Is Cryptocurrency and Crowdfunding a perfect match?
Let’s find out here!
These days, the entrepreneurship is more popular than ever and it’s not gonna change in the near future for sure. Most of the young people out there prefer to own an entrepreneurship themselves, than choosing to work in a 9 to 5 job! But the main problem for all these people lies in acquiring the necessary funds for making their dreams possible.
So how do entrepreneurs overcome these financial challenges?
There comes the cryptocurrency and crowdfunding. It helps the important and interesting projects come to fruition. Crowdfunding is one of the excellent ways for the creative projects to find the funding. Even most of the small projects lay outside the scope of traditional investment methods.
So a lot of companies have come out with providing services by connecting the startups directly with the potential consumers in order to seek funding.
Cryptocurrency based crowdfunding and crowdfunding software is definitely a game changer because they are gonna overthrow these third parties from the scene. Cryptocurrency crowdfunding thus, works by allowing startups to create their own digital currencies and sell them.
This mechanism not only allow them to raise funds but also the investors to make money if the value of their cryptocurrency increases. Apart from boosting new blockchain platforms, it also give the blockchain community a new way to fund its own projects.
How is Donation Plan used for CrowdFunding?
Donation plan is widely used for crowdfunding, helping and donation programs. Donation compensation plan is a newer version of the multi-level marketing. This plan follows the quote of “Give and Receive” concept. In this plan, one has to gift or donate to some other, later you can able to take a gift or donation from others. So each member will get the benefit of gifting from other members. The donation plan can be used in different names based on their business strategies.
The funding campaign and transactions are conducted online through crowdfunding sites, often in concurrence with social networking sites. Depending on the project, campaign contributors may be essentially making donations, investing for a potential future return on investment (ROI), or prepaying for a product or service.
How Does Cryptocurrency Crowdfunding Work?
Crowdfunding over the blockchain allows people to access investment opportunities. The exciting feature of crowdfunding with cryptocurrency is that allows the investor to trade their investment immediately on the trading platform
Cryptocurrencies like Bitcoin, Litecoin supports the Open Ledger platform, a ‘peer-to-peer’ (P2P) cryptocurrency platform. It is designed for high-speed transactions with all of its capabilities built around this.
Here, the creators post their project and then canvass for funds from a community of interested people.
The startups will be able to make their own cryptocurrency to sell to fund providers.
The records of these cryptocurrency tokens will be kept a track of by the blockchain. And hence its never possible to forge and also makes it unchangeable.
The tokens thus obtained have the potential to go up in value. And these investments are called as cryptoequity.
Pros of Using Cryptocurrency In Crowdfunding
Some of the major benefits of using the cryptocurrencies for crowdfunding are:
1. Creates more gains
Most of the cryptocurrency owners are reluctant to do something important with their digital wealth and just let those coins rest in the wallet.
However, cryptocurrency crowdfunding is the best way to create an extra value of the savings and the future gains that the campaign might bring.
Initial Coin Offering (ICO) is another way for the investors to put the gains from crypto trading to work and back up a promising project featured at one of the websites specializing in token sales.
Or else, converting the profits into paper currency can turn into a tax nightmare not everyone would be willing to deal with.
2. Filling in the VC(Venture Capital) Gaps
Even the smaller projects can be moved to the next level, if they too choose to go for cryptocurrency based crowdfunding platform.
Also, cryptocurrency crowdfunding has a brighter future for campaigns that promise very little in return.
3. Creating a Strong Community Around
With Cryptocurrency based crowdfunding platform, apart from going the project live, also, the value of our own tokens grow based on acceptance.
So the benefit from it is double layered and can significantly boost the popularity of crowdfunding using cryptocurrency without much to be spent on marketing procedures, because it is channelled from user to user.
The Future Opportunity for Crowdfunding and Cryptocurrencies
Cryptocurrencies and the technologies holding them face many challenges and a long road in front before they become part of people’s everyday lives.
But as they grow in common, these crowd-based funding models seem a natural fit.
And it is the same reason why large international crowdfunding sites would choose to offer cryptocurrencies as their choice of medium of payment.
Thus it provides a cutting of the payment fees and funding in a common currency for backers in multiple countries.
As same, crowdfunding and peer-to-peer lending have also allowed retail investors to access classes and investment opportunities previously unavailable for them.
It would also make the platforms incentivised and thus would effectively help investors with less capital to invest.
This system allows small amounts of equity without much amounts of red tape and efficient record keeping of high volumes of shareholders and trades.
And this provides significant value to investors and companies alike.
Thus, the securities relying on the blockchain may therefore move from the margins to the mainstream.
Such Capabilities Include:
The data will be highly secured. No one can recognize, freeze, seize, hack or attack your wealth. Also, your identity will be safe. It can never be stolen.
Another benefit is that you can spend your money immediately and anywhere where major debit cards are accepted.
The people you authorize can see your accounts. While the exchange makes its ledgers public for transparency, you can keep yours private.
#4. Signature Accounts
This offers you to share the control of your accounts with friends, family, and business associates with complete accountability.
There is a saying that with new technologies arrives new opportunities. The ultimate box of opportunities has been open and the future is looking bright!
Planning to build a new cryptocurrency for crowdfunding? Visit us for better prospects and give wings to your dreams!
Recommended read: Top Blockchain and Cryptocurrency Trends of 2019.