Blockchain

Intriguing insights into Clinkle, superstar payment startup with $25 Mn funding

One of the most talked about payment startups that is getting everybody's attention is Clinkle. Everybody wants to know what is this Stealth mode startup really upto? While we wrote about Clinkle earlier, there is a lot of fresh insights. We thought of giving you a lowdown. Clinkle is building an alternative payment infrastructure with the foundations based on algorithmic currency. This will likely start with Bitcoin. Clinkle aims to be a mainstream conduit and abstraction layer for algorithmic currency, so easy to use, your parents or perhaps grandparents would toss a few Clinkles around. Because this system is based on algorithmic currency, one could give nano payments to macro payments and the costs incurred will be negligible. This aspect alone will open up new business models where business could charge mils of a penny for product and services. This is just one of the ingredients in Clinkle, there are many more.

The technology to send and receive Clinkles was recently exposed in April 4th, 2012 patent application from Clinkle founder Lucas Dulap. This patent describes a method whereby:

"An integer code using echo delay encoding of ultrasonic waves in the 19 kHz-21 kHz band. At the time of transmission, the sender 2 generates a random noise profile stream and emits this profile through a band-pass filter permitting 19 kHz-21 kHz."

This means a smartphone will communicate super sonically with another device, in many cases a typical modern Verifone Credit Card Terminal at the merchant location or perhaps a device connected to legacy Credit Card Terminals or legacy POS systems. Of course some locations will have a smartphone or tablet.

Realtime Conversions

This future world may not happen until the value of the algorithmic currency stabilizes. Clinkle has a way to address this issue with an amazing dynamic currency conversion system that will shield typical users from the fluctuations, however if a single Bitcoin continues to approach a thousand if not hundreds of thousands of dollars, the upward movement may create a hard time for the conversion system.

The thing that has confounded so many in the payments world, especially startup payment companies is why there is so much interest in Clinkle. It really is the way they will deal with the conversions of the algorithmic currency into US dollars or other sovereign currency. They have built a genius model that accounts for the conversions in real time and shield the user from the underling fluctuations. Clinkles will be an abstraction layer on top of the actual currency. This will allow the company to be flexible and adopt any new system as well as sovereign currency in the future.

Don't Ask Don't Tell

Clinkle will have a challenge in they way they market the service. If they speak of Bitcoin too much even the least informed will soon hear of how rapid Bitcoin value is increasing and perhaps prefer to hold as an investment rather then spend the Bitcoins. However if Clinkle completely shields users from the currency there may be a number of repercussions as it becomes more exposed. Thus there is a challenge on how this should be presented.

The Regulators And Revenuers

There of course are consumer wallets and merchant access systems but there is quite a bit more that will go into building a new way to pay. The company will have to deal with the Money Transmitter aspect of the new system and also the scrutiny of federal and state regulators. There is clear evidence they are working with direct guidance of the regulators. The company will take great pains not to be attractive to avoiding legal reporting requirements.

So Good And Easy Your Mom Wants To Pay With It

As I mentioned, Clinkle aims to be a mainstream conduit for algorithmic currency, so easy to use, your parents or perhaps grandparents would toss a few coins around. The big work going on in the background to shield consumers and merchants from the mess that takes place behind the curtain is the stuff that 100 year companies are made of. No one can predict how algorithmic currency will grow, distribute and get regulated to any exact degree. But the promise this opportunity holds has made Lucas Dulap and his company the single most talked about payments company in the last few months. With a huge list of investors that "know better" then to buy into hype, they already see the vision that Lucas has painted and they think it will be very big.

Just this last week I spoke to two rather well known VCs that wanted to better understand how the Clinkle dynamic will play out. The good news is there are some simple solutions to the challenges Clinkle faces from history. The funny thing is most of the solutions have nothing to with currency. There is one example in ancient history that correlates nearly perfectly. I am surprised no one really sees how this will inform a solution.

Clearly Clinkle has not been realeased, let alone announced and thus just about every aspect could change.

The next year will be exciting for the payments industry. The media will change focus from one payment startup company to another as they chase 'disruption'. One thing is very clear, history already has an answer on how this will change both companies. And how it will change you and me.

Clinkle's Bitcoin Payment System Could Raise Single Bitcoin Values Into The Thousands Of Dollars 

As Clinkle begins more robust alpha testing of the sound based Aerolink system the world around the financial infrastructure is changing. Clinkle is really a brilliant idea, but may face an unlikely problem. The algorithmic currency Clinkle may start with, Bitcoin is on a rocket ride upward. This is a good thing for those of us who have been mining for a few years. It is also a very good thing for those of us that just hold Bitcoin. This rapid rise however will make it hard for just about anyone to part with any fraction of Bitcoin as a payment because holding it as an ever increasing investment is far more valuable.

Clearly Clinkle has not been realeased, let alone announced and thus just about every aspect of its offering could change.

China And Bitcoin Are Falling In Love

Rapid Increasing value is the first world problem with all algorithmic currency, at least in the popular discovery phase. In the case of Bitcoin recently, Asia in particular, China has begone to discover Bitcoin (比特币, or bitebi) to a more popular level. Some of my good friends that have built amazing models of Bitcoin adoption have pumped in the numbers that China represents as it stands today. The results are just hard to comprehend. If one out of twenty Chinese start using Bitcoins for just one transaction per month, a single Bitcoin could reach hundreds of thousands of dollars in a relatively short period of time. As it stands today the recent upward movement is because of the start of this process.

Bobby Lee, founder and CEO of BTC China has been one of the reasons more transactions now take place in China then any other part of the world. This trend will continue for the foreseeable future.

History Already Has Answers

The good news is there are some simple solutions to this problem from history. The funny thing is most of the solutions have nothing to with currency. There is one example in ancient history that correlates nearly perfectly. I am surprised no one really sees how this will inform a solution.

The next year will be exciting for the payments industry. The media will change focus from one payment startup company to another as they chase 'disruption'. One thing is very clear, history already has an answer on how this will change both companies. And how it will change you and me.

Brian Roemmele

Brian Roemmele, is a mobile payments expert and an avid blogger at Quora. His profile can be found at http://www.quora.com/Brian-Roemmele. Brian is an Apple enthusiast and has deep interests in writing about new technology in payments.

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