Bitcoin 2.0 & Crowdfunding

By Amanda Cole, CrowdFundBeat contributing Guest Editor,

With startup culture on the rise and mainstream crowdfunding sites like Kickstarter still becoming more popular by the day, the idea of funding a business through the contributions of hopeful users online is still developing. While there are sound methods and proven practices in place for online crowdfunding, a lot of new companies continue to look for innovative ways to tweak these practices to provide new incentives for funders and increase growth efficiency. And one such way that some newer startups are looking to accomplish these feats is through the use of Bitcoin and its underlying technology. 

Many of these company concepts are supported by CoinFunder, which calls itself “the best way to crowdfund with Bitcoin” and includes a number of intriguing projects. They include things like Coincraft, a Bitcoin-supported Minecraft server aiming to help gamers earn money through the popular game, and Bitcoin AdGazer, a company looking to use Bitcoin funding to establish better advertising, in turn, for Bitcoin. This gives you an idea of the range of projects hoping to take advantage of the relatively new concept of Bitcoin crowdfunding in addition to the fact that most projects like this are actually company models working toward the advancement or expansion of crypto-currency usage. 

But what exactly is the point of using digital currency in crowdfunding, aside from the appeal of something new? 

While there are many budding projects like those mentioned above that specifically aim to raise funds in the form of Bitcoin, the broader appeal is in the use of Bitcoin’s technology and mining and monitoring practices in the creation of unique funding opportunities. These may be foreign ideas to those less familiar with crypto-currency, but an outline of how Bitcoin works explains that mining is essentially the creation of new Bitcoin through complex digital and mathematical means. Monitoring, on the other hand, refers to the public verification and visibility of all transactions. It’s primarily these ideas and practices that can be used to effectively decentralize crowdfunding. 

Bitcoin_7TechCrunch delved into the specifics of decentralized crowdfunding in a very helpful article written in fall 2014. The idea is presented that while ordinary crowdfunding sites force companies to rely on intermediaries (meaning the sites themselves) and incentivize contributors primarily with small gifts or marginal payouts, a platform based on Bitcoin technology can cut out the intermediary and provide more tangible benefits to contributors. The basic concept is for companies using this new brand of crowdfunding to excel by “creating their own digital currencies and selling ‘cryptographic shares’ to early backers.” 

This means that just as new Bitcoins can be created via mining efforts and purchases are monitored in a public forum, a new company looking to raise funds can create its own digital currency and allow investors to track and monitor value. Ultimately, it can enjoy the appreciation of the digital currency. It’s still a very new idea, and as the aforementioned TechCrunch article notes, most of the companies practicing actually exist within the greater industry of Bitcoin and digital currency in general. Furthermore, there remain unresolved legal questions about the idea of creating currency to dole out as equity. But for now, it’s a very intriguing branch of crowdfunding with the potential to grow into something highly influential in startup culture.

Tags: , , , , , ,


CNNMoneyDorothy's fading red slippers saved by $300000 in crowdfundingCNNMoneyThe ruby red slippers worn by Judy Garland in the beloved 1939 film "The Wizard of Oz" are set to undergo a major conservation effort following a successful crowdfunding campaign. The Smithson [...]

hypebot.comAriel Hyatt On Crowdfunding, New Book [INTERVIEW]hypebot.comArielHyattBookcaseHiRes-1-672x372 In this interview Ariel Hyatt, founder and owner of Cyber PR offers her two cents on crowdfunding and success strategies, delving into personal experience as well as offering takea [...]

AZCentral.comTiny companies lure investors under Arizona crowdfunding lawAZCentral.comWes Harrington is the founder and chief executive officer of NewSleep, a mattress manufacturer. His company has benefited from Arizona's new crowdfunding law, which allows investors to invest mo [...]

newsBTCAirbitz Launches Equity Crowdfunding Campaign To Develop New ...newsBTCAirbitz is looking to raise a minimum of US$100k during this equity crowdfunding campaign. So far, just US$2200 has been pledged.Airbitz to Leverage US JOBS Act to Raise Funding for ExpansionBitcoinist.netal [...]

BloombergCouples Desperate For Children Turn to Crowdfunding FertilityBloombergCrowdfunding has become a popular mechanism for many couples who can't afford the high costs of IVF, or adoption and surrogacy. “It's not an easy thing to share publicly,” says Crystal Barrett, 33 [...]

MarketWatchWhy a crowdfunding site is giving out $10,000 scholarships ...MarketWatchIt's another indication that families are struggling with college costs.and more » [...]

Huffington PostReal Estate Crowdfunding's Pathway of ChangeHuffington Post“Crowdfunding is just the Internet,” stated Attorney Mark Roderick as he opened last month's RealCap Chicago. RealCap is an annual conference that joins crowdfunding leaders and innovators to propel th [...]

Business Wire (press release)BizWireTV Accelerator Report: AltSchool Looks to Reinvent ...Business Wire (press release)On the latest BizWireTV Accelerator Report, AltSchool enters the next phase of its mission: to enable all children to reach their full potential.and more » [...]

Crowdfund InsiderMassive Rule 147 Amendments May Be On The Horizon Impacting ...Crowdfund InsiderAlmost a year ago, the SEC proposed certain amendments to the current Rule 147 which were intended to help foster, and increase the viability of, Intrastat.and more » [...]

Mountain XpressFaces in the crowd: WNC crowdfunding initatives | Mountain XpressMountain XpressEach week, Xpress highlights notable WNC crowdsourcing initiatives that may inspire readers to become new faces in the crowd. This week features a feature ...and more » [...]

CFB Finance

Press Release

CrowdFund Beat News

Hello @CrowdFundBeat's 17330 followers - thank you so much for following! Wishing you all a happy Monday! >>

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |