Kik, the popular mobile messaging app with millions of users has announced that it will be moving away from Ethereum for its Kin token. Citing concerns that Ethereum won’t be able to scale sufficiently or quickly enough, the company CEO Ted Livingston stated in a live YouTube stream. The company plans to move its Kin token to Stellar, instead.
Kik and Kin
Launch in 2010, the Canadian Kik app has quickly become a dominant force in the mobile social media space. Especially popular with teens, Kik has quickly seen growing adoption globally and now has a unique opportunity include cryptocurrency in its offerings.
The company previously ran a program called Kik points but is now pursuing a decentralized token called Kin. The tokens will be used to pay for in-app services and purchases.
According to the Kin whitepaper, the token was designed to be an ERC-20 compliant Ethereum token.
Pulling out of Ether
In the live question and answer session that CEO Livingston did on Youtube on Wednesday, the CEO noted that Ethereum was far too slow, inefficient, and expensive to operate on. Transaction fees, in particular, were a prime complaint about the platform.
Since the Kik ICO in September, the company has been mulling the idea of pulling out of Ethereum altogether since as early as October. Coindesk quoted Kik’s blockchain engineering lead Leonid Beder as saying:
Since we first and foremost want the Kin ecosystem to scale to many participants and huge transaction volumes sooner rather than later, we realize that ethereum might not be the right solution
These contemplations on moving have finally born fruit, as the announcement from the CEO seems to have solidified the company’s decision publically.
Stellar is a blockchain project that offers “open-source, distributed payments infrastructure” that supports moving money “quickly, reliably, and for a fraction of a penny.” according to its official website.
Stellar appeared in the news recently as IBM announced a partnership with the platform to facilitate cross-border payments, alongside KlickEx.
Stellar’s native cryptocurrency, the Lumen, operates on a number of principles that are vastly different from other blockchain projects like Bitcoin and Ethereum. Lumens are not a mined currency, but instead, operate on what the company calls a “consensus algorithm”. This algorithm allows for transactions to confirm in seconds, instead of minutes or hours. The supply of Lumens is theoretically unlimited, with a fixed supply increase of 1% per year built into the system.
Transaction fees for the Stellar network are measured as 100 stroops (0.00001 Lumens), and the transaction fee is permanently burned (removed from circulation forever). Stellar tokens today are valued at $0.19 each. So, a transaction fee would be worth about $0.0000019. This is in comparison to Ethereum transaction fees, which are typically in excess of $0.10 USD equivalent.
A large project like Kik and Kin stepping away from Ethereum and instead moving towards Stellar could signal other large projects to follow suit. Perhaps not to Stellar, but at least to send the signal that other major blockchain projects could be better suited for carrying a DAPP or token instead of Ethereum.
Featured Image via Vocativ.com