In recent times, the word “crowdfunding” began to spread to all nooks of the world.Crowdfunding plays a predominant and important role in the world of startups. Even though traditional crowdfunding has uplifted many startups it also has many issues regarding fund transactions, brokerage fees of intermediaries, and so on. Blockchain crowdfunding eradicates some serious issues in traditional crowdfunding and is considered to be the latest and best way for startups to approach funders and also gains the attraction of many entrepreneurs and startups all over the world. Let us discuss this latest trend in a detailed manner.
Reason for Choice For Many Startups:
Since many startups have already implemented this blockchain crowdfunding, many startups are on their way to implementing it. There are many reasons for startups to choose this blockchain crowdfunding as an alternative to traditional crowdfunding and, some of the main reasons are discussed below:
Feeless environment:
As we are well aware that most of the crowdfunding platforms in today's world mainly target profits and they do not allow you to raise funds for free. These platforms charge fees for raising funds depending on their rules and regulations. While in a blockchain-based ecosystem, public participation is involved and the decision-making process is based on all participants in crowdfunding. The end decision is finalized through the popularity that each participant owns.
Transparency in Transactions:
In a crowdfunding process, transaction plays an important and efficient role. Crypto wallets allow users to take full control of their assets. The decentralized quality of blockchain can clearly track where their money is going which is considered to be a major attracting factor of blockchain crowdfunding.
No Dependencies and genuine outcomes:
Many crowdfunding platforms are centralized, and they start to influence the projects based on the fees they charge to startups without analyzing the projects. Due to this influencing factor, many investors may doubt investing in a project. This may affect the startups severely. Blockchain crowdfunding allows public participation and comments on the originality of the project. By viewing these comments, the investors may get a clear idea of the project and its workings and feel free to invest in the project. Mainly this blockchain crowdfunding does not need any intermediaries to raise funds and the results are genuine.
Universal access:
Many crowdfunding platforms charge high fees for raising funds in their platforms, which may become a barrier for many startups to enter into the crowdfunding platform. On the other hand, a person with an internet connection can contribute to any project in blockchain crowdfunding.
Tokenization:
Tokenization in blockchain crowdfunding automates complex processes like transactions and management of shares.This in turn reduces the cost due to transaction and make the process simpler which attracts many investors. Tokenization also helps the investors to identify the original owner of shares, improving transparency which pays no way to fraud.
Smart Contracts:
Entrepreneurs and startups in blockchain crowdfunding develop a smart contract incorporating the fundamental rules and regulations regarding investment and publish them in a blockchain crowdfunding campaign. Now interested investors may start to invest based on this contract through cryptocurrency or digital tokens. Thus blockchain promotes a smoother way of contract between a business startup and an investor
It is quite evident that blockchain is creating a revolution in the crowdfunding process. After my analysis and research, I would clearly state that blockchain crowdfunding is the best solution for hurdles faced by usual crowdfunding platforms. It is well known that the future of a nation's economy is based on the growth and development of startups, hence these crowdfunding platforms should be developed securely with no issues in order to raise them. Hence it is the right time for your company to develop a blockchain crowdfunding platform. But be sure that your blockchain crowdfunding platform should be developed by a trustable and successful Blockchain development company that offers you a free demo so that you can get an overall idea of your software in order to make your dream real in this digital world
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