Hong Kong bitcoin entrepreneur James Bang was on a trip with his family to Indonesia earlier this year when he realised there were fewer cows on his father-in-law’s cattle farm.
He discovered his father-in-law had sold two cows for HK$27,300 to pay for renovation of the kitchen in the family home. It was a revelation for Bang about the economic dynamics of cattle farmers in the world’s most populous Muslim country.
“For another family, their motorcycle was old and they needed to upgrade. So they sold two or three cows to be able to afford a major purchase,” Bang said.
Indonesian cattle farmers can sell a cow for up to HK$15,600, but most only receive a portion of the full price.
Bang decided to use his knowledge of cryptocurrency – a virtual currency using cryptography for security – to find a way for farmers to keep more money from cattle sales and maximise land use.
Cattle farmers purchase calves through financiers who pay for the entire cost of the animal.
After a cow matures for beef production, farmers sell the cow and only keep 20 per cent or less of the sale price, while also paying for the animal’s feed, supplements and veterinarian costs.
“I was really inspired by Airbnb,” he said, referring to the online community marketplace which connects people looking to rent their homes or a single room with people looking for a short-term place to stay.
“I figured how can we apply this to the agricultural industry ... There had to be a way these farmers could maximise their extra farm space.”
The result was the establishment of a start-up – named CashCow Coin – and the launch of a new form of fundraising called an initial coin offering (ICO), which allows backers to purchase a percentage of a new cryptocurrency specifically developed for a project.