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I've seen something like this attempted before. It suffered from this problem:

A <---> B <---> C

A and B are 1 mile apart. B and C are 1 mile apart. B can see what both A and C say, but A can't see what C says to B and hence will see out-of-context messages from B.

It looks like Kiwichat attempts to solve this by having dedicated chatrooms rather than just phasing people in and out of visibility to each other based exclusively on proximity, though I'm curious what happens when you physically leave the coverage area for a chatroom.

"I'm curious what happens when you physically leave the coverage area for a chatroom."

On the desktop anyway, it just trusts that I am where I say I am.

>though I'm curious what happens when you physically leave the coverage area for a chatroom.

At the moment, nothing happens, user stays in a group chat.

i was coming here to make this exact remark along with suggesting more of a coverage map approach.

meaning, "1 mile radius" seems pretty arbitrary, so why not just grab a square mile of real estate based on lat/long? you could do all kinds of localized things with social venues that way -- local events, restaurants, concerts, etc.

Whatever Kiwichat does aside, one possible solution is to not make visibility a function of radius, but to do a simple slowly time-varying cluster analysis on the fly. Something like a 2-d K-Means (input just being lat/lon points of users), where you periodically update the number of clusters as a function of the total number of users, or something. The challenge that would arise by doing this, would be the scenario where you have a low population density, where you'd get user-groups that aren't super localized (e.g. if you tried this in Montana...). Might not be an actual problem, though.
A live updating DBSCAN approach might also work. It would sort of break in the case of dense and uniform usage across the entire map (in which case there would be just one cluster), but otherwise might work well.
To me, one of the toughest lessons in engineering is that you don't have to solve all problems. Imagine holding up the release of the first text messaging system until the problem of dropped texts had been solved.

In the distant past, there was a chat system that had the A <--> B <--> C distance problem. People used it and were very happy with it despite that limitation. It was called CB Radio.

In the even more distant past, you would sometimes encounter this problem when using your vocal cords in a noisy environment.
An interesting way might be to slowly grey out messages when they approach the threshold and allow users to increase their radius (by either a small or totally arbitrary amount)

also the grey amount would be updated in real time if the user is say, travelling on a bus. so messages can change greyness dynamically.

Tested on Opera <-> Mobile Safari on iOS 7.1

Great experiences on both, clean design and nice user experience from homepage to chat.

One small bug that I noticed: titlebar notifications in Opera didn't fire on new chats (regardless whether tab was background or not), and in iOS, titlebar notification flashed "New!" even after acknowledging and responding to chat. Persisted until logout.

Aside from that small nit, great effort!

Very nice. Is there an XMPP gateway?
Interesting idea, but I wish it had a larger radius. The area covered goes up with the square of the radius, so even a small increase (say from 1 to 2 miles) would greatly increase the chances of bumping into someone else. As it stands I'm the only one in my area.
Agreed, I'm in Atlanta and I'm know there are folks a few miles further in town that I'd bump into with a slightly larger radius
You could pick another point of interest.
This is the loneliest thing I've tried to do in a while. Looking forward to using this when I'm in a populous area again. I really hope it takes off.

Oh, and I'd love it if we could use underscores for our names.

I, too, am staring at a lonely map with no one about. Its always interesting how Facebook and Twitter bring people far apart together, but people try the opposite quite a lot with a huge downside. I think Four Square might be the golden example of it working. Color sure wasn't.

[edit: you know fellow developers this type of display is depressing, you could at least say something upbeat to us folks in the middle of nowhere]

I'm in Boston and getting no one so maybe just no one is using it. I like the N people nearest your idea though.
Its a bit depressing being in a downtown area with absolutely nobody to chat too.

Feels like being alone in a crowd sorta. >.<

You could always pivot to a chat for people from New Zealand with that name :)
It'd never work. We think in kilometers not miles ;)
That seems to be intrinsic after a while. I moved to the UK almost a year ago and I still can't get used to miles. (Or rather, get a feel for them). I've become very good at *1.6 and /1.6 though.. Also the confusion between pounds of mass and pounds of currency. 8 pounds (a little under 4kg) sounds like an awful lot of curry.. Of course, we don't use either in NZ, but when both are unfamiliar you don't always make the right choice on the first parse.
Instead of connecting to the people within 1 mile, it should be the n closest people. This would give the same effect, but work for anyone living in any population density.
That would be awesome. I see things like this every few months and it is a bummer when there is nobody to test it with.
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I don't think the cyberbullying is exclusive to Yik Yak. Kiwichat should also be susceptible.

derp?

You need to think of a way to make this less useless for when it is less popular. There's a chance another developer at my school will find this and join, but it's slim.

What if you grouped chat rooms by zip code, and then showed users the 5 nearest rooms, regardless of the distance?

Additionally, what if I want to watch multiple zip codes, like my neighborhood AND campus, even if I'm at home?

I've already made a couple new friends. Thanks!
I worked on a very similar idea for a while though admittedly failed to polish and market appropriately to gauge interest. I thought about a lot of the "issues" that people are bringing up here. My idea was mainly to try and emulate a digital CB radio. So you'd have the overlap issue as mentioned by nilkn, but I didn't see this as a problem in accomplishing the main objective. The main objective being to permit local, real-time communication. Why is the high way backed up to a stand still? Hop on local chat. Where is a good place to park for the outdoor concert? Hop on local chat. I'm new in the area and can't find 'blah' street. Ask on local chat.
I thought of the very same idea, but never even built it, I still think it would be cool. The main problem is that you have to have enough people on the network to make it useful.
Yup, hence rkuykendall-com's comment. Also this is where good marketing comes in. I tried some free Google ad credit and got tons of exposure but few clicks. My next guess would be to try large metro areas and retain old messages in hopes to bootstrap some conversation. http://en.wikipedia.org/wiki/Reed's_law
What I'd rather have is something that acts like a forum for people within X number of miles.

It'd be awesome for classified ads, community events, local news, etc.. and if you went on vacation, you could be immediately plugged into what's happening locally. There are fixed groups for various cities on things like Facebook and Craigslist, but it's amazing how hard they can be to find sometimes.

Cool! +1 for the "closest n people" for those of us plebes who don't live in a tech center... I tried a couple zips near me and no one to chat :(
Where can I see this feature?
I think its a feature that the someone on hn suggested that hasn't been built yet.
Zip code exists in most countries, yet you assume those are US-based one.
Seems like a cool site but from anyone in NZ, the name doesn't seem fitting.

The word 'Kiwi' in a brand name is almost exclusively used by the Asian population here. Eg. Cheesy souvenir shops and Chinese takeaway shops.

http://www.skykiwi.com/ is a good example.

Just a heads up for anyone wants to put 'kiwi' in their brand name and wants to target New Zealand.

PS. We call the fruit Kiwifruit here, not just Kiwi by itself.

I thought it was called Chinese Gooseberry?
I'm also from NZ. I don't have this perception. I generally expect something kiwiX to be somehow related to New Zealand but draw no conclusions as to the type of person behind it.

Kiwi as a fruit comes from a deliberate re-branding of the somewhat inelegantly named "Chinese gooseberry" to draw an association with New Zealand Where it is a significant export.

I have encountered non New Zealand uses of Kiwi and don't have much of a problem with it. I get a small feeling of disappointment like I recognize a friend at a distance but realise it's not them when I get closer. That's about it.