Kik kills its messaging service to focus on crypto
It's one of the messaging apps that's been forgotten in the past few years, but Kik is one of the behemoths in the space that still remains, with 300 million users around the world. Also, it's shutting the service down to focus on greener pastures: cryptocurrency.
Kik is still enormous; it's used by more than 40 percent of US teenagers, and its size is still larger than many newer entrants, like Telegram, which has 200 million active users. Why is Kik shutting down such a successful app to focus on imaginary money, then?
The story started in 2017, when Kik launched one of the most successful Initial Coin Offerings (ICO) of the time, the 'Kin' coin, raising more than $100 million in the sale of tokens, which it promised would build a new financial ecosystem on top of its messaging platform. Users would be able to pay for apps and services in Kin, which would pay developers for building on the platform.
Then the Securities and Exchange commission began an investigation: it alleged that the company had created an illegal securities offering, and sent a series of subpoenas to Kik in the year that followed. The CEO said he was confident that the company would win, despite the odds, because "it would be disastrous for the cryptocurrency industry."
At first, Kik tried to claim it was fighting the noble battle, refusing to settle with the SEC (an often preferred route) and raised money in a crowdfunding round for its legal costs. Evidently, that wasn't enough, so the app is being shut down to exclusively focus on Kin, laying off more than a hundred employees and hunkering down on an expensive, long-running trial instead.
The logic, it seems, is that Kik will shut down in order to cut costs dramatically and help the cryptocurrency survive, but without the network... what's the currency good for? What went wrong? What's telling is this quote from the announcement post: "together we will get millions of people to buy Kin to use it."
So, people bought Kin in the ICO, and now they're a) not using it and b) not buying anymore. It's a chicken-egg problem, compounded by a very expensive upcoming trial, with a company that's unable to raise from investors in its current state.
Shutting down Kik's messaging service, instead of its coin, feels misguided at best, but on the other hand, who's willing to pay for a messaging app, anyway? My read on this is simple: this company will go to trial, squander millions in its defence, and wither as its user base scrambles to get money out before it's too late.
If Kik or Kin exists at all in a year, I'll be surprised. And what of the messaging service? When will it shut down? The company won't say, but you bet that it won't be until they've spammed the living hell out of their users to get them to buy coins, of course.
Google says it's performed the first 'Quantum only' equation
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Facebook acquires a company that helps you control computers with your mind
We're rushing toward the future described in Ender's Game, it seems.
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