How Bitcoin Can Change Crowdfunding

January 18, 2022 9:40 pm

Crowdfunding is a powerful concept that allows for anyone to be able to support a cause whether it be for innovation or for social enterprises by providing capital to fund it.

It is often essential to unite resources in the online community at large scale and within record time which has led to the creation of many successful companies so far.

Traditional platforms such as Kickstarter and Indiegogo have enabled many of the crowdfunding initiatives in the past years.

With that being said, there were always limitations to the existing crowdfunding model which relied entirely on these platforms because it was dependent on traditional finance that not everyone has access to, especially in emerging economies.

Platforms like Kickstarter are not available to provide their services everywhere and it also forces the funding process of these initiatives to be entirely managed by a third party so you are never 100% sure that your crowdfunding efforts made a difference.

Reliance on these platforms are also very expensive as their are costs to handle the management of the platform and to continually ensure its reliability.

The current model of crowdfunding has often times been called the web 2.0 version, but now there is a new 3.0 version that is emerging which focuses on using blockchain technology to facilitate the crowdfunding protocol.

Kickstarter has recently switched from using Stripe to creating its own crowdfunding protocol on the blockchain which indicates a major shift.

A shift to this new model would essentially allow everyone in the world to be able to participate in crowdfunding projects without the expensive costs of oversight typically required in a web 2.0  model which relies on a platform.

Through this new model, various crowdfunding projects have already been launched worldwide where communities from every corner of the world was able to participate.

BitcoinMagazine reports:

In 2021, you may have noticed the spawning of crowdfunding projects featuring social and humanitarian projects in emerging economies.

A popular one that went viral was Bitcoin Smiles, raising 1.88 BTC for supporting dental care in El Zonte.

Another recently launched project is Kivéclair, a development project that educates people about Bitcoin in the Democratic Republic of the Congo, which reached 50% of its target.

These are only two of the several project initiatives supported by the team at BTCPay Server, which help with the self-hosting of the site and configurations.

These use cases are highlighting the need for a seamless, global crowdfunding experience, enabled by Bitcoin on Lightning and supported by the Bitcoin community.

Kickstarter specifically is looking to utilize the Celo blockchain to help support their crowdfunding protocol due to the fact that it is energy efficient and has been called “carbon negative.”

The company itself is funding the project and has announced that a new organization will be created in order to run the initiative.

Techcrunch shares more details on the company’s plans:

Kickstarter is launching a new organization, the name of which has yet to be determined, which will begin development of the protocol.

Kickstarter is funding the project, appointing an initial board for the organization and committing to be one of the first platforms on the protocol, though no specific timelines were offered for when such a transition might take place.

The company also announced that they’re establishing an “independent governance lab,” which will publish research and engage with the community on the topic of protocol governance.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.