FinanceBlockchain Tech Is Going To Revolutionize Investing

Blockchain Tech Is Going To Revolutionize Investing

Blockchain is revolutionizing investing one digital asset at a time. With cryptocurrencies, NFTs and other digital assets taking the world by storm, it’s open the doors to anyone and everyone with any amount of money to become Venture Capitalists. 

Kickstarter

The concept of crowdfunding hit the mainstream via a little company called Kickstarter, which, if you haven’t already heard of it, connects people with big ideas and people who want to help make those ideas a reality, and get something for their proof of conviction. People can contribute any amount they wish to help a project reach its creator’s target. If that target is reached, the creator delivers a tiered system of rewards, or incentives, such as free access to the product or service, to investors of certain quantities. 

The crowdfunding concept become a hit and took off like lightning, with additional crowdsourcing companies opening left and right, like Fundify and Patreon. Some of the projects that started as crowdfunding offerings have even developed into full-fledged corporations, like the now public company Peloton and large-scale innovations like Facebook’s Oculus VR. 

The JOBS Act

The 2012 JOBS Act introduced two new classes of offerings companies could make to raise capital, both of them allowing non-accredited investors, aka anyone at all, to participate in venture capital offerings and get in on the ground floor of private companies.

Crowdfunding Meets Investing

Now that anyone and everyone could get some skin in the “big boy’s game”, a new problem emerged. Many individual investors, or “retail” investors, lacked sufficient funds to purchase an entire asset, like a share of stock. They could, however, afford to purchase portions of a full asset, and, applying the concept of crowdfunding, they could do just that. 

Equity crowdfunding platforms started up, like SeedInvest, WeFunder and Republic, and eventually even major brokerages started offering “fractional shares” of stock and other investable assets. By the end of 2021, this new form of crowdfunding has generated over $1.1 billion in raised capital, with experts anticipating that amount will double in 2022 alone. 

Blockchain Harnesses Crowdfunding

The advent of blockchain technology has allowed investors to harness the power of crowdfunding to invest in digital assets like cryptocurrencies and NFTs. Through blockchain, an investor can own fractional shares of a digital asset where that ownership will be securely and permanently recorded and tracked. Investors can then watch it grow (or decline) by the same percentage as a full share of the asset.

DAOs: Kickstarter Harnesses Blockchain

Taking crowdfunding back to its roots now, Kickstarter, itself now a major corporation, has announced that it’s shifting to entirely blockchain-based platform. That will allow Decentralized Autonomous Organizations (DAOs) to make crowdfunding offerings for such assets as shares of ownership of a major work of art or piece of historical significance or access to a premium service, like timeshares or a country club network. 

With this shift, instead of simply the promise of an incentive if an offering is fully financed, an investor can own a guaranteed store of value in the form of tokens, cryptocurrencies or NFTs linked to genuine real-world investments. 

Also Read: A Brief Discussion About Blockchain Technology Of Bitcoin

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