Kik, the Waterloo-based social messaging service, jolted the FinTech and social media worlds Thursday by announcing the launch of its own cryptocurrency.
“Kin,” as it’s called, is built on the Ethereum blockchain and is to be embedded in the Kik messaging app. The company hopes the payment system will underpin “a new ecosystem of digital services,” Kik CEO Ted Livingston wrote in a blog post Thursday.
The currency will become the default payment system for in-app purchases. It will also, Livingston hopes, “become one of thousands of services in the Kin ecosystem.
“It will be an ecosystem in which developers link arms to compete with the giants together, building a better future for society while also making money.”
Kik says it will roll out a Kin rewards system that will provide incentive for developers to create added services delivered within the Kin ecosystem. The company will additionally create a foundation to “oversee this entire ecosystem and make sure that it is fair and democratic.”
In April, Livingston said a payment system was the missing piece of the company’s chatbot strategy. The addition of a cryptocurrency would appear to be that missing piece.
The currency, Livingston wrote Thursday, is central to the company’s intention to take on Internet behemoths like Facebook and Google.
“As the giants continue to consolidate power, consumers will have fewer choices and face higher costs to switch to other services,” Livingston said in his blog post. “These forces could lead to a future of less choice, less innovation, and ultimately, less freedom. We need a better solution.”
Cryptocurrency began to gain popular traction about half a dozen years ago with the advent of Bitcoin, a peer-to-peer payment system. Blockchain, the underlying technology of cryptocurrency, has generated increasing momentum recently as a way for companies to achieve a fast, verified transfer of value.
“We believe cryptocurrency is the next important business model innovation in tech and Kik will be the first mainstream application to integrate a cryptocurrency,” wrote New York-based venture capitalist and Kik investor Fred Wilson in his own blog post Thursday.
“This could be a watershed moment for the blockchain sector.”
Livingston has said in the recent past that he wants Kik to become the WeChat of the West. WeChat is a messaging, e-commerce and payment app developed by Tencent, the Chinese holding company that made a $50-million investment in Kik in 2015. WeChat Pay is a digital wallet integrated into the WeChat app. WeChat also makes heavy use of chatbots, something Livingston has said he also wants to incorporate into Kik.