While crowdfunding is considered a noble course, the current mechanisms of facilitating such services are not the best. In essence, there are significant shortcomings that make the crowdfunding process inconvenient. For instance, there are high fees involved in crowdfunding. Additionally, there are issues associated with scams in crowdfunding, hence putting your money at the risk of loss through fraudulent schemes. These are just a few concerns about crowdfunding that make the entire experience challenging for the users.
The good thing is that Bitcoin technology is here to revolutionize crowdfunding. And this is essentially a blockchain technology that allows individuals to transact using digital currency. Since crowdfunding involves monetary transactions, there are many ways Bitcoin technology can enhance the deal. A sneak preview of the Bitcoin market trends using Immediate Edge indicates that cryptocurrency is the next biggest influencer in crowdfunding.
Indeed, the current Bitcoin value has resulted from continued endorsements in different places, both individually and at the corporate level. And this means that crowdfunding entities can equally endorse the bitcoin technology in facilitating a smooth flow of activities.
If you are wondering how Bitcoin can revolutionize crowdfunding, here are some of the ways:
Ways How Bitcoin Technology is Revolutionizing Crowdfunding:
Decentralization
One of the most significant challenges experienced by startups in crowdfunding is meeting the requirements of regulatory bodies. This challenge has seen many startups fail to materialize in their crowdfunding ventures. The endorsement of Bitcoin technology in crowdfunding means that any entity has equal opportunities. And this is due to the elimination of stringent regulations from regulatory bodies. It is also notable that some of the rules applied by centralized bodies are unfavourable for existing crowdfunding entities. With Bitcoin, it will be possible for even the older entities to enjoy a conducive environment without sticking to rules imposed by regulatory parties.
Reduced Fees
In most cases, startups’ continued failure in crowdfunding results from high fees. In this case, crowdfunding applied a specific cost for any listed project. There are instances where the flat rate may apply and other cases where a certain percentage is required to cater to the project fees. Either way, crowdfunding is currently expensive in terms of the involved charges. However, this will likely change following the adoption of Bitcoin technology in crowdfunding. As much as Bitcoin technology may cost money to maintain, the transaction fees are significantly low. And this comes as a point of convenience for the users.
Mitigated Fraud
Another primary concern with crowdfunding is the startups whose generation has fraudulent intentions. There have been cases where individuals lose their money when they engage in crowdfunding under a fraudulent startup. It would not be fair for investors to stake their money only for their chosen startup crowdfunding entity to produce nothing in return. The decentralized Bitcoin technology is a robust mechanism that safeguards your funds fully. In this case, no third party can access funds since their storage uses blockchain technology, which is decentralized. Therefore, Bitcoin technology works by mitigating the risk of losing money to scams and fraudulent proceedings.
Protection of Intellectual Property
Intellectual property protection is part of the security mechanism facilitated by Bitcoin technology. Some startups lack the means to safeguard IP addresses, which is a significant risk to personal information. With Bitcoin technology, such information is secure due to the mitigation of access from third parties.
The Bottom Line
Indeed, Bitcoin technology is likely the most effective remedy to the existing challenges with crowdfunding. Ideally, Bitcoin technology has a well-developed infrastructure, which resonates with the needs of crowdfunding users. Therefore, the adoption of Bitcoin technology in crowdfunding should be inevitable.