Business fundraising has been bitten by the blockchain bug. In recent blockchain news, numerous crowdfunding platforms have incorporated the technology into their systems. Since the blockchain offers benefits that can revolutionise the way funding processes work, experts predict its integration has the potential to transform the industry.
How Blockchain Can Influence Crowdfunding
Crowdfunding helps democratise fundraising for projects primarily through digital campaigning. Successful efforts result in innovative products. However, it is still inefficient since central authority can give preferential treatment to campaigns that the public favours. In addition, around 78% of campaigns fall short of their mark.
Blockchain technology providers can solve this issue and more. Here are the ways the distributed ledger technology can transform crowdfunding:
- Cryptocurrency Equity Trading
Initial Coin Offerings (ICOs) are new cryptocurrency offerings on a blockchain platform. They take the form of tokens and function as a company’s shares, but without equity exchange. Investors can buy crypto assets using either fiat currency or cryptocurrency.
The value of ICOS has the potential to increase over time. This is called crypto-equity, which holds promising potential for crowdfunding campaign enhancements. With new blockchain trading platforms, collected funds are held in escrow, giving users access to them and allowing trade for fiat currency whenever necessary.
- Decentralised Crowdfunding
A blockchain-based crowdfunding platform is more efficient than its conventional counterpart. It reaches more people and is presented in a way that’s easy to market. Decentralised crowdfunding also requires fewer fees, reduces censorship on controversial projects, and enables the exchange of donor shares in linked marketplaces.
- Less Dependence on Intermediaries
With the current crowdfunding structure, agencies must help campaigners in their quest to raise funds. In contrast, blockchain-based fundraising processes seldom require third party assistance, thus reducing additional fees due to intermediaries. Most of the funding goes to the campaign itself.
- Smart Contracts for Crowdfunding
Crowdfunding is susceptible to scams. In blockchain news, a campaign did not produce a single product despite managing to raise $720,000 for over two years.
Without solid contracts and strict implementation, crowdfunding contributors stand to waste their investments. This can be solved by blockchain-based smart contracts with built-in milestones that prevent the release of funds until a campaign is proven legitimate.
Boost Crowdfunding Campaigns with Blockchain Technology
Aside from its benefits, there’s another reason it’s best to start your crypto ventures today. Many businesses are intent on launching cryptocurrencies today in anticipation of the upcoming Bitcoin halving in 2020. This means that competition will increase from here on out.
To succeed in blockchain investing, you need the help of industry experts to help you optimise your crowdfunding campaigns. The ideal blockchain and crypto broker must be able to fulfil these functions:
- Be an effective brand ambassador for blockchain-related products
- Create marketing campaigns that accurately target ICO investors
- Manage your digital assets on decentralised ledgers in real-time
Achieve all your crypto goals. Trust only a digital asset blockchain management agency with a solid background in marketing, cryptocurrencies, and both traditional and reverse ICOs.