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VK Coin: Russian Facebook VKontakte introduces its own crypto

VK CoinAccording to a report published by Tass, a Russian local news outlet on the 1st of April, Russia’s leading social media network company has just launched their own altcoin, dubbed VK Coin. With over 97 million monthly visits, VKontakte, the Russian alternative to Facebook, is undeniably the most visited social network in the country. The Russian social media leader is however open to the world and supports over 80 languages, including several Asian languages as well as English and Arabic. The website even ranks 16th in the most visited websites on a global level.

Founded in 2007 by Pavel Durov, VKontakte is now primarily controlled by investors and corporations which cooperate with the Russian government after Durov refused to shut down several pages dedicated to activist groups in Russia. In 2014, he was dismissed from his position as CEO and fled to the US where he went on to create Telegram, an encrypted chat app which complicates the task of governments who wish to spy on people. The messaging company Telegram has also reportedly raised a further $850 million in an attempt at launching their cryptocurrency, the Telegram Open Network (TON).

It therefore comes as no surprise that with their VK Coin VKontakte is among the ever-increasing list of social media firms who are working on introducing their own cryptocurrency. The latter notably includes Facebook who plans on releasing an altcoin of their own by the end of 2019. Rumour has it Signals, a cross platform encrypted messaging service followed by some of the largest messaging applications in Japan and South Korea, Line and Kakao are also working on a crypto of their own.

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How is VK Coin VKontakte different from other altcoins?

First and foremost, is it noteworthy that the token VK Coin was mineable following its launch. The VK Coin service functions via the app version of VKontakte, a service which is available in both the iOS and the Android version of the application. This crypto is however not based on blockchain technology. In fact, an in app-game allows users to earn VK Coins by clicking a button. This process closely resembles that found in mining games. When they actively play the game, users generate 0.001 VK Coin VKontakte every time they click on the button. When earned, each and every VK Coin can be shared or gifted among players and also allows one to make in-app purchases for features such as “accelerators” which speed up the mining process. Simply creating an account generates 0.001 VK Coin! Yet mining was jus one stage of this project, which was closed on the 11th April 2019 for it had taken just 10 days for 2.8 trillion coins of this cryptocurrency to be generated by its users. In some instances, over 11 million people were mining the coin simultaneously through the app.

Secondly, it has been announced by VKontakte that mining was only the first stage of the project. The mining app now serves as a virtual wallet which allows players to make use of their tokens on VK Pay, the internal payment service of the social networking platform launched in 2018. This cashless money transfer services allows VK users to send money to each other via messages with the use of a credit or debit card. Token VK Coin holders will soon be able to spend their coins on promotional codes, bonuses, advertisement and third-party services through the VK Coin VKontakte “store” which came out on April 4th. Moreover, according to an article published by local news outlet RNS on March 28th, the coins can also be converted to fiat currency via VK Pay. It has also been reported by the platform that a user has earned some 890 million coins since this crypto has been released.

Is VK Coin an interesting investment?

According to VKontakte statistics, over 5 million users log into the VK Coin app on a daily basis. Coinlib may have listed it at the exchange rate of $ 0.000200 yet more than 2.8 trillion Coins are in circulation, and the richest player in their TOP currently owns 47.7 billion Coins. The VK Coin VKontakte is officially presented as just another VK App, however within just weeks following the release of the cryptocurrency VK Coin, over 10 million users are already using it, which just goes to show how much of a success the project has been. As a matter of fact, users have even created their own full-time black market where people buy and sell VK Coins which they then exchange for rubles and vice versa. As Ivan Gusev, head of VK Coin said in an interview with Decrypt, “Since day one, VK Coin was a game where the users dictated the course of events. They banded together in teams, built an economy around VK Coin and its own community.” Teenagers have reportedly began using VK Coins among themselves to purchase things in real life, such as homework, lunch or even a ride. The very fact that VK Coin has expanded outside of VKontakte’s ecosystem demonstrates how much of an appeal it may have for traders.

As opposed to being alarmed by the creation of this black market, the group actually regards it as an achievement and are surprised by the course of events which have taken place since the launch of the crypto VK Coin. They have stated they shall not stop the coin exchange, for sending and receiving VK Coin tokens is “a form of a contract between two individuals”. Furthermore, the company even plans on opening up their API for third parties to integrate the Altcoin VK Coin as a payment method in their apps and website and already allow users to buy promotional codes from VKontakte partners such as Vsemayki.ru and Delivery Club Russia. The firm now wants to “allow users the freedom to determine the value of the virtual currency on their own” said Gusev, which further confirms this token may be an interesting addition to one’s cryptocurrency wallet. Needless to say the Altcoin VK Coin represents serious competition for the rumoured Facebook “stablecoin”.

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