Blockchain crowdfunding: Does it work?

Dec 26, 2020
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          Whenever we start anything new, a new platform or some innovative creation or new technology the first answer that arrives for practicality is “Does it work?” And it is a legitimate question knowing that the market is full of proposals and ideas but many never reach the final purpose of being actually useful for people. The same happens to the crowdfunding, particularly based on the blockchain and token creation. Because it is new, and because blockchain crowdfunding is a new concept, many wonder if they should really change their previous all known platforms to try something new because they are concern whether it’s useful or not.

But well, we can just meditate a bit about how things were in the past. Previously, if a person had a project in mind and needed funding for it, the options they had were asking for a loan or getting a grant through friends and family. But today, crowdfunding has become one of the best alternatives for project's financing, for the simple reason that it actually does work and it continues to do so.

“Today, crowdfunding has become one of the best alternatives for project's financing, for the simple reason that it actually does work and it continues to do so.”

The Internet has changed the way in which people get monetized and have access to the support of a worldwide community. But not only that, the technology itself keeps developing, and the method keeps changing and improving. With the creation and introduction to the world of blockchain technology many where areas affected positively that including crowdfunding with the creation of tokens and personalized digital coins. This means, of course, that blockchain technology isn’t meant to make crowdfunding difunctional but to make it more useful, more secure, and more reliable, in other words, it’s up to work even better than it did before.

Why is it helpful? The contrasting truth.

          Taking the change to talk about why is it helpful, we should give some contrast to how blockchain crowdfunding through digital coins work and how a normal crowdfunding platform works, the process would be as follows.

The creator sends his or her project: After the creator has elaborated the description of his project and it’s ready to submit, the project is sent to the crowdfunding platform and is added as a candidate for funding. In the case of platforms like MintMe once you have created your token you can start your campaign the very same day.

Evaluation of the project: The crowdfunding platform evaluates the project and the possible types of crowdfunding that the project may have. In this stage also the platform revises the project and takes the authority to select if they are eligible to make a campaign, which means that not every project happens to pass this stage. As for crowdfunding through token creation, the project earns reliability thanks to the community that can participate. People themselves can check the information and trust such projects and supporting them. Once someone has given their support all transactions are recorded, and those coming after them can check it and get a sense of security.

Publication of the project: usually if the project is approved, is published on the crowdfunding platform, leaving a period of time in which the financiers can invest in it or support it through the different types of crowdfunding available. With the creation of custom cryptocurrencies people have the chance to use it in very diverse ways, whether to simply receive support from people, or to give them as gifts to fans and followers, or use it to get paid for a service or personal creations, and as said before, this process can be immediately after creation, you can set your profile and information and start promoting your campaign right away.

Closing of the campaign: For normal crowdfunding platforms this is the moment when the established period ends, the project is closed and the reliability of the financing is checked. However, crowdfunding though digital coins don’t have to have a dead line, you can set the release of your tokens from 1 to 50 years, which means that your campaign can last as long as you want it to, being able to withdraw at any point, taking advantage of the market fluctuations and the progressive success of your project.

Does it really work?

          Crowdfunding has allowed society to choose the projects to be carried out, the steps to be taken, where to deposit the money, and which projects to support, but new ideas such as MintMe the crowdfunding platform, brings a new perspective to crowdfunding, allowing supporters to earn on the success of the projects they have helped finance. If before it was only invested in companies that already existed, now it is invested in ideas. From social projects, through investment in the real estate market or in works of art.

This model is a market of ideas where the user decides what to buy. The more ideas there are in this market, the more business opportunities there will be and the more cultural, economic, and social diversity will be enjoyed. The openness and equality in opportunities are huge, there’s no doubt that crowdfunding is just starting to get good.

“With the creation of custom cryptocurrencies people have the chance to use it in very diverse ways, whether to simply receive support from people, or to give them as gifts to fans and followers, or use it to get paid for a service or personal creations...”

Many are those who need help, as for the creator of the project, the benefit is to be able to carry out the project for which he did not have his own resources and which he probably would not have been able to carry out through traditional bank financing, and not because of blockchain and token creation the process can be done in a more reliable way and offering very different and new features that can ease up the process and increase the chances of success. As well in the case of humanitarian projects, the benefit of crowdfunding for this type of cause is very evident, since here we are not asking for project funding, but for donations to support the charitable cause.

As for artistic projects, which in many cases are of dubious economic profitability, also benefit from crowdfunding and would not be able to be implemented without the support of their fans. This also happens in projects of a business nature, where the risk criteria of the banks would hardly finance risky projects. Even now artists of all kinds have taken the liberty of starting their own campaigns to receive support from their followers.

The cherry on top for MintMe though, is that we could say that the supporters get a reward related to the achievement of the project itself. This goes further from the simple moral satisfaction of having supported a good cause, through the receipt of some kind of product or promotion, but to financial compensation from the economic benefits of the project, through token trading.

Mary Schwartz