Crowdfunding vs Blockchain Crowdfunding: pros and cons

Apr 10, 2021
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           Crowdfunding and the crypto world are too big movements (if we can call them so) that people are absolutely loving. On one side crowdfunding has given people the possibility of supporting one another through digital platforms and has created a way to allow people to practice charity and altruism. On the other side, cryptocurrencies have given people the chance to become true owners of their finances, have money everywhere they go, and have enhanced trust through the blockchain.

Now, what we call blockchain crowdfunding isn’t only the mix between traditional crowdfunding and the use of crypto coins but it’s the underlying technology that makes it possible for everybody to participate in a network that is reliable and can offer security and creative possibilities as never before.

I’d like to share with you some pros and cons, the contrast of traditional crowdfunding and the new wave of blockchain crowdfunding.

The cons

1)Risk of getting plagiarized

          One of the most “turn-offs” for many people is that if you publicize a product that is not yet in operation through crowdfunding, you run the risk that someone else will copy it and launch it before you do. It may sound like a “Nah” for a lot of people but for any startup is already enough to deal with the cost of creating an idea and try to sell it and it would be just a lot more problematic if they don’t have legal advice to patent their ideas and make sure they aren’t stolen.

2) Difficulties of marketing

          Also, you must have some marketing knowledge or someone to advise you, because you must have some activity on social networks and know them well to promote your product, service, or business and get everyone to know that you are present on a crowdfunding platform. This step is always difficult if you don’t have a special person or team dedicated to it or if you are alone trying to deal with a problem and need urgent help. Since we aren’t only talking about creating a project but even for charity, someone who is not “marketed” cannot reach as many people to earn their support.

3) Public failure and stress

          Another con to mention is the fact that nowadays especially l for startups or entrepreneurs crowdfunding is always stressful: because they depend on the financing of the users they may become obsessed with crowdfunding, spend a good part of the day checking if their income has risen or if they reached a goal. And of course, as with any crowdfunding campaign, our faces are right in front of the audience, exposed to their judgment and their critics. But overall, if something fails it won’t be a secret.

The pros

1) Give yourself the chance to succeed

          It isn’t just a dream, giving yourself the chance to create a crowdfunding campaign especially through blockchain and token creation can allow you to obtain the necessary capital to turn the business of your dreams into a reality without the need to apply for high-interest loans.

Something amazing about transacting in crypto, or crowdfunding through tokens is that you can also make micro-transactions. Small donations can (and do ) start to add up. For the audience of crowdfunding platforms, it is always easier to donate a small amount than a large one. And it is always better to give people the chance to be in liberty to give you from their hearts and let all of the small donations grow in time.

2) Increase your popularity

          If you create a token and your campaign is sailing in the public market you will know, in advance, if your project is successful or not, since you will have early donators that are convinced of your project and will give you an idea of what is good or bad and help you assess your vulnerabilities and also your good points, which will, in the end, be the key to your future success.

Cannot forget that creating a campaign is also a way to increase your popularity, because you give people the chance to know you, and you increase your exposure to the public. Furthermore, through tokens, you can also incentive people's donations with gifts or services.

3) Have more control

          One of the amazing advantages of cryptocurrencies and blockchain-based crowdfunding platforms is the fact that you have control over your finances as never before. Exchange it for other currencies, withdraw and save for the future, take with you all over the world, and have money anywhere you go. Platforms like MintMe also allow you to monitor the status of your project at all times and to know how much money you are raising every day, how many holders there are, to control your market and price, and also to interact with your supporters directly.

As you can see, crowdfunding has both pros and cons, yet crowdfunding based on the blockchain is already an enhanced version of traditional crowdfunding where more than a few advantages are added. We encourage you, if you need funding, to try it because there is a chance that you will be pleasantly surprised and many people will bet on your project.

Mary Schwartz