Mintme News


Blockchain crowdfunding and utility tokens

Oct 3, 2020

The Internet has certainly opened many doors so that today the things that used to take more than one step can be done faster, or for those things that could be impossible to carry out if there was no network or internet of things technology. Large scale processes are now possible, and people itself has become a sort of network in which they all connect with each other, not only to communicate but to elaborate with one purpose, or towards the same goal. One of those things is crowdfunding and even more so the blockchain crowdfunding and the use of crypto tokens or digital coins

Blockchain has changed crowdfunding 

The technological platforms that facilitate contact between project creators and sponsors have evolved and diversified according to the procedure used for financing, because the concept of money is now different we have expected that blockchain would reach this system in one way or another. We can find different websites specialized in donations, loans, contributions in exchange for company shares, or product-related rewards, yet it demonstrated to be poorly enough and there had to be a way in which people could feel they have a higher sense of security and the possibility of return. 

Whenever a person got started in the world of crowdfunding it was said that they needed to be over the edge, that only truly innovative projects (new gadgets, apps, technological products, or products with potential global users) or niche projects such as scientific, supportive, ideological projects would have success while more classic ones, such as music albums, books, short films or events, or personally motivated campaign would have it more complicated if they don’t show to be super “wow”.

The years 2012, 2013, and 2014 were barbaric years of crowdfunding indeed. That's when platforms like Kickstarter were catapulted and the mechanics of crowdfunding became massive and open to the general public: everyone started to know about it, and many projects were excited with the idea of crowdfunding, yet, times has changed and crowdfunding has developed into something new, which is what we now call blockchain crowdfunding. 

"Now when people start a crowdfunding campaign they also become token creators, as a way of issuing their own money and allowing people to hold something of value: utility tokens."

Blockchain crowdfunding is showing now a different face of the possibilities of crowdfunding through the web. Maybe there is a certain perception that the great moment of crowdfunding has passed, but that is the case for the more generalist crowdfunding meanwhile interesting projects as well have moved to different paths: To the tokenization of projects and overall crowdfunding with cryptocurrencies. A look at the level of Google searches for the last ten years confirms the suspicions that crowdfunding now has turned to be in relation to the boost of cryptocurrencies as a means of monetization. 

Tokenization for everyone 

Crowdfunding has as its main objective to collectively finance a project between people who want to support the cause or business. In order to get funding for such projects, the entrepreneur, or creator must send them to the crowdfunding platform. Then they must fulfill a series of steps to be able to publish the crowdfunding campaign and get visibility. 

This is the most basic concept for crowdfunding that we have seen since the beginning. But now tokenization has changed the rules for the creation of campaigns and it has given people new features to extend their expectations and reach a global audience. Now when people start a crowdfunding campaign they also become token creators, as a way of issuing their own money and allowing people to hold something of value: utility tokens.

Utility tokens (different from securities) are tokens that despite holding value are not translated as shares of a company or project. When a person becomes a token creator he can offer people goods and services attached to the tokens their clients-supporters buy from them. In contrast to other methods of crowdfunding and even from other blockchain crowdfunding methods, using tokens adds a very innovative feature to the map: people can now become token traders and get monetized. 

Blockchain crowdfunding with MintMe means that people won’t only create the usual campaigns to fund their projects but they will also be able to offer their supporters the opportunity to earn as they become token traders. 

Mary Schwartz