Proceedings of The 4th International Conference on Management, Economics and Finance
Role of Blockchain Technology in Crowdfunding (International Banking and Finance)
Atluri Divija Choudary
Crowdfunding is a new and innovative method for funding various kinds of ventures, wherein individual founders of the ventures can request for funds. The ventures may be working for profit motive, cultural or social. The funds are usually given in return for future products or equity. It includes the use of internet social media platforms to connect investors with entrepreneurs in order to raise capital for various kinds of ventures in return for compensation.
In this paper, I shall draw a clearer picture of the nature of crowdfunding through a thorough analysis. It aims to conclude that crowdfunding projects usually either succeed by slender margin or fail by a huge amount.
New technology and innovation always make a huge impact on humans and the society. With the emergence of new technology, it definitely will impact the existing ones.This transformation can definitely be seen with crowdfunding.
In this paper, I shall walk you through the role of technology in crowdfunding and the impact its creating on the conventional practices
Looking back into the history, conventional practices like raising money through small loans to poor families were practised followed by providing microcredits to small entrepreneurs which were unable to qualify for bank loans.
Then, internet and social media became new platforms that emerged. Social media and internet play vital role in raising funds for entrepreneurs and other non-profit organizations.
The paper shall first deal with the role of technology in crowdfunding, followed by the various crowdfunding platforms that have emerged in the recent times. We shall discuss about crowdfunding platforms like Kickstarter, Ketto, and various other platforms in detail.
To make it more interesting, I shall discuss about various ventures and projects that have raised capital through crowdfunding, including whether they fall under success or failure stories.
The number of projects being launched through crowdfunding platforms has increased significantly. However, from the aforementioned examples, we understand that it is important for the entrepreneurs as well as stakeholders to maintain transparency, credibility and also understand the legal and regulatory framework behind the project.
Stakeholders would usually like to track the way the organization is working, and be a part of the same, provided financial information is 100% transparent.
Blockchain technology ensures the same. Blockchain is a unique, independent and a transparent system which keep the transactions between parties transparent. Though, its not a very familiar technology, but it can definitely be of help specially in the ventures that have crowdfunding as their source of finance. Crowdfunding is based on the trust between the investors and stakeholders. In order to eliminate any kind of uncertainty with respect to utilization of the funds, blockchain technology is the way.
Give Bytes is the first Crypto-mining crowdfunding platform that enables customers who face financial barriers to donate as well. The customers for the same are required to have access to a computer, and the unused computing power shall be donated to raise funds for a campaign. Through blockchain technology, Give Bytes allows the computer to ‘mine’ cryptocurrency by just a click.
Crowdfunding is emerging as one of the most affordable and viable options for young entrepreneurs in the country. The emergence of new technologies has great potential in crowdfunding organizations as well as individuals. Crowdfunding platforms using the blockchain technology increase the credibility of various projects and ventures and therefore attract huge funds from investors and donors.
keywords: Crowdfunding, Blockchain Technology, Synergy, Smart Contracts.