Blockchain Technology for Crowdfunding

The crowdfunding industry emerged to “disintermediate” capital formation by giving backers (aka “pledgers”) or individual investors the ability to directly fund creators and entrepreneurs, providing a natural alignment with blockchain capabilities.

For example, the movie BRAID became the first major feature film to be financed through a token “crowdsale” on the Ethereum blockchain through its $1.7M campaign on Weifund.

Initial Coin Offerings (ICOs), in which companies sell cryptocurrency-backed tokens in their companies in the same manner as a publicly-traded company sells stock, are another example of blockchain-powered crowdfunding. Startups such as OpenLedger make that possible.

Individuals may soon invest in real estate using “crypto crowdfunding,” as well: Singapore-based Real Estate Asset Ledger (REAL) intends to use blockchain technology to inject greater liquidity and transparency into real estate investing.

Pledgecamp is a Kickstarter and Indiegogo competitor which aims to increase transparency (via smart contracts) and offer “Backer Insurance” by decentralizing the process. As projects reach target funding, money is transferred to a secure escrow wallet that unlocks funds gradually. Backers can see how the money they invested is being spent and can provide input about the direction of the project, e.g. voting on whether to begin a new phase of development.

Source: CB Insights

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