If Bitcoin ever goes mainstream, which startups will ride the tide? Coinlock is a simple concept with a big idea: That people should be able to easily sell (legal) digital content to anybody in the world, anonymously, and securely. Think MegaUpload meets iTunes meets PayPal, available to the entire world and wrapped in a warm Tor blanket.
At the moment, Coinlock is an ultra-niche service. It tackles a niche problem while using a niche currency. However, the potential market could be huge. More and more content is moving into the digital realm, and finding a reliable and cheap way to monetize it internationally could unleash a storm of talent.
We thank Matt Branton, CEO of Coinlock for speaking with us about his startup.
1) What does Coinlock do?
Coinlock is designed to let content producers effortlessly sell digital products with Bitcoin. It has no up front costs, no required infrastructure, no setup, and no commitment. Since it uses Bitcoin there aren't any charge backs, and payment flows directly to the seller.
2) Is it easy to use?
The user simply selects a file to upload, assigns a price for the product (which is converted to the Bitcoin price at time of purchase, and shields the seller from fluctuations in price versus their currency), enters the Bitcoin address they want to get paid every time someone purchases a product, and publishes their content. They get a link back which can be used anywhere a normal link can be used to directly buy the uploaded content. So someone running a blog could upload their e-book, get a link back and sell that ebook directly from their blog without having to do anything else. Very seamless selling.
3) That sounds like it could be an exciting tool for promising individuals who haven't found a way to get their foot on the first rung yet. How does Coinlock protect its users?
The service encrypts the content in the users browser, and decrypts it in the sellers browser. This is to preserve the privacy and anonymity of transactions. I've taken a strong stance on user privacy, I don't believe it is anybody's business what legal content is bought or sold. As an intermediary the seller can be sure that neither Coinlock nor anybody else can decrypt their content unless they are provided the link. This means the content cannot be altered or stolen by either Coinlock or anyone else. It is up to the seller to distribute the link securely to whoever they want to be able to buy their content. It is also important to note that in the normal course of business we never see the link, it does not get transmitted over the network, and never hits anyone's logs.
4) I see. So you take security pretty seriously. Is Coinlock meant to be an exclusive payment option or one which can reside side-by-side with more conventional payment systems?
It is meant to complement existing selling strategies, for many people selling content only in Bitcoin is not practical, but this makes it easy to offer it as an option.
5) It sounds like a good way for people to cast their nets more widely, and it may even provide a marketing advantage, signaling to the tech-savvy crowd that the seller is thinking outside the box. What types of media are you focusing on?
It is designed to serve all sorts of content, can deal with small or large files, and shields the seller from the complexities of content serving, payment processing, and shopping carts. It also leverages Bitcoin in that content can be sold all over the world with no additional effort. The site operates in six languages right now, with three more on the way.
6) What are the biggest hurdles you face?
I think the biggest conceptual hurdle for people is the idea of being able to sell directly to somebody else without needing a shopping cart, or online store presence. Since e-commerce has developed in that way largely because of the limitations of traditional credit card payments. We have this ingrained idea of a checkout process, but this is much more of a direct payment model. It is basically as close as you can get right now to buying a digital product in an almost cash-like way. You could be a photographer and put a link directly under your low resolution photograph that says, "Buy the high resolution version right now in Bitcoin" and someone could directly purchase it in exactly one step.
7) Who is your target audience?
I think the target audience is fairly broad. It is usable by anyone who wants to sell content online, books, art, music, work-for-hire, wordpress themes, independent games etc. Its like a bitcoin distribution channel :) I'm really hoping that people embrace it as a viable option for selling their goods.
8) Are you looking for startup money or talent?
At the moment I'm not. But I want to get the word out and see what people think. In the current environment, I wouldn't expect any kind of widespread adoption, but I have high hopes for the future and I would welcome any feedback that the Bitcoin community has to improve the service.
9) Great. Well thanks for speaking with us today. We'll be following you closely and looking forward to seeing how Coinlock pans out.