Kinesis is Sound Money you can use Today
Kinesis.money is something new – it is a take on Sound Money that is only possible due to the invention of the distributed ledger.
When people think about Sound Money they generally think about currency that is made of precious metals. A $20 gold coin, or pre-1964 coins that contained actual silver. We live in the 21st Century though, and many of our purchases are made online, and even for in-person purchases most people use a credit or debit card for convenience purposes.
Paper currency arose naturally from a desire to protect your savings by depositing it in a bank and receive an IOU (certificate). These certificates where then spent or transferred, since it was more convenient than carrying the gold/silver around. The banks would lend out the gold in return for a yield on your savings. This system was imperfect, especially after the creation of the Federal Reserve, since the gold held by banks would get lent out multiple times creating a systemic risk.
Kinesis is made to fit into this modern era, and can be used as easily online as it can in person. It’s digital sound money that can be spent via a VISA debit card, used for person-to-person payment, spent via Kinesis-specific payment protocols (this site is one of the first in the world to do so,) and will earn a yield while sitting in your account, similar to a savings account. And in contrast to the old paper system, it’s 1:1 with yields paid via transaction fees rather than fractional lending!
How Kinesis Works
Kinesis has two components: the physical precious metals component, and the distributed ledger component. Together these form a modern sound money.
Physical Metal as the Base of Kinesis
Without users, Kinesis is nothing more than a series of empty vaults with some computers running code. Kinesis is the platform that allows the system to work, but all of the assets in the system are owned by the users of the system. Kinesis, like any vaulting service, has a bailee relationship with its users.
The Main points of the tangible side of Kinesis are as follows:
- All metals in the system are owned by the users of the system. Kinesis owns no metal.
- This metal is stored in a dozen vaults across eight countries, in vaults managed by Brink’s, Loomis, or OZL Lichtenstein.
- All precious metals are insured at all times.
- Metals are deliverable to their owner in quantities of 100 grams of gold or 200 ounces of silver at any time – the user just pays $100 plus shipping and insurance. C4SM has tested this and found the total cost above spot for silver was 8.17% to deliver 200 ounces.
- Each unit of metal (either a gram of gold or an ounce of silver) is represented as a digital token on the Kinesis blockchain. All vaults are audited simultaneously twice per year by Bureau Veritas to insure an exact match between physical and the blockchain.
- Kinesis moved its headquarters to Lichtenstein after laws were enacted that recognized the distributed ledger as a way to allocate ownership of assets. Should Kinesis fail as a project, the assets Kinesis secures for us are still ours, and we will be able to take possession from the vaults where our assets are stored.
The Kinesis Blockchain
Distributed Ledger Technology is what made Kinesis possible. The distributed ledger is what transforms Kinesis from a vaulting service to a full-blown digital currency based on sound money principles.
- The blockchain is a fork of the Stellar blockchain that was modified to track physical assets. Stellar was chosen in part because it can handle transactions on the scale that VISA handles, while maintaining a 2-3 second transaction time. Kinesis was designed as a global currency from day one.
- Using a blockchain allows for nearly infinite divisibility of assets. Whereas a $20 gold piece has a melt value of $1,693 today, and a pre-1964 dime now has a melt value of $1.62, Kinesis currencies are divisible into hundred-thousandths. This makes gold and silver practical as day-to-day currencies.
- Kinesis charges transaction fees to fund yields. These fees are enforced by the blockchain automatically. (More on this later.)
- With Kinesis you can transfer your funds to a VISA debit card to spend anywhere that accepts VISA. You can save in gold and silver, and spend it on coffee, parking, oil changes, Amazon purchases, or anything else you use VISA for.
- Kinesis is more secure than cash. If you get your wallet stolen, those $20 and $100 bills are gone. If your wallet contained your Kinesis Hardware Wallet, your assets are still safe. You will need to buy a new hardware wallet or restore your seed phrase to a Kinesis Online Wallet, but your assets are still secure.
- Kinesis can be used to pay someone in person via the phone app, or to transfer money internationally much cheaper than traditional services. If you know someone’s e-mail address or phone number, you can request payment securely and know when you’ve been paid in an irrevocable manner. If you make a payment to someone, you can later prove that payment was made.
A Brief Note on Kinesis Yields
Kinesis yields are innovative, and at first glance many people instinctively say “that’s not possible – this must be a scam of some kind.” The yields are real however, they are just unique. Kinesis figured out how to make gold and silver produce a yield without any risks from fractional reserve banking, leasing, or any traditional method. Kinesis yields are funded solely by transaction fees – the higher the velocity of money, the greater the yields.
As mentioned above, every transaction on the Kinesis blockchain has a transaction fee assessed. This fee varies between 0.22% for purchases on the Kinesis Exchange and topping up your VISA card, to 0.45% for wallet-to-wallet transfers. If you spend $200 on your Kinesis VISA at the grocery store, you also paid $0.44 worth of gold/silver when you topped off your card. If you buy a riding lawn mower from me for $1,000 and we use Kinesis, you’re actually paying $1,004.50 of metal, and $4.50 of gold/silver goes into the Master Fee Pool. These tiny fees add up to a significant amount, and this pool of fees is what pays yields in Kinesis.
Overall, 52.5% of the fees generated in Kinesis go back to users of the system. Kinesis funds itself and makes its profit on 17.5% of the fee pool. 20% goes to partners which expands the system.
The system was clearly designed for it’s users vs. as a profit center for the company. It’s more of a member owned credit union than a traditional bank.
A Kinesis Walkthrough
Let’s assume you want to try Kinesis out for yourself, because you see the value of saving in gold and silver instead of dollars (or pounds, or euros) in this inflationary era. We will start by transferring in enough dollars to mint 100 KAU – as I type this that represents $5,623. For a simpler approach, see the last bullet.
- You follow the directions in Kinesis to transfer your fiat currency into the system. You may use a wire, or wise.com, but you successfully transfer your assets in. Congratulations – this is currently the hardest part of the process.
- If you transferred your funds to the mint directly you can go ahead and mint, otherwise you will need to transfer your funds from the Kinesis Monetary System (KMS) to the Mint, which has a $25 fee associated with it.
- Now, you choose to mint 100 KAU. When you mint you see your dollars disappear and KAU shows up in your account in its place, but what’s happening in the background is that a 100 gram gold bar is purchased from the market maker, this is physically moved into the Kinesis section of the vault, and the 100 KAU this represents is sent to your account. Remember – Kinesis owns none of the metal – for additional money to be created someone needs to bring that gold or silver into the system – in this case that’s you.
- If you were transferring in less than the 100 KAU or 200 KAG required to mint, then you can just buy on the Kinesis Exchange instead. You can buy KAU and KAG with dollars, pounds, euros, bitcoin, LTC, ETH, USDT, and other options. You will pay 0.22% of the transfer when you buy or sell on the exchange, but this is easier than minting. You forego the minter’s yield, however.
Now your money is in the Kinesis system, in its native currencies of KAU (digital gold) and KAG (digital silver). Every day your assets are sitting in your account they are accruing holder’s yield, so you’re being paid to vault with Kinesis. If you minted your KAU and KAG, as soon as you spend those coins they start to earn the minter’s yield, paid in gold and silver, forever. If you didn’t mint coins, then the amount of KAU and KAG you bought on the Kinesis Exchange in the first couple of weeks after your first desposit is recorded, and you receive a depositor’s yield in perpetuity instead.
If Kinesis works well for you and you refer friends, if you get them to use your signup link you’ll be entitled to referrer’s yield, which is 7.5% of the fees your friends pay in Kinesis.
If you’re really impressed and want to buy into the system, you can purchase KVT tokens. There are a hard limit of 300,000 KVT that will ever exist, and these were what was used to fund the development of Kinesis and encourage its use. 20% of the master fee pool is paid to KVT owners, proportionally. KVT are currently being sold for $1,500 each to users not in the United States. If you live in the United States and would like to purchase KVT then we can sell you some. And in order to spread ownership of the system, we sell the first two at a discount. See this article. If you are signing up for Kinesis, please use a referral link from a friend or family. If you don’t have a referral link, please consider using ours.
Yields are really the killer feature of Kinesis, and it can take a while to get your head wrapped around the concept. We strongly encourage you to watch the videos Kinesis makes available that cover yields – it takes about 22 minutes to watch them all.