What does the future of crowdfunding look like? Let’s explore a new era of technology in the next evolution in the world wide web, called web3. We’ll see how it can affect the crowdfunding industry.
Understanding Web3
First, what is Web3? If you are not familiar, there are different evolutions of the internet. It starts with Web1.0, then moves to Web2.0, and now Web3.0. In laymen’s terms, web3.0 refers to a new internet evolving with the use of blockchain technology and other features.
How does web3 affect crowdfunding? There are changes coming to the way that administrators want to support the creators and backers on their platform. This would include the option for connecting crypto wallets and contributing using different cryptocurrencies. Kickstarter, one of the world’s largest crowdfunding platforms, has released a statement that they will be adding such capabilities in the future utilizing blockchain technology for making payments on the platform. Although it’s not available to the public yet, they plan on using Celo as their technology for the blockchain. You can find out more about why they chose this solution by reading their blog article here.
One major deciding factor for Kickstarter was the carbon footprint when using different blockchain technologies. Celo does not use the proof-of-work method for completing the transactions for each block. Many popular blockchains are using proof-of-work, which consumes a considerable amount of power to use, thus creating a larger carbon footprint. The Celo blockchain uses proof-of-stake which doesn’t consume any power to complete the block. Instead, people can stake their crypto without having to use computation from miners to complete the blockchain. This method is called proof-of-stake. More information about proof-of-stake and proof-of-work can be found here.
Kickstarter isn’t the only platform that has adopted blockchain technology. Other large and popular crowdfunding companies such as Indiegogo have also adopted this technology in the past with their own initial coin offering. Although it was a failed attempt, they may re-adopt this technology in the future.
What does this mean for the industry?
This means that major crowdfunding platforms will start implementing cryptocurrencies and blockchain technology as a potential standard in the future.
What are the advantages of using cryptocurrencies over fiat currency? For starters, crypto provides more transparency when it comes to moving funds, as you can see transactions occurring on the blockchain. Not to mention that blockchain technology is completely encrypted and is a safe network to use as long as you are using best safety practices. One of the most important reasons for someone to use blockchain technology is decentralization. The idea of decentralization is growing in popularity now with more cryptocurrencies and DAO’s being created.
In addition, it also provides more access for making purchases and accepting money from around the world. Crowdfunding platforms use payment gateways for processing payments. These gateways have limitations in regards to regions that accept accounts. So if the payment processor is not in your region, you don’t have an option to receive funding. This is a common problem for many campaign creators, which crypto can solve since anyone can create a crypto wallet no matter where you are located in the world. Once the funds are sent to the creator’s address, it is up to the creator to convert the funds into their fiat currency.
The other advantage is the low fees. There are cryptocurrencies which have little to no fees for accepting and transferring funds, whereas mainstream payment gateways are charging a percent and higher fees for each transaction. Do you want to own and operate your own crowdfunding platform?
Using blockchain technology with Thrinacia Atlas
If you want to create your own crowdfunding website, you can use the Atlas white-label crowdfunding platform. It comes out of the box with features for rewards/donation-based paradigms, but what if you want to use the blockchain with it? This is possible and has been done before using custom development. You can access the front end source code if you want to add the blockchain features onto the platform yourself. There are several different pricing options that can be used to build such a platform. You can see what Atlas is built with and how to make calls to the API by viewing the following resources:
- API Docs: https://www.thrinacia.com/faq/post/where-can-i-find-the-api-docs
- Tech Stack: https://www.thrinacia.com/faq/post/what-technology-stack-is-thrinacia-atlas-using
- Development Workflow: https://www.thrinacia.com/blog/post/new-development-workflow
If you don’t have the development capabilities, you also have the option to use Thrinacia’s developers at an hourly rate. To find out more information about development rates, please contact sales@thrinacia.com. You will need to be very specific and provide documentation, and mockups/wireframes to receive an accurate quote for development work. Without such information, the Thrinacia developers cannot provide an estimate.