Live from TechCrunch – Kik to launch its own cryptocurrency KIN

ICO stands for initial coin offering. As cryptocurrencies such as Bitcoin continue to gain popularity and see their pricing surge, more and more are turning to ICO as a mean to fundraise. Messaging app Kik is the latest and most well-known company to offer ICO, after receiving a US$ 50 million investment from Tencent in 2015. The deal valued the messaging app at US$ 1 billion at the time.

Speaking to Jon Russell from TechCrunch on stage at TechCrunch Shenzhen, Kik CEO Ted Livingston explained the impetus behind the ICO and what he sees as the future for Kik’s cryptocurrency.

Jon Russell: What actually is an ICO?

Ted Livingston: So ICO, initial coin offering, is what we call a token distribution. It’s a fundamentally new way to monetize.

At the most basic level, it’s a way to raise funding. It’s a way of commanding money into a company.

Jon Russell: Does that mean, you’re fundraising using this form because you can’t get money from investors?

Ted Livingston: No, we’ve actually raised US$ 120 million from investors over the years. For us, it’s been very hard to monetize in the western world. I mean there are these big companies that have huge scale to do a lot of monetization through advertisement. We don’t have the scale or the data to compete with them for that.

Jon Russell: So like Facebook maybe?

Ted Livingston: Yeah. So in our current system, instead of giving you a community to try to sell that to advertisers, instead of giving you a community to try and sell virtual or physical goods, what if we instead built a community to bring people together to provide value to each other? So maybe as a customer on Kik, you could get paid for hosting a great group chat, then you could pay to join that group chat. You could create and sell stickers.

We could turn Kik into an economy. If we could do that, we could base it on a cryptocurrency, by setting aside a cryptocurrency for ourselves as the value of that group.

Jon Russell: That sounds good. How do I get into that ICO?

Ted Livingston: So we’re going to sell 10% of a cryptocurrency called KIN, [representing] the ideas of fellowship and family put together. We’re going to use Kik to launch it. But one day we want it to expand beyond Kik, to tens of thousands of other services.

We’re going to sell 10% of all the KIN that’ll ever exist later this summer. [There’ll also be] a public co-distribution.

Jon Russell: How much are you trying to raise? What’s the target?

Ted Livingston: We’re going to announce that later in the summer. I think the key priority is what is the right amount of money? By creating this new cryptocurrency that can integrate into Kik, a service with millions and millions of monthly active users, [it could] be the most used currency in the world. People are really excited about this. People are saying “I want to buy a bunch of KIN because it’s the most used cryptocurrency in the world”.

But we really want to make sure we’re being responsible, we’re not being greedy.

Jon Russell: At what point does this idea come to you?

Ted Livingston: Since 2011, when we saw Bitcoin and we realized that for the first time, there’s technology that could guarantee the scarcity of digital assets. You could also guarantee that once it was created, there will never be any more of it. So we realized wow, this could be a new way to monetize the business.

So we wanted to see if we could actually make that work. We launched Kik Points in 2014. So with Kik Points, we got millions and millions of people earning Kik Points and [there were] hundreds of thousands, if not millions, of transactions per day, [an average monthly transaction volume] 3 times higher than the global Bitcoin transaction volume.

We’ve also proven to people that [you] could fundraise like Kik.