Kin’s 2% secret sauce

What Ted doesn’t tell you — yet

In Ted Livingston’s latest AMA, he alluded to the 2% of detail that the Kin team keep from the public eye for obvious reasons of not giving their hand away too soon, only to be pipped to the post by the ever so grubby, money grabbing, pillaging monoliths like Facebook or Google at the final hurdle.

Not so secret sauce — Photo by Peter Secan on Unsplash

I’m going to have a stab at one of the missing puzzle pieces that currently has not been widely mentioned and in my opinion could well form a significant part of this crucial missing 2%.

Let’s take a quick step back and zoom out.

Many investors are understandably struggling with the concept of valuing Kin. This results in discussions on the Telegram channels, Reddit forums and AMA questions that go along the lines of:”How will the value of Kin be determined and adjusted for a $10 Amazon card?”.

Up and up by kazuend on Unsplash

As Ted has pointed out, the Kin Foundation doesn’t want Kin pegged to the dollar or any other currency. It is a currency in its own right. Period.

I went through the currency change back in The Netherlands, transitioning from Dutch Guilders to Euros. Whilst initially one would change Euro prices back to guilders to appreciate its value, within a few months and less than a year, this kind of on-the-fly conversion became unnecessary. Why? Because we had become used to knowing what the value of one Euro was.

And that is exactly what the Kin Foundation is after. For Kin to be a currency all on its own, to earn and spend as one likes. Now, that’s all very noble, but it is the limitation of initial spending opportunities where this runs into problems.

We know that for an — initial transitional — period, the spendable items will be gift cards that will have a value that can be expressed in ‘real’ currency, and redeemed as such. Hence the $ 10 Amazon card, the $9.99 Spotify sub and the $ 5 Dunkin’ Donuts voucher.

Once more and more apps and partners are on-boarded, the price will naturally stabilise and we can do away with dollar values on gift cards and other spendable items altogether. Let’s just have an Amazon voucher for 500 Kin. You can see where that’s going…

The one thing that is missing is a merchant that takes native Kin amounts as payment! In order for that to happen, Kin needs to be speaking to and teaming up with well established payment gateways like PayPal, Amazon Pay, Stripe and other big players in the Payment Service Provider space. I would be surprised if this is not already happening behind closed doors. Union Square Ventures’ broad portfolio is likely to come in handy here. (Note that Stripe is part of the USV portfolio.)

Real currency or inflation station? by Pepi Stojanovski on Unsplash

Only when that happens, Kin will be a fully fledged currency in its own right. By then, you don’t need Fiat gates, you will have Forex pairs to trade Kin to and from, not that Kin holders will need those, as at that stage there will be plenty of payment providers taking Kin as an acceptable currency, you might even be able to buy real estate and other tangible assets just as easily as you can buy them now with US dollars.