Hyperbridge is currently developing BlockHub, a decentralized application development platform that wants to revolutionize the way software is developed, funded, and deployed into the blockchain ecosystem. While BlockHub’s undertaking is vast, enabling developers to easily fund their projects is a critical aspect of our mission. This article discusses why a decentralized crowdfunding model is essential to the future of the blockchain, the Internet, and beyond.
In 1997, a British rock band was able to finance an entire reunion tour solely through online donations from their fanbase. With a total of US$60,000 raised in the campaign, the band went to use the same method to fund their subsequent studio albums. What the band did not know at the time was that they were pioneering a new fundraising model. The first successful online crowdfunding campaign went on to inspire thousands of similar endeavours and paved the way for millions of people to successfully fund their own projects, a process empowered through the connectivity provided by the Internet and subsequent technological advancements.
In the United States, crowdfunding would steadily gain popularity with the launch of ArtistShare in 2003. Starting as a platform for musicians to collect contributions from their fans, ArtistShare went on to become an entirely new type of business model for photographers, filmmakers, musicians, and videographers to fund their projects. The launch of Indiegogo and Kickstarter in 2008 and 2009 respectively, added yet another major milestone to the crowdfunding landscape. Crowdfunding had swiftly evolved from platforms supporting the struggling artist into ecosystems funding everything from video games to automobiles to blockchain startups that are currently worth billions.
By 2015, crowdfunding is envisioned to become a $93 billion industry. But those of you who have never crowdfunded a project or ever invested in one, might be wondering:* what exactly is the appeal of funding a project or pursuit via a crowd?*
Let’s look at some benefits of crowdfunding:
i) Funding throughtraditional means can be a long, tiring, and often fruitless endeavor. Crowdfunding provides an opportunity for projects that might not ever catch the attention of conventional investors. Furthermore, crowdfunding allows startups to validate the viability of their ideas and consumer test prior to their product hitting the market. In addition, it is possible to convert investors into loyal customers by offering them additional bonuses or incentivizes to getting in early on a crowdfund campaign.
ii) Increased marketing due diligence
As noted by Luik Westermann in the Over-Fired Broiler (OFB) crowdfunding campaign, fully funded on Kickstarter within 10 days to the tune of $102,000, “Crowdfunding this project created the opportunity for consumers to purchase a product that was the original creation of our team, not a trimmed down version designed by an investment firm looking to double its money”.
But at the same time, there are also numerous problems with the current state of crowdfunding.
Trust is a major topic of concern. As observed by IPWatchdog, ideas on crowdfunding sites are often stolen by big firms or new entrants. Startups that are not able to provide decent measures in order to be trusted by investors end up missing out. Others target the lack of moderation and safety nets on sites such as Indiegogo, releasing substandard products while managing to raise millions of dollars.
A report by Pando Daily in 2014 identified a crowdfunding crusade by Healbe GoBe as having many flaws, though the campaign was able to hit a $1 million funding target.
Other issues, including compliance, accounting, choosing the right crowdfunding platform, the cost of hosting, and building interest in the project, have always been difficult to solve.
Crowdfunding found a new outfit when startups started raising funds through Initial Coin Offerings (ICOs). Since the first ICO, held by Mastercoin in 2013, plenty have taken the same path — Ethereum, Telegram, Bancor, as well as many others. The potential of ICOs has soared, especially in 2017, where projects raised incredibly large sums of money virtually within seconds. Brave, a new web browser raised around $35 million within 30 seconds, and Filecoin a staggering $200 million within one hour of its token sale going live.
These trends signal a future where cryptocurrencies and blockchain technology might drive the future of crowdfunding. With smart contracts and immutable data, blockchains will be able to build trust between contributors and projects with nothing more than the technology underneath.
The ability for crowdfunding platforms to use their own cryptocurrencies helps mitigate costs associated with hosting crowdfunded projects. While traditional platforms may charge up to 10% in fees, without the conventional “middle man”, blockchain platforms offer far more flexibility, transparency, and inexpensive ways to get the same job done.
Blockchain technology enables anybody anywhere to participate in a crowdfunding campaign. With a borderless interface, the opportunities of investing are limitless.
Finally, the immutability of the blockchain will help secure the ideas of startups going through the crowdfunding phase, forever linking projects with the rightful authors. The blockchain will also help build secured systems that provide protection for the investor’s data.
A platform for developers to build decentralized applications can’t be considered complete without a way to fund the development of those applications. Which is why BlockHub will not only enable developers to develop and deploy state-of-the-art decentralized applications but will enable them to easily and securely fundraise their projects from a pool of engaged supporters. .
BlockHub will unite cutting-edge application development tools with a large and supportive community of users to enable developers to focus more on their innovations instead of being concerned about getting off the ground, due to funding troubles and financial sustenance concerns. The future of the Blockchain, after all, is the hands of its developers, and we want to make sure that the best and the brightest have access to the capital and support necessary to succeed and thrive.
Crowdfunding & Voting Function
One of the core functions of Blockhub will be the ability for developers and studios to crowdfund and launch their games and projects. Developers will have the option to submit a fundraising application in order to raise money for their applications or projects by setting up a smart contract that stipulates a specific development trajectory in exchange for contributions to the project from the larger community. All of the money raised will be held in tranches until specific development goals are reached. If funds are not needed or if developers do not meet their stated aims, then funds will be returned to the contributors.
This is a similar process to that of established crowdfunding platforms, like Kickstarter; however, due to the decentralized nature of Ethereum, processing fees and third party rules have been eliminated.
Our mandate is to empower creators, and through blockchain technology we are building decentralized protocols and an easy-to-use digital distribution platform to do just that.
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