Another well-established social media startup is going all in on cryptocurrency.
For the past year, the makers of the live-streaming video chat service YouNow have been quietly developing a new app that will be fueled by crypto tokens minted on Ethereum, a digital currency network that rivals Bitcoin and lets programmers spin up their own virtual currencies. (For background, read this Fortune feature on Ethereum and its founder, Vitalik Buterin.)
Adi Sideman, CEO of YouNow, shared the news with Fortune in advance of a talk he is slated to give at the ICO Summit, a confab for cryptocurrency enthusiasts held in Zurich on Friday. YouNow's new app, meant to supplement its existing one, is named "Rize," and the tokens associated with it are called "Props," he said.
To kickstart the business, YouNow is planning to host a token sale, also known as an "initial coin offering," or ICO, in the very near future, Sideman said. ICOs represent a newfangled way for ventures based on blockchain technology—shared ledgers that power cryptocurrencies—to raise funds and create their own miniature virtual economies. They are indisputably today's hottest trend in the world of financial technology, although they are not without controversy: China banned them in early September, lumping them in with pyramid schemes.
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"It's definitely ballsy," Sideman said of his plan. "The projects in the industry haven't yet proven themselves. That said, we're taking a very practical approach."
YouNow, which reports having attracted 40 million registered users since its founding in 2011, is the second established social media startup to pursue a cryptocurrency-based offering in recent months. The first, Kik messenger, which has garnered hundreds of millions of users in its lifetime, held a token sale of its own this week.
Like Kik, YouNow has already proven that its users are willing to earn and spend an i...