Bitcoin’s Plan To Fix The Crowdfunding Problem?
21 January 2022 - 12:56PM
NEWSBTC
Crowdfunding has been around for some time now, and although it has
been a hard time for some projects to gain funds, bitcoin could be
the answer. Let’s look at the root of the troubles and how crypto
could potentially address them. Related Reading | Downward
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Outs… Crowdfunding is a practice where you can donate money –
including cryptocurrencies such as Bitcoin, Litecoin, and more
cryptocurrencies – to projects, associations or people to develop
ideas. It is a very powerful mechanism and tool for innovation and
supporting social enterprises. Different platforms, such as
Kickstarter and Indiegogo have not taken their foot off the brakes;
the web 2.0 crowdfunding movement, which has led to the creation of
several billion-dollar tech startups, like Oculus, and raised
millions of dollars for thousands of causes, is ripe for
development. Crypto crowdfunding has the potential to be a network
that connects people and their ideas. Today, crowdfunding is
dramatically narrowed by its reliance on legacy finance, which
limits the vast majority of the world from accessing it. Although
this is good in theory, and has worked thus far, the major issue is
the reliance on the legacy financial infrastructure, that is not
only costly but globally fragmented. BTC: Bitcoin bouncing back
after hitting all time high in November 2021. | BTC:USD
tradingview.com Most crowdfunding platforms are only found in 30
countries. To date, the costs of operating crowdfunding in this
network are very high, due to the many mediating third parties
involved. The average crowdfunding platform charges a 7% fee per
successful project. Could crypto’s aggressive transaction fees beat
out traditional competitors? Crowdfunding & Crypto: A Pair Of
Aces… Many platforms have had a hard time with the tight reliance
of legacy financial infrastructure; this has made some crowdfunding
platforms move over to the “web 3.0” model. One big example is
Kickstarter, who has decided to move from its reliance on Stripe to
creating its own crowdfunding protocol on other blockchains. This
may make sense for equity-based crowdfunding, which can enable the
platform and it’s users to invest in new companies and their ideas.
A prime example of these worlds coming together was just last year
with Bitcoin Smiles, which raised roughly 1.8 BTC. Bitcoin Smiles
was an initiative aiming to raise funds and provide free dental
care to impoverished people living in rural areas of El Salvador.
Another project that can be used as an example is Kivéclair, a
development project that educates people about bitcoin in the
Democratic Republic of the Congo. Although these are only few
examples of early crowdfunding in crypto, these do provide a valid
source and hope that bitcoin can still rally through its community
of caring bulls and bears. Related Reading | Bitcoin
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What Do The Locals Think? Featured image from Pexels, Charts from
TradingView.com The writer of this content is not associated or
affiliated with any of the parties mentioned in this article. This
is not financial advice.
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