Kik debuts digital currency amid the boom in bitcoin

Messaging app Kik Interactive is the latest and potentially most well-established company to delve into a quirky new form of fundraising — creating its own digital currency.

Kik, from Waterloo, Ontario, unveiled plans for an initial coin offering, a process by which it sells tokens that can be used to buy services it has available. The idea is that as more people use Kik, the value of those tokens, called Kin, will rise in value.

Interest in coin offerings is high, thanks to surging prices of bitcoin and other virtual currencies.

These offerings give a wide range of people the chance to invest in a company or other endeavor early on. While unregulated, they have proved popular, with investors spending around $330 million on tokens over the past year, according to data compiled by cryptocurrency blog the Control. This month, cloud-storage startup Storj raised almost $30 million in five days.

Kik, which has raised about $120 million (in real money) from investors including Tencent

Holdings, could serve to add a layer of legitimacy to the process.

“Kik will be the largest install base of cryptocurrency users in the world,” CEO Ted Livingston said. “Kin, on day one, will be the most-used cryptocurrency in the world.”

The move comes as Kik finally reveals how many people actually use its app regularly each month: 15 million.

That’s a far cry from the 300 million total registered users number it was sharing around this time last year.

Kik has traditionally been most popular among teens because, unlike Facebook’s Messenger or WhatsApp, they don’t need a phone number to use it.

Growth has been tough in the past few years, though, as teenagers get smartphones earlier and Kik users switch to Facebook apps once they leave high school.

Kik plans to gift a certain amount of Kin to each user. They’ll be able use the currency to buy games, live video streams and other digital products. The company’s goal is to attract merchants who will sell through it, creating a snowball effect where Kin becomes more valuable and more sellers pile onto Kik, increasing its popularity.

“We will create an economy where millions and millions of mainstream consumers are earning in a cryptocurrency for the first time ever,’’ Livingston said. “They’re going to want to spend in that same cryptocurrency as well.’’