Kin Foundation, responsible for the development of Kin – Kik’s own ERC-20 token, – again decided to make changes to the architecture of the project. After news of the transfer of tokens to a two-chain network (consisting of Ethereum and Stellar blockchains), Kin announced today the forthcoming Stellar fork. As a result, the organization will get its own blockchain.
The mentioned transition to the dual-circuit system was planned due to high transaction fees and Ethereum load. But even a relatively low commission for transfers of Stellar was too high for Kin.
But the main problem is that the Stellar blockchain processes only operational fees paid in its “native” cryptocurrency – lumens (XLM). With its own network, Kin’s traffic would be free.
For Kik, this would be a big step towards their goal – creating a more efficient, seamless online infrastructure for micropayments. Kik’s management believes that implementing this idea will lead to an increase in the online services market, which support the exchange of inexpensive content between users: personalized snapshots, digital gifts (stickers or gif images) or invitations to private chat rooms.
In a comment by Coindesk CEO Kik Ted Livingston (Ted Livingston) said:
“I think that Kin is unique in that it is a product that moves technology forward and not vice versa.”
As an additional incentive for entrepreneurs, Kik developed the Kin Rewards Engine (KRE), an automatic reward system for businesses involved in creating economic activity on the Kin blockchain. Payments – of course, in native tokens – will be made every day in accordance with the share of transactions generated.
However, this does not mean full remove of Ethereum from the scene. When a network member decides that he wants to retain some of his Kin stock, it can be transferred to Ethereum. Whenever a token on Kin’s locker falls into a wallet, the Etereum “clone” is blocked in a smart contract. The process will provide the duplication of tokens (each Kin unit will have a “clone” on the second chain) and the technology of atomic swaps is the p2p exchange of one cryptocurrency for another.
An indicative plan is known, but Livingstone refuses to mention any specific dates. However, he confirmed that Kin is already working on his own code.
Cheapness of decentralization
Livingston is confident in the success of Stellar, but admits that the network does not quite fit the needs of Kin. “It’s not about the amount of fees, but the fact that this would create a high risk of fraud,” he said.
Initially, the company thought that it could allocate subsidies to pay transactional fees, but the developers soon realized that for this they will have to enumerate XLM massively into users’ wallets. Subsequently, unscrupulous network participants could create a lot of wallets to accumulate a stock of lumens, sufficient to provide influence within the network.
So, Kin Foundation managed to create a blockless account, working at the expense of trusted verification nodes. And here lies another difference between Kin and Stellar, which, according to Livingston, is in “the people who run these nodes.”
The first such site will be owned by the Kin Foundation. However, each of the partners of the organization, among other things, will also have to take over the management of the node. And although initially control will be in the hands of Kin, eventually this imbalance in decision making will disappear, since all nodes have equal status.
Unlike Stellar, Kin will not additionally pay partners for the verification of transactions – otherwise they would have to impose fees. But Livingston is confident that in future the nodes will be run by large companies supporting the kin economy and receiving substantial rewards from KRE. As a consequence, they will be directly interested in increasing the value of kin and will place nodes voluntarily.
“As more and more digital services join the project, as the Kin ecosystem and the consumer base grow, other people will also be increasingly motivated to host sites.”
This network structure confirms the forecasts of some analysts – including Spencer Bogart (Blockchain Capital), – future trends in the industry. Bogart fears that such networks will not be able to become innovative blockchain systems and eventually become copies of the centralized structures that exist today.
But Livingston does not agree with him. In his view, the key difference is that there is no third-party guarantee of trust.
“If [in the future] it becomes a mass payment for billions of people in thousands of virtual communities, it is necessary to make it work without intermediaries,” he added, assuring the community that no network participant will have access to means of clients.
Shot in the leg
And yet, with such a network organization, the meaning of the very existence of crypto-currencies – the resistance of any kind of censorship – is jeopardized.
For example, if the Kin token stayed on the Stellar detachment, the verification and direct use of the asset would be the responsibility of the various participants. The validators would be engaged in the security of the chain, and the developers of the services using Kin would pay the validators a commission for using it. But in the final architecture of Kin, both functions are entrusted to large corporations – partners of the Kin Foundation.
Speaking in the analogy, imagine: the main nodes – companies like Etsy, Ebay or Vimeo, that encourage people to spend money on their sites – can collectively decide to block transactions on a certain page, acting on their own interests or the perceived interests of consumers.
What is the probability that the Stellar sites, supported for the most part by unknown online services, will succumb to public pressure from a group of companies with big names and a huge consumer base that decided to establish a market dictatorship?
Since such a situation is likely, the cryptosystem community primarily wants to avoid this by using decentralized network protocols.
Livingston is trying to solve this issue, but he insists that Kin’s blockchain is not necessarily a negative exception.
“The question is not so much how bad everything is in this world. As members of the global community, we will all come to this sooner or later. The question concerns the concentration of power. Can Kin [Foundation] become that single source of power within the kin network? We would like the answer to be “no”. “
Management, continued Livingstone – this is one of the most discussed topics in the cryptocurrency industry, and the development team of Kin carefully ponders all the problems associated with it.
“I think, from the technical side, the most amazing thing about Kin is that we practically overstepped the advanced solutions to these difficulties in the detachment and are now leading the industry behind them.”