Colu’s Journey: From Colored Coins to CLN
It’s hard to avoid the discussions nowadays about the meteoric rise of cryptocurrencies and the implications of their technology on traditional finance. Today, debates about blockchain, Bitcoin, regulation, and banking fill our news channels daily. However, when we established Colu 3 years ago it was clear to us that this is a debate about the future of money. We believed that the introduction of digital currencies that are based on open source code will create digital economies on a scale we have not yet witnessed. Even before the blockchain industry was called the blockchain industry, we set out with a small seed funding round with the goal to make it easier for developers to use blockchain technology. We started with developing an SDK that attracted hundreds of developers who started using the platform for various applications, but the most common was the issuance of digital currencies. That made us stop and think.
We already knew that blockchain technology will be an underlying part of our financial infrastructure, but we needed to focus on the problems that blockchain could solve. We decided to focus on solving the payment problem that affects business owners and consumers every day. In order to understand how this technology could create new behaviors and business models with a mainstream audience, we first tested our theory by communicating with businesses directly, to gage their reception of this new technology. Our first consumer product used the Bitcoin blockchain itself to conduct dollar transactions and other pegged-currencies represented on a blockchain. This is when we learned about the hurdles of mainstream adoption for this technology, but we also realized the immense potential it had. We then decided that we wanted to build a simple product based on an existing financial model — one that people were already using on a daily basis. This would help reduce the learning curve for new local consumers when interacting for the first time with a digital currency.
After engaging with consumers and local business owners about digital currencies, we realized the magnitude of the problem. Local communities are largely abandoned by multinational corporations, and do not receive the same attention from financial institutions. Although small-enterprises outnumber large companies by a wide margin, and typically employ many more people, it seems like almost no company in the payments space is focused on catering to their needs.
Colu developed its own digital wallet app and issued community currencies in Tel Aviv, Haifa, Liverpool and East London. The community currency model is meant to strengthen local economies, support local businesses and keep more money circulating in the local economy. In less than a year we’ve managed to reach nearly 100K users and recruit hundreds of businesses in these communities, empowering them to buy locally and contribute to their local economy.
To bring about the next chapter of our mission, and in order to scale and bootstrap the ecosystem, we’re introducing the Colu Local Network (CLN) which is a local payment network that builds on top of open web standards for payments. It is a new way of rewarding and empowering local communities by letting more wealth circulate in the local economy and as a result improving local access to capital. It creates a true “shared economy” where the success of the economy is shared with the people who support it.
Colu is about to come closer to fulfilling its goal of bringing cryptocurrencies to the masses by giving users the ability to exchange cryptocurrencies directly in its digital wallet app and drive real life usage of cryptocurrencies. These currencies are built on an open financial infrastructure that could introduce new possibilities into our lives. With the CLN and its community currencies, users will be able get their coffee fix in the morning, split a bill, pay friends or buy a bike from a local merchant with fiat money through Colu’s digital wallet app — and enjoy the added value of being rewarded with community currencies. This collaborative responsibility and reward mechanism encourages every network member to promote the network, creating a strong network effect, thereby spreading the success of the community among all stakeholders.
We believe that the cost reduction achieved through financial disintermediation will be reinvested into the community and will be able to remove a lot of friction existing in today’s payment systems. The CLN will be the interface through which communities will be able to easily access the wealth creation and financial tools that are encapsulated within this technology. Our mission is to on board a piece of the real economy that all humans share on a daily basis — consumers transacting at their local businesses.
Read more about the CLN token on our website
Download our whitepaper