Some projects have had difficulty raising money through crowdfunding, but bitcoin may provide a solution.
By using crowdfunding, you may help support projects, non-profits and individuals who are working on new concepts by donating money. This includes cryptocurrencies like Bitcoin and Litecoin or LTC. Innovating and supporting social enterprises can benefit greatly from this strategy. As Kickstarter and Indiegogo have not slowed down. In recent years, crowdfunding has launched billion-dollar internet enterprises and facilitated millions of dollars for hundreds of causes.
Using crypto crowdfunding, people and their ideas may be brought together in a new way. Because crowdfunding relies on existing financial institutions, it excludes the vast majority of the world’s population. The existing system has numerous benefits. However, it used an old and fragmented economic infrastructure that is costly and difficult to use.
Only 30 nations have access to the majority of crowdfunding platforms. Due to the large number of intermediaries involved, crowdfunding in this network is now prohibitively expensive. The typical cost charged by a successful crowdfunding platform is 7 percent. Could the high transaction fees of cryptocurrencies defeat those of their established rivals?
Cryptocurrency and Crowdfunding
As a result of their reliance on outdated financial infrastructure, several crowdfunding platforms have struggled to succeed. As a result, some crowdfunding companies have adopted a “web 3.0” approach to their operations.
Rather than relying on Stripe for funding, Kickstarter built its blockchain-based protocol from scratch. If the platform and its users use equity-based crowdfunding, they may invest in new businesses and ideas.
An example of how these two worlds may collide is last year’s Bitcoin Smiles campaign, which raised almost 1.8 BTC. Bitcoin Smiles attempted to collect funds to provide free dental care to people in rural El Salvador who couldn’t afford it. Kivéclair, a development project in the Democratic Republic of the Congo that teaches people about bitcoin, is another example.
Although these are just a few early examples of cryptocurrency crowdfunding, they promise both bitcoin bulls and bears.