Blockchain Technology & Crowdfunding
Blockchain technology is revolutionizing a ton of industries and is disrupting the world as a new form of currency. There are thousands upon thousands of different uses for Blockchain technology from stocks, a new way of banking, and even black market deals. People have taken notice of the new emerging technology and in one way or another have implemented it into an also somewhat new way of funding companies: crowdfunding. So how does this process works?
Read also: Revenue vs Reward based Crowdfunding
How does it work?
Cryptocurrency, the currency that is mainly used with blockchain technology, is unforgeable and harder to be stolen than paper currency. Alike to buying stocks in a company, startups have the ability to create their own cryptocurrency; this currency can rise and fall depending on the company's performance. Unlike traditional ways of platforms like Kickstarter where funders wouldn't get anything in return (except for a few hats and samples of the product) companies can now sell their own cryptocurrency to backers. This means that there can finally be some sort of reward for the investment of backers money. These investments, or Crypto equity, can make some of the backers a ton of money and possibly make them rich. Which is why many startups are now adopting this wave of crowdfunding into their company.
Even though this new revolutionary way of crowdfunding is currently the trending topic and have everyone head over heels for it, there are some aspects that still needs working out. One of these cons is the randomness of cryptocurrencies prices for example Bitcoin and Ethereum. Cryptocurrency prices are primed for overnight spikes and drops which make it unreliable. However, the price spikes can increase the value of the cryptocurrency by nearly 600%. Meaning that backers can literally make over $400 in their sleep in the moment of a big purchase or your company value increase. Then again, backers could possibly lose all their money in one night just from one bad mistake with your company. Unlike stocks, there aren't any financial advisers, yet, so you have to make most of these decisions on your own. This can lead to very quick and impulse selling.
Blockchain technology is the most secure form of payment ever. It allows both the investor and company to profit from an exchange. This is excluding the thousands of new companies that will emerge offering new and exciting services incorporating Blockchain and crowdfunding technology. No longer will you have to pay a small % fee of your money when you can simply pay a small % of your very own cryptocurrency. Companies like Kickstarter and Indiegogo will actually profit from this innovation. Instead of losing money from not taking a percentage, Kickstarter and Indiegogo can actually gain money from all of the different cryptocurrencies from different Kickstarter. It can be a wise investment these cryptocurrencies that these companies can create is unlimited, (for now), this can lead to up to million dollars of profit for these companies.
The future is near.
Blockchain technology and the implication of blockchain applications in crowdfunding companies can change the industry forever. This can lead to a new gold rush of investors and probably a new tech bubble. This new exciting method of crowdfunding is coming really soon with companies already implementing this tactic and finding success! This can very well change the course of investing forever.
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