The value of an idea lies largely in its execution. This is because it requires effort and knowledge to transform the idea into something that people can use, and both are costly. Crowdfunding has recently become a popular method for transforming concepts into reality. Perhaps the most famous example of this is Kickstarter, which has allowed entrepreneurs to raise capital without depending on banks or traditional lenders. When combined with cryptocurrencies, a new fundraising method has emerged, which is the crowdsale.
While crowd sales are similar to crowdfunding, there are a number of distinct differences. For instance, crowdsales do not presell items, nor do they make promises to place your name on the credits of a film. Rather, they give you a stake in the project in the form of a token. These tokens play a key role in emerging cryptocurrencies. They are similar to Bitcoin in that you can’t physically touch or store them, but they function as a type of digital record which can be stored on your computer or smartphone.
Tokens are created in a manner where you can join a project that is in progress, which will be launched due to the crowdsale. Based on the product or service that the project will provide, the token will function as a type of ticket which provides access to it, and are basically a form of currency that is designed for a specific product.
The main advantage of a crowd sale is that it raises the needed funds for project development. It allows the developers to be paid while ensuring that investors who fund them have a stake in the outcome. In the past, startups and entrepreneurs were heavily dependent on banks or angel investors in order to finance their work, giving these lenders extraordinary control that could sometimes lead to conflicts.
It also created an environment where promising ideas never saw the light of day simply because the lender was too shortsighted to visualize the outcome. With crowd sales, startups and entrepreneurs depend on the public rather than a handful of wealthy investors or banks. It can be used to gauge interest in a project, to determine if there is a demand for it before time, resources and energy are invested.
The most impressive aspect of crowd sales is what happens with the tokens once a project is successful. Usually, the tokens will be purchased and made available on the market, and will generate market value which is separate from the application that they were applied to. Crowd sales level the playing field and allow those with limited funds but great ideas, talent and a strong work ethic to produce valuable goods and services for the public.
The crowd sales that we design at Blockchain Developers will help startups generate the funds which are needed to complete their projects. They are comprehensive, demographically targeted, and utilize the most cutting edge Blockchain technology. Contact us to learn more.