Kin’s 10 trillion supply and the case for ‘Kinnies’

Kin decimals and some valuations

Most of you familiar with Kin will be aware of the total available supply of the Kin crypto currency; 10 trillion — a 1 with a whopping 13 zeroes. This seems a stumbling block for many, as they are typically looking at supplies of other crypto currencies and crypto assets that run several orders of magnitude lower. Let’s explore the difference and hammer out some of the detail as to why the supply requires to be this large.

Pennies ? How about Kinnies? — Photo by Michael Longmire on Unsplash

First off, Kin is not a digital asset as such. Not in the way that Bitcoin has become. Confirmations on BTC transactions are slow, overall supply is low, fees are high and it is not suited for small, frequent and quick micro transactions. Kin is meant to be used for exactly those types of transactions and thus aims to fulfil its role as an actually usable global digital currency, far less a store of value.

Total US dollars in existence, when you ask Google — sourced from howstuffworks.com

What’s so magical about 10 trillion? After some basic Googling, 10.5 trillion USD happens to be the approximation of all the dollars in existence as of 2013. In my opinion, this is in line with Kin’s aim to become a global digital currency. I would hazard a guess that the team will have looked at this approximation of the global US dollar supply and gone:”Ted, that will do for us. Very nicely.”

It’s also worth noting that the physical amount of coins and notes of the US dollar works out to be over 1 trillion. Taking that into account, 10 times that amount for a new, truly global, digital currency does not seem too outlandish.

There have been some comments in the various Kin Telegram channels (mainly the currency channel!) about price and the assumption that the value of Kin will have a ceiling of $ 0.01 per token. The reasoning is that with Kin being a crypto currency suited to micro transactions, any higher value than $ 0.01 would mean for certain micro transactions we might need decimals, which it is claimed is something Kin does not want. I will outline why I think this is wrong on both related counts (the value ceiling and decimals).

Firstly, let’s address the latter point of decimals. Whilst initially the value of 1 Kin is small enough for micro transactions, once Kin is widely used as a global digital currency, and its value rises, there is no reason to not introduce the ‘regular’ two decimals as commonly used in any other currency worldwide. People are used to dealing in currencies down to two decimal places. This is nothing new.

However, what the Kin Foundation will want to avoid is Bitcoin style decimals — I don’t see any scenario where Kin would ever be using more than two decimals, ever. So you would never pay 0.000123 Kin for consuming some content or spend on a digital item.

It is worth noting that as Kin rises in value, we may well see the introduction of something I would like to call ‘Kinnies’ — the equivalent of cents or pennies to 1 Kin; 1 Kin would be 100 Kinnies. This would enable the participants in the Kin ecosystem to earn and spend in Kinnies for certain micro transactions, without the need to resort to actually using the two decimal places by expressing the value in amounts of Kin. Depending on the types of earning or spending — how micro or macro the value of said earn or spend opportunities are, they could automatically adjust to display just Kin or for micro transactions display Kinnies.

Now, onto the point of the ceiling in terms of overall value. At the moment, there are roughly 750 billion Kin tokens in circulation. An arbitrary limit of $ 0.01 puts the maximum market cap of Kin at 7.5 billion. When we look at the amount to be added to that every day once the KRE goes live, after 1 year, we are on a total circulation supply of just under 2 trillion (20% in first year of 60% of 10 trillion = 1.2 trillion + 750 billion = 1.95 trillion). This means even a year after the KRE has launched and all partners have been rewarded (based on contribution to the economy) a total of 1.2 trillion in year one, at a maximum of $ 0.01 per Kin the market cap could still not exceed $19.5 billion. That’s less than Ripple at the moment, and that is in a bear market!

Sorry, but that is laughably conservative. The whole crypto market will only grow more and more. Sure, we need to separate the wheat from the chaff and cull some scammy altcoin projects, of which there are many.

But look at the numbers above, read the Kin white paper and realise that the first few big partners will scoop up an enormous amount of Kin (1.2 trillion!) in the first year. This will attract big partners and at the same time grow the number of contributing users significantly, which in turn will drive the price of Kin upwards.

On the basis of some of these figures, I would predict that one year after the KRE rollout, we will be looking at a value of more than $0.01.

Now of course, that’s just my two Kinnies.