There is a little bit of a feeling of ‘hurry up and wait’ about Bitcoin. On the one hand, it’s a revolutionary technology with huge potential as a currency, an asset, and as a decentralized method to do all sorts of different things like contracts and exchanges. And, Bitcoin has had enough meteoric success in its short 5 years of existence that some people have really begun to take notice. On the other hand, projects like Colored Coins, Mastercoin, Ethereum (yeah, I know, not technically Bitcoin) and others are met with massive fanfare when first announced, and then nothing seems to happen with them for what seems to be ages.
There are a number of things that might launch Bitcoin into everyday use for the average Joe, and one of them is when people start finding themselves using Bitcoin for other things than a currency. If I’m an investor and I find that the easiest, cheapest way for me to trade my favorite stocks is through via a decentralized exchange or through a smart contract, then I’m going to learn how to do that. If I’m an author or inventor, I can copyright my work by adding it as information in a transaction. That information will be written into the blockchain so that there will be irrefutable proof of when I came up with that idea. If I start a company, I can incorporate the same way and issue shares using marked Bitcoins as tokens. As soon as some of these additional uses of Bitcoin become easy enough to use for people to start picking them up, then we’ll see the slow creep of adoption build into an avalanche.
One hair salon in Brisbane Australia is helping prove this concept by funding its expansion to four new sites in that city using Colored Coins.
Klippt is a hair salon with three current locations in Brisbane. The founder, Mitch Brownie, actually started out with a small computer repair shop, but when the hair salon next to his store went belly up, he approached the management of the shopping mall with a proposal to take it over. Within a short amount of time, that shop was a successful enough to allow Mitch to open two more locations, both of which paid off their startup costs and began turning a profit in only six months.
With this early success, Mitch has set his sights higher. He wants to expand first across Brisbane, then across Australia, and then go international. He is currently gearing up for what seems to be only the second Colored Coin IPO on record. (The first, Vapetropolis, sells marijuana paraphernalia.)
The way to take part in a Colored Coin IPO is like this: First, the business owner takes Bitcoins and, using a Bitcoin wallet specially designed to ‘mark’ the coins, creates tokens marked as shares in his company. The owner then advertises the IPO and gets investors who can pay in whatever currency the owner accepts. When the investment is received and confirmed, the owner sends the colored tokens back to the investor. Done.
In the old days, those tokens would have been actual slips of paper, stocks. It has been years since anyone really took ownership of the actual paper, though. Most traders trade electronically and it would be impractical to settle with the actual documents. Everything is kept track of through a centralized exchange like the one on Wall Street. With Colored Coins, though, the tracking mechanism is the blockchain. The investor can hold the tokens, sell them back to the owner, or trade them to another investor without the need of a centralized exchange. One note about this is that you have to use a wallet specifically designed to create and accept colored coins. Sending colored coins to a non-colored coin wallet can cause of the loss of the information that marks those coins. They’ll retain their value as Bitcoins, but
they’ll have lost their value as tokens so be warned! The best wallet to date is CoinPrism, which is a very user-friendly wallet for both colored and regular Bitcoins.
I caught up with Mitch to ask a few questions about his experience with the IPO and Bitcoin. Here’s what he had to say:
What got you guys interested in Bitcoin in the first place?
I first got interest in bitcoin in 2011 when I owned a computer store / Internet cafe. I mined using the Internet cafe at night because I hated the idea of having paid for these computers and having them not making money for 12 hours out of every day. However btc was only worth a few dollars so I didn’t continue or keep the ones I had already mined ๐
Why did you decide to crowdfund with Bitcoin?
Crowdfunding with bitcoin allows us to involve more people. A PTY LTD company in Australia is limited to the amount of shareholders you can have. With bitcoin coloured coins, we can issue ‘shares’ that still attract dividends without the legal issues. We understand that due to the limited audience that can be involved with bitcoin we might not raise the full amount. So after the sale closes, should it not be fully funded, we will be approaching the Australian public via ads in national newspapers to secure the rest of the funding required in a more traditional manner.
Are you accepting Bitcoin at the salon?
Since opening Klippt we rediscovered bitcoin, along with why the technology is so amazing. Klippt stores have always accepted payments in BTC. Unfortunately where we are based is a somewhat rural town (biggest inland city in Australia) where not many people have yet heard of bitcoin. Although we have had the local paper write an article about us accepting it.
What do you think the short and long term prospects are for Bitcoin?
As for the future of bitcoin, I have high expectations. The future has a habit of being very unpredictable, and BTC might become a global currency by default; the place people have to turn to, to store value when their own currency has problems of its own, such as hyperinflation. Bitcoin is here, and it will stay, and be built upon. Much like HTTP.
Please visit Klippt here.
By Mark Norton. Originally posted on BitcoinWarrior.net 06/21/2014. For inquiries, tips, proposals, please email [email protected].