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What Critics Fail to Understand About Kin – Part #5

Missed the rest of the series? Check out “Part #1” “Part #2“, “Part #3” and “Part #4

When I first started this series critique number 5 was “The Kin team hasn’t done anything since the ICO.” A lot has happened since then, including the launch of the Kinit app, and so we’ve heard less and less of this critique over time.

Instead, a new negative narrative has surfaced that we’re going to combat, one that I call “the two blockchain problem.”

It seems whenever Kin related news gets shared around cryptocurrency communities we consistently hear:

Kin can’t decide which blockchain they’re on.

Kin keeps flip-flopping on blockchains.

There are two subtle points that people are misinterpreting here, that we should clear up.

Critique #1 – “Kin Can’t Decide Which Blockchain They’re On!”

At first, when I heard users complaining about this decision, I thought it was in reference to the migration from the Ethereum blockchain to the Stellar blockchain, and then to their own Kin blockchain. However, after taking the time to have in-depth discussions with these users, I’ve realized instead they are (surprisingly) upset that Kin is a token that lives on two blockchains.

While cross-chain projects like ChainLink and Bitcoin-to-Ethereum Atomic Swaps have been celebrated, people seem to think that Kin’s chain-duality is a negative, rather than a positive.

The Case for Two Blockchains

Ethereum Scaling

When Kin first launched, they were focused on the Ethereum blockchain, as most new ICOs and blockchain projects from 2017/18 were.

At the time, Ethereum was yet to face some of the platform’s worst scaling challenges, such as the CryptoKitties craze, and the upper bounds of Ethereum’s transactions-per-second capacity had been mostly untested.

Shortly after Kin’s launch, the Ethereum network was hammered by the launch of CryptoKitties. Seeing how few transactions were needed to clog the Ethereum network, Kin realized that they could not possibly implement their project on Ethereum blockchain in the short term.

They even went as far as to calculate what would happen if Kin were to ‘airdrop’ a little bit of Kin to each Kik user, and realized that if they did this, they would take down the Ethereum network for days.

Rock and a Hard Place

At this point the Kin Foundation knew they had to explore other options, including their own blockchain.

The challenge became that moving to your own blockchain means:

  • Losing out on existing Ethereum infrastructure like web wallets, hardware wallets and decentralized exchanges.
  • Exchanges have less incentive to list your coin, as they now have to run a node of your blockchain rather than just add a smart contract token.
  • Increased overhead, as you now need to create your own software wallets and node tools.
  • Decreased security at the initial launch of the network, as you lose access to Ethereum’s global network of validators.
  • Decreased liquidity for investors, as they can no longer easily move tokens within the Ethereum network.

We’ve seen examples of these challenges faced by other popular projects. Consider RavenCoin, a mine-able community token that launched around the same time as Kin. They’ve faced a tremendous uphill battle with their token, and even though they have a large and highly involved community, they are only listed on a few small unknown markets, have a market cap of only $39M and get less than $600k/day in daily turn over. Beyond that, a significant portion of the developer’s time is spent upgrading and maintaining software wallets, which takes away resources from their main vision.

The Decision

The Kin Foundation, realizing that they didn’t want to put their users in that position, decided to do something new. They decided that they would continue to explore other blockchains while still keeping the Kin token available on the Ethereum network, so that users could take advantage of the existing ecosystem for liquidity.

While this introduced significant confusion, especially in messaging surrounding “KIN1” and “KIN2” (Read: “What the heck are KIN1 and KIN2?“)

Critique #1 – Conclusion & TL;DR

Kin isn’t split between blockchains, and they don’t have two tokens. The Kin Foundation is focused on building the Kin Blockchain, a highly-customized fork of the Stellar blockchain that supports 0-fee transactions and high-rate TPS.

Since Kin knew that moving to their own blockchain might result in reduced liquidity for token holders, they allowed Kin to remain active on the Ethereum blockchain for trading.

Kin is not building tools to support the Kin token being used on the Ethereum blockchain. Their tools are focused on the Kin blockchain, and users will be able to move their tokens over via Atomic Swaps.

Critique #2 – “Kin Keeps Flip-Flopping on Blockchains!”

In recent years, especially in political-spheres, changing your mind has been demonized with the word “flip-flopping.”

Before we get to the Kin Foundation specifically, let’s first clear this up.

  • “Flip-Flopping” is changing your answer to a question, or your position on an issue without substance (or without meaning), primarily to take advantage of a current benefit. (i.e. lying to a crowd for votes).
  • Changing your mind is what happens when you learn new information that disproves your previous position. It is not flip-flopping, it is not bad, it is actually the most healthy thing to do when presented with new information. (In startups this is often called a “pivot.”)

To that end, the Kin Foundation has never once “flip-flopped” on which blockchain they are going to use. Instead, they’ve learned new information as time went on and changed their minds.

Leaving Ethereum

As we mentioned earlier, Kin’s decision to leave Ethereum was based on challenges around scalability.

The inability for the Ethereum blockchain to scale to the level that Kin needed for integration into their own Kik app, let alone into multiple enterprise partner apps, meant that they simply couldn’t complete their vision on the Ethereum blockchain.

While Ethereum is rapidly moving towards scaling solutions, even optimistic estimates put these as being implemented sometime in 2020, which would delay Kin’s timeline far too long.

This initially lead to Kin exploring Stellar.

Aside: Ethereum Vs Kin

It’s worth noting, that many have argued that if Ethereum won’t have scaling before 2020 then there is no way Kin will be able to create their own blockchain that will have scale.

The important distinction here is that Ethereum is trying to create a scaling system on a live blockchain, while managing a number of existing features, none of which were designed for this scaling system.

Kin, on the other hand is trying to implement scaling by building a blockchain of their own, and only having the features they want/need within it. They are two very different products, with different challenges.

Leaving Stellar

After leaving the Ethereum blockchain, the Kin Foundation began to explore Stellar’s blockchain as an alternative, due to its focus on high scalability and low cost fees. Stellar achieves those goals by using a more efficient consensus model and removing the overhead of a “Turing Complete” smart contract language, like Ethereum has.

While Stellar proved to be advantageous from an underlying technology perspective, it introduced a unique set of challenges in terms of user experience.

To create a new wallet on Stellar, a user must first fund the wallet with at least 1 Lumen (Stellar – XLM), and whenever they send a transaction the user must burn 100 Stroops (0.0000001 of a Lumen).

This meant that in order to use Kin, users would first need to purchase and load their wallets with Stellar, and make sure they have a balance of Stellar in their wallet at all times in order to make transactions.

Since most users would be using Kin via third-party apps, they wouldn’t be aware of background processes like this, and certainly wouldn’t be familiar with how to use exchanges to purchase Stellar and load it into their wallet.

This would drastically increase either the financial load on developers (requiring them to spend around $0.50 for each new account activation) or increase the education friction on new users. Either of these options would ultimately lead to less adoption in the Kin ecosystem.

This finally led the Kin team to decide they needed to pursue their own blockchain.

The Kin Blockchain

Kin obviously wanted to avoid making their own blockchain to start, as building a blockchain from the ground up is a tremendous cost and comes with its own headaches.

But, given that no other blockchain technology was ready to perform at the scale they needed without sacrificing user experience, the Kin team pivoted and decided to build their own based on a fork of Stellar.

Building their own blockchain comes with a lot of advantages. It will allow them to create the exact infrastructure that they and their partners need without worrying about third-party developers and other complications.

It also means that Kin has the potential to expand beyond their initial ambitions and offer other features in the future including smart contract support (like we learned in their recent Engineering AMA).

Critique #2 – Conclusion & TL;DR

Kin didn’t flip-flop. They learned new information, and pivoted in response.

They had to do this twice. It wasn’t their initial plan to build their own blockchain, but, now they are doubling-down on that, and this brings a lot of benefits.

They aren’t going to be changing their blockchain again.

A Final Note

There has been a lot of fuss about Kin’s journey with multiple different blockchains, especially in the messaging around KIN1 and KIN2. The fact that the Kin Foundation is a blockchain company that is willing to change course when learning new information is a good thing.

Adaptation is key to success in startups. Far too many blockchain projects seem to worry that admitting you were wrong is a point of weakness, and so they cling blindly to their statements. In the end, that will be the downfall for a number of these companies.

If there is one thing Kik has proven they are good at, it is evolving to stay in the fight. For the last decade they’ve had to continually evolve to stay relevant, and that’s something that’s foreign to most blockchain startups.

I personally believe that Kin should go all in on their new blockchain, building it first as a platform for themselves, then supporting other projects that want to live within the ecosystem, because Kik is one of the few companies with the expertise to help deliver on a project at this scale.

Whatever lays ahead for the Kin blockchain, I think it’s clear that their decision to change blockchains was the right choice for them and that many of the critics who disliked that choice were kind of like baseball fans refusing to cheer for anyone other than the home team.

There is a lot that Kin hasn’t done right to date, but, the project has an incredible potential and has shown they have the ability to bring real partners into the fold and help make crypto adoption mainstream – and in the end, that’s why we had to examine “What Critics Fail to Understand about Kin.”

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Adam Cochran

Written by Adam Cochran

Adam is a marketing and product executive with over a decade of experience in growth marketing, product design and information science. He's also consulted for some of the largest blockchain projects and was a key player behind the marketing of Dogecoin in 2014.

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What Critics Fail to Understand About Kin – Part #4

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