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How Bitcoin and Blockchain Are Changing Crowdfunding

Blockchain technology is quietly disrupting many industries. Just as in the internet's earliest days, it’s happening without a lot of fanfare. But momentum is gathering, particularly in the area of business fundraising. Bitcoin and blockchain technology are creating new and interesting opportunities in crowdfunding.

What Is Blockchain?

Traditionally, spreadsheets—much like transactional ledgers—exist in one place at a time. They might be on a person’s computer, or even stored on the web in an application like Dropbox, but they never exist in more than one place at once. Changes must be distributed efficiently to all relevant parties.

Google Sheets, on the other hand, are accessible in multiple places at the same time. They live in the cloud and everybody who has access to them can see any changes that are made in real-time.

Blockchain is more like Google Sheets than a traditional spreadsheet, but with added security. Unlike Google Sheets—which can be edited by anyone with access—once an entry gets made in blockchain, it is distributed over a diverse network (somewhat similar to the way Google Sheets works) and gets locked in. The entry can’t be changed once it resides in its particular block.



Why Traditional Business Funding Is Hard to Get

Most traditional business funding takes one of three forms: self-funding, bank funding, or venture capital.

The problem is that for most people, self-funding is incredibly limited. Bank funding requires having an existing business with good revenues and cash flow. And venture fund capital nearly always requires a product or service that has mass appeal.

This makes traditional funding very limited and hard to get for newer businesses. It can inhibit growth even for products and services with huge potential.

Blockchain or Bitcoin Crowdfunding Could Be Disruptive

Because blockchain makes the funding process safe and offers completely transparent access from anywhere in the world, crowdfunding platforms that use blockchain can help to maximize the success of a project.

There are several ways blockchain and Bitcoin crowdfunding are being used to help fund businesses.

Infrastructure to Facilitate Bitcoin Crowdfunding

Blockchain technology is fairly new. Bitcoin was launched in 2009 with the very first blockchain. Because the market is not yet mature, creative and interesting structures are still being built to take advantage of it.

Open Ledger is one of many projects that use blockchain technology within the field of crowdfunding.

Open Ledger operates like a stock market for crypto equity. Companies can release an ICO through Open Ledger to raise funds and then this crypto equity can be traded on Open Ledger. Let's look at how this works in a real-life situation.

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Comments

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