Messaging app Kik is in headlines this week after the company announced plans to launch its own cryptocurrency. Kik will use the cryptocurrency as its primary transaction currency.
In an interview with CNBC, Kik founder and CEO Tod Livingston described how cryptocurrencies were a fundamentally new way to monetize a community.
The announcement comes as cryptocurrencies have hit record highs throughout this year. Bitcoin, for example, hit a record high of $2800 USD on Thursday before dropping down to $2500. It’s up 150% on the year.
Canada-based Kik was inspired by the recent success of bitcoin and decided it was the right time to announce their cryptocurrency, according to the CNBC interview.
Kik’s new cryptocurrency allows it to use an internationalized currency for many transactions. The move is designed to help Kik compete with growing messenger apps – like Asia’s WeChat.
In China, the popular WeChat messenger app can be used to listen to music, order food, or make payments. Companies like Facebook would love to replicate that success – so Kik is getting a headstart on the competition.
“This is something we’ve been experimenting with since 2014”, Livingston explained to CNBC.
Livingston went on to explain how users can earn the new cryptocurrency: they can watch ads, they can host a great group chat, build a great bot, or create a fun sticker, for example.
How does that make money for Kik? Like other cryptocurrencies, Kik plans to produce only a set amount of currency. They’ll hold onto a fraction of that cryptocurrency themselves. Then, as the currency becomes more popular and grows in value, the value of their share will rise.
The Currency Is Called Kin
Kik’s new cryptocurrency is called Kin. The digital currency will be created as an ERC20 token on the Ethereum blockchain. The token won’t just exist within the Kik ecosystem, but Kik hopes other companies will grow to adopt it as well.
Kin will help democratize the way users pay for services, products, and experiences through the app. Kin could also be used by developers to create businesses outside of walled gardens like Facebook.
For example, users can earn and redeem Kin within Kik without using it as a traditional currency, while anyone can buy or sell Kin publicly through the Ethereum blockchain – regardless of whether or not they even use Kik messenger.
How To Earn & Spend Kin
What kinds of experiences will Kin be used for? Kik plans to replicate the WeChat experience, where customers interact with brands through the messenger.
Companies have already created chatbots for Facebook Messenger and other messengers, for example, and chatbot engagement is famously high – especially among younger demographics. Put simply, younger people prefer to shop through chatbots compared to conventional shopping websites.
With that in mind, Kik could allow users to earn the currency by watching advertisements, or by interacting with chatbots created by brands and publishers.
Alternatively, companies could reward users with Kin in exchange for posting about them “or interacting with an experience”. Then, users could spend their Kin through the chatbot – say, by buying products and services through the company or through tipping.
The Kik ICO
Kik’s initial coin offering (ICO) will take place later this year. No date has been announced.
During the ICO, Kik will sell 10% of its Kin reserves, and then begin integrating the currency into the Kik platform. Sometime after that, Kik will create its Kin Rewards Engine and Kin Foundation to give users a wider range of users for their Kin tokens.
Kik has 300 million registered users and 15 million monthly users. Stay tuned to see if Kik takes off when the ICO takes place later this year.