The Magic of Kin: Two scenarios that demonstrate why Kin will be the most talked about coin of 2018. (Plus: Why the Telegram ICO fears are FUD)
Okay, what makes KIN so special?
The magic of KIN is that developers of other apps and services will be incentivized to implement KIN through the Kin Rewards Engine (pdf). This engine will operate automatically, freely and fairly, having been programmed directly into the KIN token. The Rewards Engine is what truly sets KIN apart from other cryptocurrencies. It rewards contribution and participation in the economy, rather than rewarding people simply for being rich. Other cryptocurrencies reward whoever can afford the most powerful mining machines or whoever owns a large number of coins. Instead, KIN will reward the people who help drive demand and grow the value of the KIN economy.
This economic model has never been attempted before, not even in crypto. Most cryptocurrencies incentivize adoption and growth simply by developing great technology and generating hype. Instead, the KIN model will result in growth via incentivized participation. It will also result in widespread, mainstream adoption by offering other companies explicit rewards for bringing cryptocurrency into their products.
As more providers bring value to the economy, more consumers join the economy, and consumer spending increases. This is perhaps the most important metric of economic growth.
Let me sketch out the flow of how this will work:
Supercell, a mobile gaming company, is looking for a way to get more players to buy their in-game currency, Gems. Supercell sees that if they accept KIN as a form of payment for Gems, they could generate 25% of the KIN economy's total daily transaction volume, meaning they would collect 25% (roughly) of the KIN Rewards Engine payout every day.
Supercell decides it's totally worth implementing KIN, and that they should drive as much KIN transaction volume as possible to increase their KRE payout. So, they begin offering Gems at a 30% discount to players who buy with KIN instead of dollars.
Players who didn't know about KIN are now incentivized to get some, and start using it to get cheaper Gems. They'll download the KIN Standalone Wallet to manage their balance, and find new earn/spend opportunities that they didn't know about. They'll participate in other services to earn KIN so they can buy more Gems.
The KIN economy grows. The service and the client were both incentivized to participate.
Or, another scenario:
Fiverr, a freelance marketplace, sees that if their freelancers accept KIN as payment, they can generate 10% of the KIN economy's total daily transaction volume, meaning they would collect 10% (roughly) of the KIN Rewards Engine payout every day.
Fiverr decides they'll give their freelancers the option of accepting KIN as payment, and that they should drive as much KIN transaction volume as possible to increase their KRE payout. So, they offer freelancers a % cut of their daily KRE reward, paid in KIN.
The freelancers see this as an opportunity to earn extra money on top, so they too want all of their customers to pay with KIN instead of dollars. They offer a 5% discount on their service for people paying with KIN.
Fiverr customers who didn't know about KIN are now incentivized to get some, and start using it to save money on their Fiverr services. They'll download the KIN Standalone Wallet to manage their balance, and find new earn/spend opportunities that they didn't know about. They'll participate in other services to earn KIN so they can buy more Fiverr services.
The freelancers now have the option of keeping the KIN they earned and watching it grow, or cashing out to dollars on an exchange. They will download the KIN Standalone wallet to manage their balance, and find new earn/spend opportunities that they didn't know about. They'll participate in other services to earn even more KIN.
The KIN economy grows. The service, the freelancer, and the client were each incentivized to participate.
KIN will quickly become the most widely used cryptocurrency by mass market users (people who would not otherwise be aware of what cryptocurrency is) when it goes live in the Kik app early in 2018, immediately becoming a core feature for 15 million monthly users.
Please see the whitepapers at kinecosystem.org.
Is Telegram's TON ICO going to kill KIN?
Although both Telegram and Kik are chat apps with millions of monthly users, who are holding ICOs within a year of one another, their blockchain products are very different. They have entirely different technological goals. The two apps also serve very different demographics.
TON is creating its own blockchain and development platform from scratch, aiming to compete with the likes of Ethereum or Stellar. By contrast, KIN is a utility token designed with a simple and unique premise: to create a fair economy of digital goods and services.
TON does not feature anything analogous to KIN's Rewards Engine to incentivize platform adoption.
In fact, through its proposed Proof of Stake algorithm, TON will incentivize holding coins rather than spending them, which most economists would agree is not a great way to grow an economy.
Telegram's user base is bigger but it remains to be seen if their demographic is as easily marketable or as connected to the mainstream as with Kik.
TON ICO investors are buying IOUs. The coins will not actually exist until the end of 2018, and we have no idea how many of the features promised in TON's whitepaper will be production-ready for the block genesis. KIN will be a complete product by the end of Q3.
Some prominent analysts (bias note: Pantera Capital invested in KIN) have expressed skepticism towards TON's technical claims.
Please see these responses, plus a detailed report on the status of development, and more in the newly updated FAQ stickied at the top of the subreddit!
I have published this story on Medium: https://medium.com/@dillontking/the-magic-of-kin-two-scenarios-that-demonstrate-why-kin-will-be-the-most-talked-about-coin-of-6265a74c346c