Introduction to Kin: Universal Virtual Currency for Apps

A New Revenue Model for App Developers Similar to “Bitcoin Mining”, but Based on User Engagement

Cryptocurrency seems to re-enter public discussion in tandem with fluctuations in exchange rate, but hopes of mass mainstream adoption continue to remain a hopeful vision for the future. Since most consumers are able to transact perfectly well in their local currency, the need for censorship-resistant alternative currency remains niche. Even so, Bitcoin has managed to garner international media attention and fanfare, with names like Elon Musk and Jack Dorsey endorsing the breakthrough financial technology, and even companies like JP Morgan and Facebook looking to take a piece of that international currency market for themselves. All of this has been achieved via the creation of an open payment network in which anyone with a computer can become a worker in exchange for a reward of new Bitcoin. This incentive of receiving a piece of the limited issuance of a currency as it continues to increase in adoption and demand has helped it to become a world-renowned digital asset. In spite of this powerful incentive mechanism, however, estimates still put the number of active Bitcoin wallets under ten million. That means that unless a developer is personally invested, philosophically invested, or both, there is little incentive to integrate the technology into their software today, as there is nothing for them to gain. But what if that concept of allowing people to join a network in exchange for a piece of a limited reward was turned on its head, and the incentive wasn’t being offered for people to verify transactions, but for actually integrating the technology, creating the experiences in which digital transactions are facilitated, and boosting adoption?

Kin —A Complete Digital Economy

Some of the First Consumer Apps / Companies to Adopt Kin

In its simplest form, Kin can be described as software-based currency similar to Farmville Cash, Roblox “Robux”, or Fortnite “V-Bucks”, but meant to work across an entire ecosystem of applications. It is an open currency model which any developer can integrate and be rewarded for doing so. More specifically, Kin is a cryptocurrency, which means they cannot be duplicated and adhere to a certain set of programmed rules, involving a public ledger of accounts known as a blockchain as well as asymmetric encryption for the security of its users. For more information on how Kin compares to other cryptocurrencies, you can read the section below titled Kin as a Cryptocurrency. However, to better describe the use of Kin, I will first be delving into the uses and benefits it provides to each App Users and Developers individually.

For App Users

Much like the previously mentioned digital currencies, users will be able to both earn and purchase Kin in consumer apps that they know and love in order to spend it on digital goods and services through a variety of means within those applications. Unlike those currencies, however, Kin allows users to send their holdings between different applications that have integrated it, even if they were developed or published by unaffiliated companies.

Fred Wilson, Director @ Kik, Director @ Coinbase, Co-Founder of Union Square Ventures, & more

This is facilitated by the technology behind the coin, which borrows elements of the innovations brought by Bitcoin but with less of a focus on censorship-resistance in favor of near-instant and free or very cheap transactions; but users will never have to think about any of that. In fact, most could very well never know they are using a cryptocurrency at all. That is because Kin is inherently user-friendly, by design. Even technical cryptocurrency staples like wallet backup and restore features are here and have been made easy to use so that users can protect the Kin that they choose to keep in their mobile apps.

Wallet Backup and Restore Module in a Kin App

For those looking to securely store larger amounts of Kin, encrypted hardware and software options such as the popular Ledger products are recommended.

Sending Kin from app to app has also been made intuitive and simple, as shown in the most recent iteration of Kinit, a standalone application that is used to test new Kin features for developers as well as give users more ways to earn and spend (Google Play, iOS App Store).

App-to-App Flow Being Tested in Kinit

Users can discover new Kin apps or easily send between their favorites within the ecosystem thanks to tools that cleverly tuck technical processes away into the background in order to keep the experience clean and intuitive. Right now a new way of unifying and connecting wallets across applications is being finalized and soon all apps in the ecosystem will be connected.

As of today, Kin has already been integrated into more than 30 consumer apps with various ways to earn and spend such as Tapatalk, Perfect365, Vent, Rave, Madlipz, Kik, and more; and that number is continuing to grow. For more information about Kin apps, visit https://www.kin.org.

For App Developers

Generating revenue from mobile applications usually necessitates extracting value from your users in such a way that you are rewarded for the value they provide to others. Whether it’s traditional ads, harvesting their data, or charging fees, there has never really been a way to monetize without fundamentally opposing your user experience and inhibiting the free exchange of value between them. Even if you did, the odds of surmounting the monopolistic stranglehold on those competitive markets held by companies like Facebook and Google are slim-to-none. This highlights, among other things, a severe misalignment between users and developers. This is also the product of and contributes further to an uneven playing field in which everyone involved loses except the biggest, most successful corporations.

User Alignment

Now with Kin, developers and users are aligned, because the more users are rewarded for their actions and the more they exchange value with one another in Kin, the more the developer is rewarded too; and the more valuable Kin becomes to users in the process. For example, sponsored “earn Kin“ experiences can function as a more aligned and far more engaging alternative to ads that actually compensate users for their attention, which then also facilitates the distribution and exchange of Kin between users. The developer is then paid in newly circulated Kin in proportion to their user engagement relative to other apps in the ecosystem in a specified time period.

Credit: Will Gikandi, Hussam Zaghal (taken from https://medium.com/@dillontking/the-magic-of-kin-two-scenarios-that-demonstrate-why-kin-will-be-the-most-talked-about-coin-of-6265a74c346c )

All of this is made possible by the “Kin Rewards Engine”, or just KRE for short. The KRE is a way of distributing newly circulated Kin into the economy in a concept modeled after Bitcoin mining. However, instead of miners pointing their resources toward the verification of transactions, in the Kin ecosystem there are app developers. These app developers are incentivized to create new and engaging experiences for their users in exchange for a share of newly distributed Kin. In short, the more demand a developer creates for Kin, the bigger a piece of the limited Kin pie they get.

Thanks to this common incentive platform, app developers are also no longer forced to spar in a zero-sum game in which one must devour the other. For the first time, competing developers can collaborate on the same team by working to make Kin more useful and valuable for everyone else in the ecosystem. By virtue of the protocol, Kin will grow in attractiveness to more users as it becomes integrated into more products and services, which will then in turn bring more developers to create new uses, and so on. More details on the KRE will be released over time as the algorithms and inputs to determine payout are finalized and eventually fully automated.

A shared incentive protocol at the application layer decouples the network from the end-user application. Traditionally, app developers compete for a finite share of user’s time and brand’s ad spend. User experiences underpinned by a token moves the network outside the walled-garden, elevating it to a meta level, where users are empowered to move cross-application. The shared incentive for app developers is to increase the utility of the network, which they are a participant in, not the owner of. — Tanner Philp (https://medium.com/@tanner.philp/the-incentive-protocol-9a948ff7623b )

Kin also naturally lends itself to bolstering app performance metrics, as features that are rewarding and satisfying also promote repetitive behavior. As an example, let’s track a hypothetical user story through Kinny, a social media tip bot created specifically for Kin, as it relates to the AARRR framework for app performance:

AcquisitionDavid the microtask worker has been earning Kin in several apps, and wants more. When he goes to send some hard-earned Kin to another app, he also discovers Kinny the social media tip bot. He downloads it to find even more ways to earn and to use Kin in a new way: tipping an artist on twitter. Thanks to Kin, this app has acquired a new user.

_Activation_In the app, David discovers he can earn larger amounts of Kin when doing tasks that are specific to him. As he completes those tasks he is rewarded with the incentive he was seeking and given a positive emotional impression. I cant wait to earn more Kin tomorrow! he thinks to himself.

RetentionDavid keeps coming back to earn more Kin and complete unique daily tasks, which are intrinsically linked to other features in the app. This is nothing like traditional advertisements, users are excited to engage with these features.

ReferralWhile referral mechanisms in apps are likely to be unique, Kinny has a variety, some of which are baked-in. The tips being sent are displayed for everyone to see on social media, generating curiosity, and the recipient gets a message letting them know they’ve been tipped. Wha? What is Kin? How do I get my tip? Kinny just got another user.

RevenueBy having engaged users, the developer is automatically rewarded in Kin for their transaction contributions in relation to rest of the network. That means that every feature linked to the use of Kin generates revenue without ever having to extract value from the user. Developers are simply incentivized to create new and exciting experiences for their users.

This is just one tiny hyper-specific example of how Kin can boost user engagement in a way that allows users and content creators to be rewarded for the value they create. As time passes and the digital economy develops, even more creative and scientific approaches to user engagement design around Kin will materialize.

Kin lives in a unique space at the crossroads of powerful user incentive, engaging & rewarding alternative to ads, and open virtual currency monetization model. Although still early, the seeds of an ecosystem have already begun to take root. You can find technical documentation on the Kin SDK and other resources here:https://developers.kinecosystem.com

Kin as a Cryptocurrency

As of today, Bitcoin is the most well known cryptocurrency. Kin isn’t Bitcoin. While there is an overlap in some purpose that they each serve as a medium of exchange, the philosophies in their approach are vastly different. Unlike Bitcoin, the payment network that maintains and verifies transactions for Kin is not open for anyone to join. It is a permissioned federation that is much smaller in scale, but which also allows for much faster and cheaper transactions (much like the “Liquid” network for Bitcoin, which was designed as a second layer solution for higher throughput). That also means the Kin Federation is beholden to the law, as the companies operating the network can be easily identified and asked to shut down their nodes, because it is far more centralized by design. As a result of this, however, it is much more possible for Kin to undergo technical changes and upgrades over time, because the federation can more easily come to a consensus to decide to change the rules of what Kin is. Whether that is a good or bad thing depends on your specific needs.

The software development approaches of the two projects are also completely different. Both are open-source (anyone can view, use, and contribute suggestions to published code) but while Bitcoin has no official organization, Kin tools and resources are developed by a registered non-profit organization known as Kin Foundation which operates out of Tel Aviv, Israel, using funds raised in a token sale in 2017. Much like the Ethereum Foundation of a similar name, they have dedicated personnel contributing efforts to and also issue grants in the interest of further developing the ecosystem and creating the best possible tool-kits for developers. To that end, the approach to development is also much more disciplined and organized, closely resembling the iterative design practices of modern software teams by implementing quick feedback loops, user feedback based design, limited blast radius testing, and other agile-design based philosophies.

The Kin codebase is a modified clone of Stellar code. Much like Stellar, Kin has made some trade-offs for more usability over decentralization. In order to create a custom fee system in which white-listed apps pay no fees outside of spam, and to remove the requirement of wallets needing pre-existing balances in order to begin to transact, however, Kin had to branch out into a blockchain all its own.

At times, Kin transactions have already surpassed BTC and ETH with just in-app use

Because of this move to a new blockchain, we were able to catch a glimpse of Kin usage stats without the inclusion of speculative trading and it still consistently managed to have higher transaction volume than Bitcoin or Ethereum, the two top cryptocurrencies by market cap. The Kin blockchain operations do not include computations of turing-complete coding language as the projects above it do, they are pure currency transactions. In other words, just from a few apps integrating and beginning to use Kin, it has already become one of the most used cryptocurrencies in the world. As Kin in its latest form begins to hit exchanges and those transactions also join the metrics of in-app use, it could very well become the most used cryptocurrency.

To follow along with Kin and other crypto stats, visit blocktivity.info (note: as of March 2019 all Kin is being migrated to a new blockchain, and blocktivity may take a while to update to the new data endpoint).

Recently CoinMarketCap , the popular cryptocurrency index website, added a ratings tab powered by a fundamentals analysis platform in which Kin was given an “A” in health, and a number rating that puts it in the top 5 cryptocurrencies when weighted across factors like user activity, developer behavior, market maturity, and more. Kin also consistently places at the top of social media activity among cryptocurrency communities.

Kin Health as per FCAS

While Kin is progressing handily on the software development front, they are also preparing for a potential legal battle with the SEC to dispute the assertion that the token issuance was really an offering of securities, or representations of an investment agreement, and not a currency. Interestingly enough Kin Digital Services did register with FinCEN, not the SEC, as a money services business or ‘MSB’ in order to legally distribute currency or financial instruments as per the advice of legal guidance. All of this has resulted in what could very well be a landmark case in cryptocurrency that might determine the future of the industry in the United States.

More Connected, More Fun, More Fair

Kin is already beginning to be exposed to an order of magnitude more active users than Bitcoin. Will it garner mainstream attention and become the first cryptocurrency to be used by millions of regular people every day (beyond speculative trading)? It is looking like in 2019 we will find out. In an age where everything we do and say is tracked and sold for profit behind our backs, everyone is looking for a better way. If Kin can provide a new way to monetize software without treating users as a product, it could very well change the consumer digital landscape forever, and be the solution we have all been waiting for.

You can find more information as well as sign up for updates on Kin at Kin.org .

**Note: This article was written by an independent developer completely separate from Kin Foundation and Kik Interactive. All views and interpretations expressed in this article are my own. For full disclosure, I have holdings in Kin that were purchased from the secondary market and I am developing an application that features the coin, called “Love & Loud Radio”, which you can read more about here: https://medium.com/love-loud-music/sneak-peek-love-loud-radio-music-discovery-music-promotion-app-ceba10a4d506