The Journey of Ted Livingston: From Kik to Code

Ted Livingston's entrepreneurial journey in the tech world spans an impressive 15 years, beginning in January 2009 with the launch of Kik messenger. Under Livingston's leadership, Kik rapidly grew to become one of the most popular messaging apps globally, amassing over 100 million users. The app's success was partly due to its innovative approach, being the first chat app to introduce a native app platform in 2011, followed by a web app platform in 2012, and chat bots in 2014 for the Western market.

Kik's potential caught the attention of Tencent, the makers of WeChat, who invested $50 million at a billion-dollar valuation. Livingston recalls, "They said to us like, listen, we think this is a huge opportunity. And if anybody can do it, it's either you guys are Facebook." This investment set the stage for Kik's ambitious goal to become the "WeChat of the West."

However, the journey wasn't without its challenges. As Livingston and his team worked towards building a WeChat-like ecosystem for the Western market, they encountered a significant hurdle: integrating with various financial systems across multiple countries. Unlike WeChat, which primarily serves the Chinese market, Kik aimed to cater to dozens of countries, each with its unique financial regulations and systems.

The Birth of Kin and the Shift to Crypto

The difficulties in integrating with traditional financial systems led Livingston to explore the potential of cryptocurrency. He saw an opportunity to leverage blockchain technology to create a seamless, global payment system that could bypass the complexities of traditional banking infrastructure. This vision gave birth to Kin, a cryptocurrency designed to power a decentralized ecosystem of digital services.

Livingston explains the rationale behind Kin: "Could we do the same thing with self custodial blockchain technology? You know, now if you could make self custodial work for the average user, then you could roll out an app and you could roll out new features to everybody in the world at once because now you're not a bank. Now the users are on bank."

The journey of Kin, however, was fraught with challenges. Initially built on Ethereum, the project faced technical limitations that made it "absolutely impossible" to scale. This led to multiple blockchain migrations, with Kin reportedly undertaking more blockchain transitions than any other cryptocurrency project.

Regulatory Challenges and the SEC Battle

Kin's journey also involved a significant regulatory battle with the U.S. Securities and Exchange Commission (SEC). Livingston describes this period as "absolutely devastating to the momentum of the cryptocurrency." The SEC lawsuit alleged that Kin's initial coin offering (ICO) constituted an unregistered securities offering.

The regulatory uncertainty had far-reaching consequences. Exchanges were hesitant to list Kin, and developers were cautious about building on the platform. Despite these setbacks, Livingston and his team persevered. They reached a settlement with the SEC, agreeing that while the initial sale of Kin could be considered a securities offering, the cryptocurrency itself would not be classified as a security going forward.

This resolution came at a cost - a $5 million fine - but it allowed Kin to continue operations with regulatory clarity. Livingston views this as a significant achievement, especially in light of ongoing debates about the classification of cryptocurrencies. He notes, "You have the SEC today talking about how all these cryptocurrencies are securities. Like KIN has already passed that test and now can rebuild on the other side."

The Shift to Solana and the Birth of Code

The search for a scalable blockchain solution eventually led Kin to Solana. Livingston recalls, "We finally got on Solana that felt like finally we had the infrastructure we needed, the base L1 chain." This move to Solana marked a turning point for Kin and laid the foundation for Livingston's next venture: Code.

Code represents the culmination of Livingston's vision for a global, user-friendly payment platform built on blockchain technology. For the past three years, Livingston and his team have been developing Code as a payments platform on top of Solana, leveraging the blockchain's high speed and low transaction costs.

Understanding Micropayments: The Untapped Potential

A key focus of Code is on micropayments, an area that Livingston believes represents a significant untapped potential in the cryptocurrency space. He argues that while the concept of micropayments isn't new, previous attempts to implement them have been hindered by technological and economic limitations.

Livingston explains, "The context here is we built this amazing technology and the question is what problem can it solve uniquely that can't be solved by existing payment platforms like Stripe Visa, etc. And so for a whole bunch of reasons, we think the best opportunity is in micro payments."

He points out that despite numerous theories about why micropayments haven't succeeded in the past, the real issue has been the lack of an open payment platform that allows any developer to implement micropayments efficiently. Code aims to fill this gap by offering a platform where transactions as small as five cents to a dollar can be processed with a flat fee of just one penny per payment.

The Unique Value Proposition of Code

Code's approach to micropayments is not just about reducing transaction costs. It's about creating an entirely new paradigm for online transactions. Livingston emphasizes that their goal is not to be marginally better than existing solutions, but to offer something that current financial systems simply cannot do.

He illustrates this point with an example: "Cash doesn't fail. So we needed to be able to queue up transactions. We need to be able to say, okay, Garrett's created 12 words on his device. And so we've submitted a sign of transaction submitted a transaction to create that account, pay the rent on the blockchain. But now he also has a transaction queue up from Ted to give him that $5 of digital paper cash."

This ability to queue transactions and ensure seamless user experiences, even when dealing with blockchain confirmations, sets Code apart from traditional payment systems and many crypto projects.

The Open Source Announcement

In a significant move, Livingston announced during the podcast that Code is going fully open source. This decision encompasses all aspects of the platform, including the iOS and Android apps, the backend systems, and everything in between. Livingston revealed that this amounts to approximately 700,000 lines of code, all of which will be released under the MIT license.

The move to open source is driven by Code's commitment to transparency and the vision laid out by Bitcoin's pseudonymous creator, Satoshi Nakamoto. Livingston explains, "In our journey, you know, we call it to fall through on the vision that Satoshi laid out all those years ago, a purely peer-to-peer version of Electron Cash, we think it's critical that code be open source."

This decision is expected to build trust within the developer community and potentially accelerate the adoption and improvement of the Code platform. By allowing developers to examine, contribute to, and even fork the codebase, Code is positioning itself as a truly community-driven project.

The Technical Intricacies of Code's L2 Solution

One of the most intriguing aspects of Code's technology stack is its Layer 2 (L2) solution built on top of Solana. While Solana is known for its high speed and low transaction costs, Code has implemented additional layers of abstraction to enhance user experience and functionality.

Livingston explains that the need for this L2 solution arose from practical challenges in creating a seamless user experience. For instance, when a new user signs up and receives their first transaction, there's a need to create an account on the blockchain, which can take time. Code's L2 allows for queuing of transactions, ensuring that users can receive funds instantly, even if their account hasn't been fully set up on the blockchain yet.

This L2 solution also enables more complex functionalities, such as enhanced privacy features. Livingston describes a scenario where instead of sending a single, easily traceable transaction, Code can break it down into multiple smaller transactions from different accounts, making it much harder to track individual payments.

He notes, "So now we have one transaction, or sorry, three transactions lattering up into one payment in that analogy. And again, our sequencer lets us schedule all those things and submit them. And then even though we're interacting with smart contracts, we know that you're good for the money."

The Future of Micropayments and Potential Use Cases

Livingston envisions a wide range of potential applications for Code's micropayment system. One of the most promising areas is in online publishing. He points out that many internet users are familiar with the frustration of hitting paywalls when trying to access content. Code's system could allow for seamless, pay-per-article models that benefit both readers and publishers.

"Every consumer in the world has the experience of hitting a paywall and going, 'Ah, how can I get around this? Can I go to the way back machine? Is there any solution? Can you send me a free version?' It's just such a pain. And billions of people around the world know that pain," Livingston explains.

Beyond publishing, Livingston sees potential in various other sectors. For instance, he mentions a developer who is using Code's micropayment system as an anti-spam measure in a social application. By requiring a small payment to create an account, the developer has effectively eliminated spam issues.

The Challenges of Adoption and Go-to-Market Strategy

Despite the potential of micropayments, Livingston acknowledges that adoption remains a significant challenge. He compares the current state of micropayments to the early days of smartphone apps, where the killer applications weren't immediately obvious.

To address this, Code is pursuing a two-pronged strategy. On one hand, they're focusing on clear, obvious applications like online publishing. On the other hand, they're encouraging developers to experiment with new use cases, believing that innovative applications will emerge organically as more people start using the platform.

Livingston emphasizes the importance of working with passionate indie developers rather than immediately pursuing partnerships with large corporations. He believes that these early adopters will help showcase the platform's potential and drive further adoption.

The Relationship Between Code, Kin, and Solana

Throughout the discussion, Livingston emphasizes the symbiotic relationship between Code, the Kin cryptocurrency, and the Solana blockchain. Code serves as the user-friendly interface and development platform, Kin is the medium of exchange, and Solana provides the underlying blockchain infrastructure.

Livingston is particularly bullish on Solana, stating, "I tweeted out yesterday that I think it's only a matter of time where Solana simply replaces Ethereum. I know that's contrarian, but it just feels like it's pretty much done at this point."

He argues that Solana's superior speed and lower transaction costs make it the ideal blockchain for applications like Code. However, he also notes that the recent increase in Solana's price has led to higher operating costs for Code, highlighting the complex economic considerations involved in building on a public blockchain.

The Bitcoin Question: Livingston's Perspective

While much of the discussion focused on Solana and Code, Livingston also shared his thoughts on Bitcoin. He acknowledges Bitcoin's historical importance and its role in inspiring projects like Code. However, he also sees limitations in Bitcoin's current implementation, particularly when it comes to practical, everyday use cases.

Livingston argues, "We think kin is best positioned to replace Bitcoin as that killer medium of exchange. You know, we love Bitcoin. We're super excited that it wants to tell us you build. But right now it's a dead end."

He points out challenges with Bitcoin's Lightning Network, particularly for self-custodial solutions, noting that the economics don't work well for average users due to the high costs of opening and managing payment channels.

The Importance of Open Source in Crypto

The decision to open source Code's entire codebase is a significant move that aligns with the ethos of the cryptocurrency community. Livingston sees this as not just a technical decision, but a philosophical one that speaks to the core values of decentralization and transparency.

By open sourcing Code, Livingston hopes to inspire the same kind of excitement and community involvement that characterized the early days of Bitcoin. He invites developers and enthusiasts to examine the code, contribute to its development, and help build a truly decentralized payment system.

"We think you'll see that just like that early version of Bitcoin, when it got open source, got a bunch of people excited. We think if you look at the open source stuff we've built, you might just get equally excited as well," Livingston enthuses.

The Road Ahead for Code and the Crypto Industry

Looking to the future, Livingston sees 2024 as a pivotal year for both Code and the broader cryptocurrency industry. He believes that as more practical use cases emerge, the focus will shift from speculative narratives to actual utility.

Livingston argues that this shift will benefit projects like Code and Solana, which are focused on delivering real-world value rather than just speculative returns. He sees the potential for a significant realignment in the crypto space, with value flowing towards projects that can demonstrate practical utility and user adoption.

Conclusion: A New Chapter in Crypto Payments

Ted Livingston's journey from Kik to Code represents a microcosm of the broader evolution of the cryptocurrency and blockchain space. Through perseverance in the face of technical, regulatory, and market challenges, Livingston and his team have developed a platform that could potentially revolutionize online payments and content monetization.

The open-sourcing of Code marks a significant milestone in this journey, opening up new possibilities for collaboration and innovation. As the crypto industry continues to mature and seek out real-world applications, projects like Code that focus on solving tangible problems and improving user experiences may well lead the way into the next phase of blockchain adoption.

With its focus on micropayments, its foundation on the high-performance Solana blockchain, and its commitment to open source principles, Code is positioning itself at the intersection of some of the most important trends in the cryptocurrency space. As we move into 2024 and beyond, it will be fascinating to see how Code's vision of seamless, global micropayments unfolds and potentially reshapes our digital economy.

Facts + Figures

• Ted Livingston started his entrepreneurial journey in January 2009, marking nearly 15 years in the tech industry.
• Kik messenger grew to over 100 million users at its peak.
• Tencent invested $50 million in Kik at a billion-dollar valuation.
• Kik was the first chat app to launch a native app platform in 2011, a web app platform in 2012, and chat bots in the Western world in 2014.
• Kin cryptocurrency was launched in 2017, raising $98 million in its token sale.
• Kin has undergone more blockchain migrations than any other cryptocurrency project.
• Code's development team has written approximately 700,000 lines of code, all of which is being open-sourced under the MIT license.
• Code charges a flat fee of one penny per micropayment transaction.
• Code's micropayment system can handle transactions as small as five cents.
• Code's L2 solution on Solana allows for complex payment structuring, including privacy-enhancing features.
• Solana transaction fees are currently 1000 times cheaper than those on Base, Coinbase's L2 solution.
• Each user on Code has eight different accounts on the blockchain for enhanced privacy and functionality.
• Each payment on Code results in roughly 50 transactions on the Solana blockchain.
• The Code app supports over 20 currencies for user interface purposes, while using Kin as the underlying cryptocurrency.
• Livingston predicts that Solana will eventually replace Ethereum as the leading smart contract platform.
• Code is pursuing a two-pronged adoption strategy, focusing on publishing and encouraging indie developers to experiment with new use cases.

Questions Answered

What is Code and how does it differ from other payment platforms?

Code is a global payments platform built on the Solana blockchain that specializes in micropayments. Unlike traditional payment systems or other crypto platforms, Code allows for transactions as small as five cents with a flat fee of just one penny. It uses a Layer 2 solution on top of Solana to provide instant transactions and enhanced privacy features, making it uniquely suited for use cases that require frequent, small payments.

Why is Ted Livingston focusing on micropayments with Code?

Livingston believes micropayments represent an untapped opportunity in the crypto space. He argues that while the concept isn't new, previous attempts have failed due to technological and economic limitations. With Code, built on the high-speed, low-cost Solana blockchain, Livingston sees the potential to enable new business models and use cases that weren't possible before, particularly in areas like content monetization and anti-spam measures.

What prompted Code to go open source?

Code's decision to go open source aligns with the vision of creating a truly decentralized and transparent financial system. Livingston believes that for users to truly control their own money, they should be able to see and verify how the system works. By open sourcing approximately 700,000 lines of code under the MIT license, Code aims to build trust, encourage community contributions, and potentially accelerate adoption and innovation in the micropayments space.

How does Code's use of Kin cryptocurrency differ from stablecoins like USDC?

While many crypto payment platforms use stablecoins like USDC, Code utilizes the Kin cryptocurrency. Livingston argues that stablecoins, while useful, are not "real crypto" as they rely on centralized entities to maintain their peg and can be frozen. Kin, on the other hand, combines the speed of Solana with the decentralization principles of Bitcoin, allowing for a truly peer-to-peer electronic cash system as envisioned by Satoshi Nakamoto.

What challenges has Code faced in terms of regulation?

Code, through its use of the Kin cryptocurrency, has faced significant regulatory challenges. Kin was subject to an SEC lawsuit alleging that its initial coin offering was an unregistered securities offering. However, they reached a settlement where it was agreed that while the initial sale might have been a securities offering, Kin itself is not considered a security going forward. This regulatory clarity has allowed Code and Kin to continue operations and development.

How does Code's Layer 2 solution on Solana work?

Code's Layer 2 solution on Solana allows for queuing and scheduling of transactions, enabling instant user experiences even when blockchain confirmations are pending. It also enables complex payment structuring for enhanced privacy, breaking down larger payments into multiple smaller transactions from different accounts. This system allows Code to provide a seamless user experience while leveraging the speed and low cost of the Solana blockchain.

What is Code's strategy for driving adoption of its micropayments platform?

Code is pursuing a two-pronged adoption strategy. Firstly, they're focusing on clear use cases like online publishing, where micropayments can solve the problem of paywalls. Secondly, they're encouraging indie developers to experiment with the platform, believing that innovative use cases will emerge organically. Livingston emphasizes working with passionate early adopters rather than immediately pursuing partnerships with large corporations.

How does Ted Livingston view the future of Solana in comparison to other blockchains?

Livingston is extremely bullish on Solana, predicting that it will eventually replace Ethereum as the leading smart contract platform. He argues that Solana's superior speed and lower transaction costs make it the ideal blockchain for real-world applications. However, he also notes that the recent increase in Solana's price has led to higher operating costs for projects like Code, highlighting the complex economic considerations involved in building on a public blockchain.

What is Ted Livingston's perspective on Bitcoin and its future?

While acknowledging Bitcoin's historical importance, Livingston sees limitations in its current implementation, particularly for everyday use cases. He argues that solutions like the Lightning Network face economic challenges for average users due to high costs of opening and managing payment channels. Livingston believes that Kin, combined with Code's platform, is better positioned to become the "killer medium of exchange" that Bitcoin originally aspired to be.

How does Code plan to balance the increasing costs of using Solana as its value rises?

As Solana's price increases, it presents both opportunities and challenges for Code. While it may drive more volume and potentially increase the value of Kin, it also increases operational costs. Livingston is in discussions with Solana's founders about ways to reduce fees and account costs. He's open to exploring options like forking Solana or creating a side chain if necessary, but prefers to find solutions that allow Code to remain on the main Solana blockchain.