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How does BlockChain support Crowdfunding ?

  • Difficulty Level : Basic
  • Last Updated : 17 Feb, 2020

The Crowdfunding platform in block-chain makes different possibilities for the startups by raising the funds to create their own digital currency and it is peer-to-peer fund raising model some of the famous crowdfunding cryptocurrencies are coinspace, swarm, judobaby etc. Crowdfunding has offers for creators and other consumers. Anyone can participate in this crowdfunding if they have invented any new cryptocurrency (e.g., Ethereum) and also can contribute as much as they want.

How does BlockChain support Crowdfunding ?
There are several areas where block-chain supports and improves crowdfunding, crowdfunding platforms powered by blockchain technology removes the need for intermediate third party.

  • Decentralization:
    Since block-chain is decentralized it doesn’t rely on any other platforms to create funds. for starters, no longer to be obliged to any rules and any project can get visibility and funded if the investors think to invest, eliminates fees which makes crowdfunding less expensive for the creators.

  • Access Equity:
    To provide investors equity or ownership block-chain relies on asset tokenization. For example, a person who plans to create multiple new products with the incoming funds and grant small ownerships stake in the company.This could potentially open whole new world of opportunity.
  • Universal Opportunity:
    Any project using a block-chain-based crowdfunding model can get funded. Any person with an internet connection can contribute projects.
  • Flexible Options:
    Using block-chain as asset tokenization grants creators and enterpreneurs more liberties.usually asset tokens have their own currency to enable organizations to hire professionals and advertisers.
  • Peer-to-Peer:
    The cryptocuurrencies are exchangeable on a peer to peer network.This usually help the people for their investment which even generates more interest in the entire process.
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