don't need to download a new app. You don't need to create a new account, you don't even need to learn a new interface ... it's just right there in the [Kik] app."
The world awaits uniform regulation from lawmakers who are still ruminating over policies to govern cryptocurrencies and the technology supporting them. Livingston believes that regulation for blockchain technology should maximize the safety of consumers, but also warns that regulations have a history of dampening innovation risk, thereby pushing developers to other countries. He said, "This is a new innovation and, like any new innovation, it creates new opportunities but also new challenges." He went on to say, "It's going to take some time and it really needs to be approached carefully. It will be a fine line; too much regulation, you'll kill [innovation], it will move to another country. Too little regulation and you won't be maximizing the safety of consumers."
Livingston identified an obstacle for Ethereum that developers are currently working to alleviate: scalability. "We think the scalability of the Ethereum network is the number one challenge for the industry to overcome," said Livingston. It's something the Kik team has put a lot of thought into. "If we wanted to give 5 kin to each of our users and do that on-chain ... it would eat up the entire capacity of the entire Ethereum network for 23 days." In the short term, Kik will employ an on-chain/off-chain option which is semi-centralized.
In the long run, Livingston foresees the integration of scalability as the culmination of what he calls "Blockchain 3.0." He explained that "Blockchain 1.0" was bitcoin and the ability to guarantee the scarcity of a digital asset. "Blockchain 2.0" came with Ethereum and the addition of executable distributed code contracts (EDCCs). "Blockchain 3.0" will mix together the utility of EDCCs, guaranteed scarcity, and the scalability that the network needs in order to process more transactions.
Livingston leaves an impression of excitement as he looks forward to the future of the industry. "Every week now another network does a token distribution event ... it sort of feels like the early days of mobile."