What is Kinesis?
Kinesis re-creates Sound Money for the 21st Century. Conceptually it’s vaulted gold and silver that’s digitized and deliverable in any quantity by the implementation of a blockchain.
The nation of Indonesia (the fourth largest country in the world by population) rolled this out as a payment and savings solution in August of 2023, and more public-private partnerships are on the way.
If you’re not familiar with the concepts of Sound Money or Blockchains, click the blue links below, otherwise read on.
The Case for Sound Money: Stability, Trust, and Economic Freedom
As our world becomes increasingly complex and interconnected, the necessity for a reliable form of currency has never been greater. Yet, the basic tenets of money—durability, divisibility, and a stable store of value—are being eroded by unchecked money-printing and inflation. This is where the time-honored concept of sound money comes in.
Limited Supply: A Shield Against Inflation
Inflation is the silent thief that erodes the buying power of your hard-earned money. When governments have the ability to print money indiscriminately, each unit of currency loses its value, impacting your purchasing power. Sound money, characterized by its limited or fixed supply, acts as a shield against this dilution of value.
A Reliable Store of Value
Imagine saving for years, only to discover that your savings can’t buy you what they once could. Sound money addresses this by providing a consistent store of value. It doesn’t decay or spoil, and its intrinsic value remains relatively stable over time. This is crucial for long-term financial planning and wealth accumulation.
Possibly the best way to visualize this is with this chart of historical gold prices from GoldMoney.com
Divisibility: Practical for Everyday Use
What good is a currency if it’s not practical for everyday transactions? Sound money is easily divisible into smaller units without losing its value. This flexibility makes it ideal for both large-scale investments and small, daily transactions.
Trust and Transparency
Sound money has built-in features that foster trust. Its limited supply and enduring value mean that people can trust it to serve its primary functions as a medium of exchange and a store of value. Additionally, the transparent rules surrounding sound money minimize the risk of manipulation, further enhancing its reliability.
Conclusion
In a time of economic uncertainty and fiscal irresponsibility, the importance of sound money cannot be overstated. It offers stability, encourages trust, and provides a solid foundation for the economic freedom of individuals and nations alike. By embracing the principles of sound money, we arm ourselves against the erosive effects of inflation and secure a more prosperous future for all.
At its core, a blockchain is a digital ledger or record-keeping system. But instead of being stored in one place like a traditional database, this ledger is distributed across multiple computers, known as nodes, around the world. Each of these nodes has a complete or partial copy of the blockchain, and they work together to maintain and update this ledger.
Imagine a blockchain as a series of digital “blocks” that contain lists of transactions. Each time a transaction is made, it’s verified by the nodes in the network and then added to a new block. This new block is linked to the previous one, forming a chain of blocks—hence the name “blockchain.”
The unique thing about blockchain is its decentralization. Unlike conventional databases managed by a central authority, like a bank or government, a blockchain is maintained collectively by the nodes. This makes the system more transparent and secure because no single entity has complete control over the entire blockchain. It’s also more difficult to tamper with: to change one block, you’d need to change every block that comes after it, which would require the consensus of the majority of nodes—a practically impossible task.
One more crucial feature is that once a block has been added to the blockchain, it can’t be changed or removed. This makes the blockchain a tamper-proof, “immutable” record of all transactions that have ever occurred on that network.
In summary, a blockchain is a decentralized, transparent, and immutable digital ledger, maintained by a network of nodes. It serves as the foundational technology for various applications, from cryptocurrencies like Bitcoin and Kinesis to more complex systems for supply chain management, digital voting, and beyond.
Gold and Silver are great. Why mess with a good thing?
Because gold and silver, as we own them today, are no longer usable for commerce – they’re more like an investment or savings vehicle. Worse, storage is expensive and risky.
Imagine this: your wife wants you run out and get an ingredient for dinner, and you need to fill your tank on the way. Imagine you’re carrying your smallest denomination coins of gold or silver that you own. Can you make this purchase anywhere in the modern world? The answer is a flat no, and that’s what Kinesis fixes.
Precious Metals on the Blockchain
Kinesis stores your physical metal (insured and audited so you know it’s there) and it makes each ounce of silver and gram of gold divisible to 5 digits, so you see transactions like this:
That’s the equivalent of 76 cents deposited in my account (it’s actually 0.00705 grams of gold that exist in the vault whose ownership was transferred to me.) So Kinesis can do tiny real world transactions in gold and silver in real time – typically 2-3 seconds per transaction. Direct sends of KAG (silver) and gold (KAU) are currently limited to 0.03 KAU or KAG or larger (so $1.16 and $3.25 equivalent) that can be sent directly to another user, but that doesn’t matter if you’re spending on a debit card.
Debit Cards
This is the integration layer that turns physical gold and silver into something you can spend in the real world, and unfortunately we are waiting on debit card availability as the previous banking partners got scared off by Biden-era policies and we lost the physical card in the US and the virtual card in 62 other nations. When we had the card, commerce in gold and silver was as simple as any other credit- or debit-based transaction. This should be back online by the end of 2025, but it’s currently a hole in the system.
So in our hypothetical late-night run to the store, purchases can be made by using your Kinesis card instead of the Capital One card you may currently use. Near-instant, accepted anywhere, and it allows you to hold your funds in gold and silver instead of your local currency which is losing value every day.
It Gets Better
A common criticism of gold as an asset is that it doesn’t have a yield. Instead, you buy it, and then you pay someone to store it for you securely. Kinesis is the first entity in the world to give gold and silver a yield. Understanding this gets complicated though.
Here’s the gist of it:
Every transaction on the Kinesis platform has a fee attached to it. This is between 0.22% (for debit card transactions and for purchases or sales on the Kinesis Exchange) and 0.45% (for KAU and KAG sent directly to another user.)
45 basis points doesn’t sound like much, but it adds up. I’m writing this on August 25th, 2025, and here’s a snapshot of the “Master Fee Pool” (basically all those 22- or 45-basis-point fees in aggregate):
So as of today, a bit more than $1.5 million is in the master fee pool, and that is what funds both Kinesis and the yields in the system.
If that were paid out today:
- 15% goes to the Holder’s Yield. Think of this as a substitute for interest earned on a savings account. So $228,170 is going out to all the holders of KAU and KAG, proportionally. If we run the numbers that’s a monthly yield of 0.055%, or about 0.6% annually on gold. That’s not much (it was closer to 2.5% in July), but the system isn’t really getting a lot of use until the debit cards come back. Stil, earning a bit more than half a percent on your gold and silver sure beats paying storage fees! And KAU has increased in value from $60 to $108 since the last time I edited this page. Gold prices are somewhat volatile, but I don’t see that trend ending any time soon.
- 5% goes to the Minter’s Yield. Now, with most crypto “minting” is something that is performed by people running fast machines calculating hashes to add new blocks to the blockchain, but Kinesis is different. Minting in Kinesis means buying gold or silver at the market price and bringing it into the Kinesis vaults. Every gram of metal in the vaults is owned by someone, so this will mostly be an arbitrage opportunity in the future. In return, you get a perpetual minter’s yield.
- 10% goes to Velocity Yield. This is a yield that’s earned by using the system – every time you buy, sell, or spend KAU or KAG you’re earning velocity yield. The more you spend, the larger a percentage of this yield you qualify for.
- 7.5% goes to Referrer’s Yield. If I refer you to Kinesis, then I receive 7.5% of the yields you generate. So if you send $100 of gold to someone else in Kinesis, you pay $100.45 for that transaction. That 45 cents is the transaction fee, and the next month 7.5% of that (or about 3.3 cents) would be added to my refererrer’s yield. Note that I receive some of the yields you generate, but if you refer another dozen users to Kinesis I don’t receive anything further from that. This is an incentive to encourage your friends to use Kinesis, or to refer the business you own to accept Kinesis, rather than a multi-level marketing scheme.
- 20% goes to KVT Yield. When Kinesis started they sold Kinesis Velocity Tokens to fund the project, and each KVT is entitled to receive a perpetual yield from the Kinesis system. The start-up capital came from users, rather than loans from banks or seed capital from investment firms. These KVTs can be bought and sold on the Exchange, and only 300,000 KVTs will ever exist. I like to think of these as the equivalent of little digital geese that lay gold and silver yields in my account every month. This month, if the numbers I showed above were the total fee pool, each KVT owner would receive $11.57 of gold and silver. Annualized that’s $138, so KVTs which are currently trading for $784 have an annual yield (at this rate) of 17.7%. As Kinesis grows the size of these yields will increase but the number of KVTs will never increase, so if Kinesis succeeds these may be the investment of a lifetime, paying in gold and silver, forever.
So fully fifty-seven percent of the fees Kinesis collects are paid out as yields to users of the system; the rest funds Kinesis or is paid to partners.
So? What’s so special about this?
There are a few things that I think are genius about the way Kinesis went about trying to re-create money:
Blockchains are high trust. Once a transaction is added to the blockchain, it’s there permanently. When I pay you in Kinesis you know the payment is irrevocable, unlike a check or credit card transaction. This is comforting if, say, you’re selling me your car.
It’s also visible. Unlike a bank, or a gold vaulting service where they have an internal database that tracks ownership of assets, a blockchain is outward facing and visible to the world. The ownership of every gram of metal in the vaults, and every transfer is visible in a mostly anonymized way. You can see this on the official Kinesis Explorer, or on the open-source watcher node I run here. Yes, you can maintain a copy of the Kinesis blockchain yourself if you like.
Gold and Silver are unmatched in their ability to preserve purchasing power
Gold and silver have done this since the beginning of history.Nothing is a better, more proven store of value.
All the metal in the Kinesis vaults is owned by the users
With a bank, when you deposit money it no longer is yours – instead, it becomes an unsecured liability of the bank. Kinesis, on the other hand, acts as a bailee for your metal. Should something happen to Kinesis, your metal remains yours and can’t be seized as one of Kinesis’ assets. Because it’s your asset.
All the metal is audited by then internationally respected auditor every quarter
You know your metal is still there, vaulted and insured, because Inspectorate (Bureau Veritas) inspected, tested, and weighed it within the last 6 months.
Blockchain means you can spend gold or silver in arbitrary amounts, in seconds.
In Kinesis, the units of account are KAU (representing a gram of gold, currently worth a bit more than $108) and KAG (which is a troy ounce of silver – about $39 each.) If, however, you want to spend an arbitrary amount you can do that because KAU and KAG are divisible down to tiny fractions. As I type this, the smallest amount I can send is 0.03 KAG (about $1.16), and I can send that or any larger amount to you anywhere in the world in about 3 seconds.
You can spend your gold and silver on a debit card
This is true most places. The United States has been a bit authoritarian about alternative payment methods rolling out, but users in 62 countries so far have access to a debit card that allows them to spend Kinesis anywhere that accepts MasterCard. The conversion from metal to local currency happens at the point of sale, and is immediate and painless. Note that this section was written after the physical card provider in the US canceled all crypto-related activities, but before the virtual card in the rest of the world was canceled. We are currently without a debit card, but multiple providers are coming online and should be online before 2026.
In Kinesis your metal earns a yield and has free storage
This sounds impossible, but it’s not. I’ve given the overview of how yields work here, but Kinesis has better explanations (and videos) if you prefer.
Your metal is deliverable.
Gold is deliverable in 100 gram bar increments, and silver is delivered in 200 ounce increments (made up of two 100 troy ounce bars). Some users have run into difficulty if their desired denominations are not available in the closest vault and they don’t want to wait, and insurance providers may require delivery via armored card which can really drive up delivery costs, but at least one online precious metals vendor is offering delivery of smaller amounts in the form you choose (see image below for one made today to a user in Japan.) Kinesis is planning on offering delivery of smaller amounts via the US-based Kinesis Bullion Store, but this is currently a US-only option.
