Colu, a startup that wants to put Bitcoin’s blockchain to work tracking other kinds of transactions, has raised $2.5 million to do just that, TechCrunch reported on Tuesday (Jan. 27).
The seed round for the Tel Aviv-based company was led by Israeli venture capital firm Aleph and U.S.-based Spark Capital, with participation from BoxGroup and Bitcoin Opportunity Fund. The funding will go into building a platform that uses blockchain technology to provide unique access to everyday purchases and possessions.
While the price of a bitcoin has slid precipitously over the past year, startups have been looking for other uses of the underlying technology — and better ways of explaining it to mere mortals.
“The simplest way to think about the blockchain is as a Google spreadsheet that you’ve shared with everyone on the planet,” Colu CEO Amos Meiri told TechCrunch. Giving everyone access to that spreadsheet, along with the means to approve changes to the spreadsheet (or ledger, in Bitcoin terminology), creates an opportunity to bring more trust and security to transactions.
While a basic bitcoin transaction just records volumes or amounts of bitcoin exchanged, Colu is creating an extra layer on top that lets the blockchain ledger track exchanges of real world objects such as keys, tickets, titles and deeds, or anything else.
In practice, that might mean that if someone bought concert tickets, instead of paper tickets the customer would receive a string of numbers — an encrypted token — that verify the purchase and are also recorded on the blockchain ledger. The customer would also a get of private keys preventing anyone else from accessing the ticket. Colu would turn the token into a QR code that could be stored on a mobile phone and scanned to get into the concert.
But a major hindrance to creating such applications is that most people still don’t know what Bitcoin and the blockchain area, or why that decentralized and encrypted but complicated process is better than a regular paper or digital ticket, according to VentureBeat.
The company is still beta-testing its development platform, but several application developers are already using it to integrate bitcoin into their transaction systems. Colu will be releasing a more public build in Q2 of 2015.