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How Crypto Can Solve The Crowdfunding Problem

The current crowdfunding space has a few limitations. Surprisingly, crypto can solve the crowdfunding problem to a large extent.

By Actual SimplePublished 2 years ago 3 min read
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How Crypto Can Solve The Crowdfunding Problem

Crowdfunding is a great concept in terms of supporting business ideas. There are many crowdfunding platforms that you can use to support social enterprises, start-ups, emerging companies, and many more. Considering the current situation of crowdfunding, we can observe a few limitations. However, the world is not looking to solve them using any obsolete or usual approach. Rather, people are looking towards the tech stack of Bitcoin and other crypto coins to solve this mess. In this article, we will see how crypto can solve the crowdfunding problem.

What is a cryptocurrency in a few simple words?

A cryptocurrency is a digital or virtual money without any physical existence. Although there are some cryptocurrencies with associations with credit cards which can be thought of as a physical medium but the largest market is still under a digital space. As per the above pointers, a bitcoin as a cryptocurrency is nothing but a simple digital code that is decentralized and holds a digital monetary value: similar to the normal currency which we use as issued by the government. The cryptocurrencies are, however, built to be free from government and other associations. The cryptocurrency is secured using cryptography and a technology called “blockchain”.

TABLE OF CONTENTS ​

  • What are the limitations in the current crowdfunding space?
  • How Bitcoin Can Solve the Crowdfunding Problem
  • Some Crypto Crowdfunding Startups
  • Related Articles
  • 1. What Are The Limitations In The Current Crowdfunding Space?

    The current crowdfunding space strongly relies on legacy financial institutions. As a result, we face certain limitations that can hamper the basic motive of crowdfunding.

    → Costly and hefty fee for successful projects.

    → Not accessible to everyone. Only present in developed economies.

    → Many intermediaries are involved in the entire crowdfunding chain.

    → Maximum and minimum limit of donation amounts.

    2. How Crypto Can Solve The Crowdfunding Problem

    Having figured out a few limitations, Bitcoin and other crypto coins can help us achieve a new method of crowdfunding.

    • No minimum/maximum limit on the donation amount

    People can easily transact and fund their related ideas even in the smallest bitcoin value possible. It would help raise funds for humanitarian and social causes a lot more.

    • No Unnecessary Intermediaries Involved

    As Bitcoin and the crypto world works on decentralization, we don’t want mediators in the process of crowdfunding. Moreover, no intermediary or third-party involvement will be there.

    • Accessible to everyone

    The crypto crowdfunding scheme will be accessible to all countries where people transact in Bitcoin or other crypto coins. No limitation for developing economies. If we introspect further, this actually is the real crowdfunding.

    3. Some Crypto Crowdfunding Startups

    There are around 180+ crypto crowdfunding companies that have emerged in the past recent years. I am listing the top 5 that are quite promising and are doing well.

    i. RealBlocks

    Founded in the year 2015, it lets retail and institutional investors invest and fund real estate projects. It also grabbed funding of $11M and is located in New York.

    ii. GitCoin

    It somehow relates to the awesome GitHub and is obviously related to software and technology development. We can fund issue solving, tip developers, hackathons, and also freelancers using GitCoin. It was founded in 2017 and has raised funding of $11M.

    iii. BrickBlock(Website)

    It is located in Berlin and was founded in the year 2016. It is backed up by funding of $6M. Investors can invest in real estate and ETF’s directly. Moreover, the strong merit is cross-border investments with no barriers related to paper-work or foreign exchange.

    4. Related Articles

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    About the Creator

    Actual Simple

    We write about digital marketing, business models, and startups in a simple and lucid manner.

    ActualSimple.com - Everything Is Better When It's Actually Simple!

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