Kim Dotcom set to launch an IEO on Bitfinex for a project that will improve the digital content business.
Kim Dotcom, the controversial internet entrepreneur and founder of the now-defunct file storage platform Megaupload, is making a comeback in the digital content business. This time, instead of a platform that allows users to download copyright songs and television series, Dotcom plans to use blockchain technology to create a fair digital content distribution market called K.IM.
According to K.IM’s white paper, the proposed project is pitched as a dynamic ecosystem that is “aimed to become the easiest and the most secure way to generate revenue with digital content.”
The project plans to facilitate consumer and publisher transactions while cutting out the middleman with the help of the Kimcoin. Bitfinex, the cryptocurrency exchange in partnership with Dotcom’s platform, has recently announced the sale of the K.IM with the relaunch of its initial exchange offering (IEO) platform, Toikinex.
The K.IM project has so far raised over $2 million from investors and is planned to be fully operational by the third quarter of 2020, according to the project’s road map. K.IM says it aims to fill up a content monetization gap in a market worth over $400 billion.
According to the project’s white paper, the infiltration of multiple intermediaries in the digital content business has introduced an inability to offer content at ultra-low prices. With a business model that gives 95% of sales revenue to content creators, the K.IM platform will aim to boost monetization while attracting publishers to participate.
Some of the key features of the platform include content pricing and entails the use of a file encryption service. Users will be able to pay for content with a range of cryptocurrencies. However, only Bitcoin (BTC) and K.IM will be available at the start.
K.IM will serve as a utility coin that will allow users to purchase content, donate or tip on the platform. The project’s road map also states that K.IM will be issued in the last quarter of 2019, with a token sale on Bitfinex set to take place on Oct. 22.
While commenting on the project’s development, Dotcom mentioned that “combining the internet with Bitcoin gives a real chance of achieving the original promise of the internet,” defining that promise as freedom of speech, finance and commerce. He also added that his main motivation for launching the platforms is to “cut out all the middlemen and sell content and digital goods without censorship.” In an email conversation, Kim Dotcom told Cointelegraph:
“K.im will work on policies, designs, and technologies that attempt to address the many complex issues of international copyright compliance for user-generated content intermediary services and related risks.”
Dotcom also acknowledged that recent technical breakthroughs such as Bitcoin’s Lightning Network have enabled the creation of tokens such as K.IM that can be supported on Bitcoin’s blockchain network.
Will Megaupload cast a dark shadow on K.IM?
Far from the noble intentions of giving users freedom and access to digital goods, Dotcom’s alleged reputation of making millions of dollars by allowing illegal file sharing on Megaupload still casts a shadow on his new project.
For some, it is a little surprising that a defunct platform whose founder has been locked in a legal battle with the United States over copyright claims is now spearheading a project that will create a fair market for content creators.
In response, Dotcom has replied that the technology the project is built upon allows users to sell their content without K.IM’s knowledge of what content they are selling. Therefore, content publishers will have absolute control of their content with encrypted file protection.
He told Max Keiser from KeiserReport that the platform will implement a content hosting platform with a “decentralized structure,” which will have an API that will enable users to add their servers from anywhere across the globe. Dotcom also added that the platform will “allow users to report” anything illegal on the platforms as a community policing strategy.
IEOs as the new ICOs
By definition, an IEO entails the partnership between a project and an exchange to sell the project’s tokens through the exchange. IEOs are touted as a less risky alternative to initial coin offerings (ICOs). While an ICO involves the selling of a project’s tokens directly to the buyer, IEO tokens undergo a vetting process that gives purchasers more confidence.
Also, projects such as K.IM can outsource their marketing as well as Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance to the exchange platform. This makes it easy for project managers to navigate through various regulatory requirements.
For this reason, the K.IM project has partnered with Bitfinex in what Dotcom calls “the perfect partner to help distribute the KIM tokens.”
Given that 75% of IEO tokens have reportedly lost more than 50% of their value, how will Dotcom’s project differentiate its value proposition for a successful token sale? Dotcom told Cointelegraph, “a token sale using Bitfinex was an easy choice.” He added,
“We want to distribute our token as widely as possible amongst the bitcoin community for first and early use of the platform.”
Exploring the niche
With the increase of censorship from existing content distribution platforms, there is arguably a market for a decentralized and neutral platform like K.IM that will increase going forward. The K.IM ecosystem can revolutionize the digital content industry with improved monetization that benefits creators as well as consumers.
This can all be achieved while promoting freedom of speech — that is, if the project delivers the promises outlined in its white paper. Furthermore, Dotcom confirmed to Cointelegraph that:
“The token piggybacks off cutting edge open-source technology such as the Bitcoin lightning network and its future integration with liquid tokens. In a nutshell, the token aims to allow for fast, cheap and virtually free micropayments for artists and content creators through the K.im platform.”
Despite the noble intentions of the project and the choice to go the IEO way, certain drawbacks might trigger concern over the project’s success. For example, Bitfinex has been hacked on several occasions. The first instance in 2015 led to a loss of more than 1,500 Bitcoins, and a year later, nearly 120,000 Bitcoins were stolen from the exchange.
This year, the exchange has been criticized over its affiliation with Tether in possible cover-up of over $850 million in lost crypto. In addition to Dotcom’s past controversies, the legal issues associated with Bitfinex could affect K.IM’s success.
For now, however, it remains to be seen whether K.IM will be successful in delivering the promise of the internet through the blockchain.