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Comment by SurrealSoul | Hacker News Reader

At what point does a premium virtual asset become a "currency"

For example, if Clash of Clans has gems that you purchase to purchase items and such inside the application, is that a currency?

'...sells tokens that can be used to buy services on its platform. The idea is that as more and more people use Kik, the value of those tokens, called “Kin”, will rise in value.'

But how is this different than buying premium currency in a free to play game? The "Kin" can only be used inside Kik, how does the value increase?

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Respectfully, I think you and others in this thread defining "Kin" too narrowly by thinking of it exclusively a premium virtual token for use inside of Kik.

Yes, that's obviously the first use-case. But thinking bigger, the combination of anonymous identity / mobile messaging + bona fide cryptocurrency can lead to something way more significant for Kik's users (who are primarily teenagers & pre-teens - people don't have access to credit and find it difficult to participate in the economy).

Assuming some level of mass adoption / easy FX to Bitcoin or traditional currency... Kin could represent a new way in which these users could meaningfully participate economically.

Kin will be tied to their anonymous Kik identity; it's managed through Kik which is always-on always-with-them (smartphone); it's the lingua franca for buying stuff inside of Kik with their friends & fav brands. And if they can eventually use Kin outside of Kik (either directly or via simple FX mechanics) - could be a game-changer.

So from Kik's POV it's definitely worth the extra headaches and effort to try to do this as a cryptocurrency vs. just internal tokens. Worst case, it doesn't really work and they've over-engineered a token system. Best case, they're a major player in the next-gen of cryptocurrencies.

Note: I just came across this: http://avc.com/2017/05/kin/

Much better detail on the what's / how's / why's. Including link to the whitepaper.

This makes much more sense. I thought it was just currency that needed to be exchanged from real USD. You can earn it as a reward. It just might be a game-changer.

"The Kin Rewards Engine is an innovative cryptoeconomic structure intended to promote the use of Kin as a common currency. Through the Kin Rewards Engine, Kin will be introduced into circulation as a daily reward,"

Grow the economic volume every day... Sounds like UBI

Neither you nor the white paper explain why it would lead to mass adoption by players unaffiliated with Kik- it's the biggest assumption here and why its looking like an over-engineered in-app currency. Moreover, Kin as a reward given out by an algorithm... that's controlled by the Kin org? Centralization much?

Can you expand on how it can be used outside of Kik? It seems to me that's the critical step for this to be anything other than "sticker buying" currency.

At this stage ICOs which have a sufficient hype factor have an upward ramp in trading after launch, which attracts a lot of unsophisticated libertarian investors ("suckers"). Kik seem to have decided to get in on this action, as it's sufficiently distinct from plain Ponzi to appear legal.

> At what point does a premium virtual asset become a "currency"

When you can convert it to other currencies i suppose? Apparently thats not the case here, oddly.

Then it's not a (good) currency. Convertibility is an important requirement. Otherwise you don't really have the means to determine its value, and you can't trade it for anything outside. Essentially it would just be circus pizza tokens.

my understanding is Kin is an ERC20 token on the Ethereum network, which would mean they are all convertible. Facilitated by crypto exchanges offering trading pairs. Coinbase just published a good article on Ethereum tokens and seems like they will soon offer them

https://blog.coinbase.com/a-beginners-guide-to-ethereum-toke...

Yep, it's an ERC20 on Ethereum: http://www.coindesk.com/icos-going-mainstream-chat-app-kik-l...

There are several emerging projects for exchanging ERC20 tokens via smart contracts on chain.

There's a similar phenomenon going on in World of Warcraft. Activision/Blizzard allows you to buy with real currency a token equal to a month of subscription playing time that you can then sell on that virtual auction house. Someone in the game then exchanges their in-game currency (gold) for the token, freeing themselves from having to use real money. And the purchaser of the token now has in-game currency. Essentially, time has transferred from one person to anothet--the auction house buyer spent their time to collect the gold, which the original token purchaser traded real life money for. "Time is money, friend."

This is also exactly how EvE Online has worked with PLEX for years now.

That was exactly my thought process. A cryptocurrency only has value if it's seen as valuable in multiple contexts. There's no indication why value would increase externally of Kik for Kin.

Most premium game currencies are untradable between users.

For the few that are, then the difference would be the ability to trade the currency for real world goods or services. Most games explicitly disallow trading in-game currency for real world goods/services where Kik's currency would not just be allowed but encouraged.

IANAL but I imagine their are legal boundaries that come in place the second they become transferable, the second they cross international borders, etc. Personally I would argue the first time they are used to buy drugs has a cultural significance. I wonder where bitcoin would be without the Silkroad.

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