HOW BLOCKCHAIN CHANGES THE CROWDFUNDING GAME?

Navdeep Garg
Blockchain Changes The Crowdfunding Game

Introduction

In this era of highly effective and arguably revolutionary Blockchain Technology. The potential applications of Blockchain go far beyond Bitcoin and similar forms of money which may lead to a new era of Crowdfunding; the era of Disruption. Blockchain is gaining popularity and trust of people because of its ability to keep track of exchanges in a way that’s secure, publicly verified, and virtually impossible to use fraudulently.  This is the perfect platform for creating, distributing, and exchanging currency. Soon, the ownership of other assets may emerge on the Blockchain scene.

Notably, because of the advantages of Blockchain, the world of Crowdfunding could be completely changed.

Crowdfunding is a method for small companies to finance the establishment and development of their business — an irregular strategy, compared to the traditional stock exchange IPO. This approach enables numerous projects to get more, faster, and lower-cost funding. Crowdfunding has skyrocketed in popularity over the past decade or so and it has become an extremely useful alternative to venture capital and has also allowed non-traditional projects, such as those started by in-need families or hopeful creatives, a new audience to pitch their cause.

Through cryptocurrencies, the most well-known creation of the Blockchain — the barriers to crowdfunding the needy in pauperized and war-torn areas of the world where financial support is needed in the bulk could potentially be reduced. By installing systems of communication in those regions, such as the internet, translators, and crypto-to-fiat conversion systems, the stories of the needy detailing why they deserve crowdfunding could be effectively told and passed along to those eager and able to support humanitarian causes.

The natural advantages of blockchain technology can support and improve crowdfunding in several distinct areas:

  1. Decentralization- The Blockchain is completely decentralized. This means it isn’t going to depend on any platform or combination of platforms to allow creators to raise funds. That’s going to have multiple positive effects for the crowdfunding community. For starters, you’ll no longer be beholden to the rules, regulations, and whims of the most popular crowdfunding platforms on the internet. Literally, any project has a chance of getting visibility and getting funded. It also eliminates the problem of fees. While Blockchain upkeep does cost a bit of money, you’ll cut back drastically on transaction fees. This makes crowdfunding less expensive for creators and investors.
  2. Accessible Equity- Instead of crowdfunding to enable pre-orders of upcoming tangible products, blockchain could rely on asset tokenization to provide investors with equity or some similar concept of ownership. For example, an inventor who plans on creating multiple new products with the incoming funds could grant each new investor with a small ownership stake in the company, commensurate with the amount they contribute. That way, investors will see success proportional to the eventual success of the company. This could potentially open whole new worlds of investment opportunity.
  3. Universal Availability- Any project using a Blockchain-based crowdfunding model can potentially get funded. Also, any person with an internet connection can contribute to those projects. There may be some demand for discovery and visibility platforms. But, there isn’t a fundamental limitation the way there is for crowdfunding projects today.
  4. Immediate Provision- Blockchain-based crowd funders wouldn’t have to worry about the “empty promises” that have plagued modern-day crowdfunding projects. Instead of contributing money and waiting weeks or months to receive the promised product, contributors will immediately receive fractional enterprise or product ownership.
  5. Flexible options- Using the Blockchain as asset tokenization grants creators and entrepreneurs more liberties. They can raise more funds by issuing more fractional shares in their enterprise and use those funds to expand. Yet, they can also take advantage of those fractional shares directly. For example, they could save money on hiring employees by compensating them partially in fractional ownership of the business,  converting it into an employee-owned enterprise. Asset tokens become their own form of currency in this model, enabling organizations to do more like hire professionals like marketers and advertisers.
  6. Peer to Peer Exchanges- Just like cryptocurrency today, it’s possible to exchange crowdfunded business or product stakes on a peer-to-peer basis. This provides contributors with more liquidity for their investments. It could serve as a way to generate more interest in the project overall. This change could eventually precipitate the creation of an entirely new type of marketplace.

Toward a New Era of Crowdfunding

It’s no secret that crowdfunding has enormous potential. Even in its current, flawed form, funding is helping new entrepreneurs, inventors, and creators improve the world. In the near future when the Blockchain serves as the backbone of democratized investor contributions, it’s going to be even more accessible, secure, and flexible for creators and investors. It’s only a matter of time though the exact length of time is hard to estimate. There are still some challenges to overcome and only so much Blockchain talent to go around.

Frequently Asked Questions

Providing tailored solutions based on a wide range of blockchain platforms allows us to meet the unique needs of your project. We specialize in Ethereum, a leading smart contract platform, leveraging Solidity for DApp and smart contract development. Our expertise extends to Ethereum-compatible networks such as Binance Smart Chain, facilitating seamless migration. Hyperledger Fabric, a permissioned blockchain framework, and Go and Node.js are used for enterprise-grade solutions.

Smart contracts are self-executing contracts with code that automates predefined actions when certain conditions are met. With our expertise in decentralized applications (DApps), we can create applications that operate on blockchain networks, offering enhanced security and transparency. Providing a controlled and secure environment for your business operations, we deploy private blockchain networks. In addition, we offer token development, blockchain consulting, and custom consensus mechanisms to meet your specific needs. Our technical proficiency and comprehensive blockchain solutions are poised to meet your unique objectives, whether you want to streamline supply chain operations, enhance data security, or explore the possibilities of blockchain-based applications.

Yes, We specialize in providing tailored blockchain development services tailored to the unique and intricate requirements of your project. Expert blockchain developers create custom solutions that encompass smart contract development, consensus algorithms, and decentralized applications (DApps). Our meticulous alignment of blockchain technology with your specific needs ensures the creation of a bespoke solution that maximizes functionality, security, and scalability. Our team has the expertise to deliver precisely tailored blockchain solutions to meet your technical and business needs, whether you require a private blockchain network, a complex DApp, or the implementation of a custom consensus mechanism.

Blockchain services offer transformative solutions with applicability across various industries. Sectors such as finance benefit from enhanced security and streamlined transactions, while supply chain management gains from traceability and accountability. Healthcare leverages data security, and real estate benefits from transparent transactions. Additionally, logistics, government, energy, and entertainment industries can optimize processes, reduce costs, and improve trust and efficiency through blockchain services, making the technology versatile and impactful across a broad spectrum of fields.

The blockchain services industry encompasses solutions and expertise aimed at leveraging the power of blockchain technology. A blockchain is a distributed ledger that offers transparency, security, and decentralization. With blockchain services, businesses can leverage this technology, resulting in several key benefits:

  • Data Security: Blockchain’s cryptographic techniques and decentralized structure enhance data security.
  • Transparency and Trust: A public ledger promotes transparency by recording transactions and data. A transparent company builds trust among users, partners, and customers, which is particularly useful in trust-sensitive industries.
  • Efficiency and Cost Savings: The blockchain eliminates intermediaries, reducing costs and speeding up processes.
  • Decentralized Applications (DApps): Blockchain services can enhance privacy and control over data in decentralized applications. User engagement can be driven by these DApps.
  • Efficient Supply Chain Management: Traceability and accountability are enhanced with blockchain in supply chain management. Fraud and errors can be reduced by tracking products.
  • Scalability: Blockchain services are designed to scale with your business, ensuring that your system can handle growing transaction loads as your project expands.

Navdeep Garg
Article written by

Navdeep Garg

I'm founder and CEO of Revinfotech Inc. I traits in leadership and brilliant practitioner in the Financial Services and FinTech. I helped ban in connecting to the FinTech ecosystem through payment acceptance in blockchain as a service and even help i... read more

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