Kodak brought 16mm film on the market in 1923, 9 years before 8mm was introduced. It was an inexpensive alternative for amateurs to the conventional 35mm celluloid format.
The professional industry called it 'sub-standard' during the 1920s. Because Kodak was initially focussing on the amateur market, they hired Willard Beech Cook who had the 28mm Pathescope of America Company and asked him to create a 16mm Kodascope Library.
So one could not only make their own amateur home movies, but also buy or rent films from the library, which became one of the important selling aspects of the 16mm. format. As a film base, Kodak used safety film (acetate) so no nitrate film has ever been used.