- Kik and Facebook seem to have similar interests
- Both companies want to improve their revenue model
Facebook has recently released the Libra cryptocurrency, which aims at improving Facebook’s presence in the financial system. In order for users to use the new digital asset, they will have to install the wallet Calibra, which is expected to be released to the market in 2020. There have been several backers and partners behind the launch of this digital asset and project, including PayPal, MasterCard or Mercado Libre, among others. Now, there are several analysts trying to understand which are going to be the effects of this announcement in the crypto market and in the largest digital assets.
Facebook’s Libra Vs Kik’s Kin
There is another digital currency that was launched by another messaging application. Tech Crunch wrote an article in which they compare Kik’s Kin, which is also a social network. A short time ago, Kik was in the news due to a current U.S. Securities and Exchange Commission (SEC) lawsuit that targeted Initial Coin Offerings (ICOs), and Kik ran one in 2017. According to the regulatory agency, Kik’s $100 million ICO was illegal because it was not registered with any agency.
At Creative Destruction Lab’s Super Session, Ted Livingston, the CEO of Kik, said that Kin was originally created to address the challenges that Kik had. Although Kik never achieved the scale of Facebook, it had moments of impressive success in terms of the number of users in the community. One of the main differences that this network has with Facebook is related to the fact that Kik never pursued an aggressive ads-based campaign.
The CEO of Kik explained that Kin made sense because it was an effective and easy way for people on the platform to exchange value. As per Darrell Etherington, the author of the article at Tech Crunch, the major difference between Facebook and Kik is the scale of their companies.
Kik needed a digital currency as soon as possible, this is why they’ve decided to start an Initial Coin Offering and gather funds. Meanwhile, Facebook was able to bring into their network collaborators that were able to work on the digital asset they released. They also have the possibility to keep expanding their business model through advertising.
As the author explains, both Kik and Facebook were searching for a new revenue model other than advertising, which could make their businesses much more sustainable and palatable to consumers.
Facebook will have to prove that their digital currency is able to fulfill the expectations that the market currently has. They might be able to help users around the world have access to financial services and allow them to transfer value as they send or receive a text message. Now it is just time to see which is the effect that Facebook’s Libra is going to have in the space.