KiK, a popular chat app, especially with teenagers, used by 300 million people, including 40% of USA’s teenagers, known for its anonymity as it does not retain users data and doesn’t ask for a phone number to sign up unlike other apps, is to launch an ethereum based token called Kin.
The motivation appears to be both monetary and conceptual. On their website, they state that “more and more of services are controlled by a diminishing number of companies. If left unchecked, a few private companies are poised to exercise absolute authority over the digital services everyone uses, effectively eliminating consumer choice on a global scale.”
In a whitepaper they expand further to state that “today, we are witnessing the next evolutionary leap: the assimilation of economic value into communication systems.” KiK then argues the complete reliance on the advertising model favors giant companies due to network effects, such as Facebook with its walled gardens. KiK says:
“Large companies enjoy the compounding interest of incumbency, concentrating wealth and power in the hands of the few, often to the detriment of consumer privacy and user experience and almost always at the expense of new entrants to the sector.”
The popular chat app then makes their intention to disrupt the industry very clear by stating that “to safeguard the key tenets of a market-based economy and prolong innovation in the technology sector, the internet needs a fundamentally different way of doing business.”
That different way they envisage is a token economy, where users are rewarded for participating and developers are given rewards based on the number of users they serve, but full details have not yet been made clear.
That means we are likely to hear more details in the coming weeks, but one detail KiK has made clear is that the token will be launched on eth. They say:
“Ethereum’s ability to deploy Turing-complete trustless smart contracts enables complex issuance rules for cryptocurrencies, digital financial contracts, and automated incentive structures. These advanced features and active ecosystem make Ethereum a natural fit for Kin.”
Commentary: A Tipping Point for Ethereum?
This latest development is interesting on many levels because firstly it suggests established businesses, like KiK, are comfortable with using token sales which may indicate others might follow.
Moreover, the eth based token sale by KiK is the first time ever an established business is to launch an ICO through the ethereum blockchain in what may be the start of mainstream consideration for the token sale option by established businesses and new start-ups as an alternative to IPOs, VCs or advertising.
Somewhat more interesting is the language which suggests they see an opportunity here to disrupt incumbents and therefore they are diving in. Here at Trustnodes we recently had an editorial asking if Ethereum and blockchain technology more widely could disrupt the oil of the future: data. It seems KiK may be undertaking an experiment to find out the answer.
On a third level, KiK suggests eth based tokens can create new business models which may act as an alternative to advertising, thus potentially bringing focus once more to serving users rather than just eye balls. Whether that is indeed the case, however, remains to be seen.
But the most interesting part out of all this is that developers, whether based in Silicon Valley or elsewhere, are coming, and they seem to have, once more, returned their ambition towards disruption.