BoomStarter is a veteran crowdfunding platform that is set to disrupt the crowdfunding industry by leveraging the power of blockchain technology. It seeks to provide solutions to what it describes as a highly underserved industry that has yet to tap its fullest potential due to several barriers that have served as major pain points for capitalists, investors and project owners alike. Its blockchain-based crowdfunding plaform is BoomStarter.Network. To fully understand what BoomStarter is and what exactly it brings into the table let us first discuss what crowdfunding is and what challenges it faces.
What is crowdfunding?
Crowdfunding from the name itself we can infer that it is an activity where a “crowd” is “funding” a certain initiative. This initiative can be anything from funds needed to publish a book, a donation to help a cause or an additional capital to fund a new or existing business venture. It can also be defined as an activity where small amounts of funds are contributed by a large number of individuals to finance an initiative, activity or business venture. It must be noted that certain restrictions apply in some types of funding activities.
Given the vast variety of crowdfunding initiatives, there have been efforts to classify the different types of crowdfunding based on the expectations of investors and the responsibilities of project owners. These are not set in stone but will give you a good idea of how this industry works and how the various participants interact.
Types of Crowdfunding
The first type of crowdfunding is the donation type of crowdfunding. Generally speaking, supporters of these projects do not expect anything in return for their donations. Project initiators are usually not expected to reward or give anything back to the donors. They may, however, promise supporters regular updates on how the funds were used. This type of crowdfunding is typically used to ask financial assistance for charitable causes which include medical aid, disaster relief or economic assistance.
Another type of crowdfunding is rewards-based. Supporters of such an initiative are incentivized to participate by expecting something in return for their contribution. Typically the amount of expected reward is proportional to the total amount of contributions. Rewards take the form of a service or a product that the project produces. A good example of this type of crowdfunding would be published books. Those who contributed may find themselves rewarded with advance copies of the book and those with higher contributions may receive signed manuscripts
On the other hand, there is a type of crowdfunding wherein business owners are able to sell parts of their company to interested investors. This is called equity-based crowdfunding. Investors become shareholders in the business which are expected to get some form of revenue from there investments. This is a way for small businesses to raise capital without shelling out additional expenses just to comply with regulatory requirements of other more traditional capital funding mechanisms. It must be noted that the current iteration of BoomStarter.Network will not support such type.
The fourth type of crowdfunding is what we call debt-based. This type considers all contributions as loans that are expected to be paid within the time frame agreed upon. Contributions may bear interest or not depending on the agreement between contributors and the project owner. This is an efficient and cost-effective way of attracting fresh new capital into small businesses without having to go through the oftentimes stressful and convoluted process of bank loans.
The last type is Royalty-based crowdfunding. As the name implies contributors are given royalties when the projects start earning revenues. This is almost the same as equities type but it does not make participants shareholders of the business. They are only entitled to royalties of the specific project of the business. Game apps are good examples of this from independent game developers which have been crowdfunded. Those who participated in funding are entitled to the generated revenues of the game.
The Main challenge of Crowdfunding Industry
Crowdfunding has been proven to be an effective mechanism to fund ideas, initiatives, projects, and businesses. It has been so effective that the demand for crowdfunding platforms has been on the rise for quite some time now. In fact, in 2017 the crowdfunding market increased by as much 49% globally. The main challenge now is how to keep up with its demand and more importantly, how the crowdfunding industry can innovate to make crowdfunding more inclusive, fairer, efficient and cost-effective.
At the same time, the industry should be able to breakdown barriers that have been serving as bottlenecks; slowing down innovation, participation, and realization of projects. Projects, that can potentially disrupt whole industries, create new ones or even present unique solutions to persisting world problems. There have been many successful crowdfunding platforms such as Kickstarter, Indiegogo and GoFundme which have been instrumental in the creation of many innovative initiatives. Despite being enablers of innovation, they have failed to innovate themselves to cater to changing needs and demands of the industry.
One of the reasons for the profound impact of crowdfunding in the capital funding industry and the massive surge of its demand in recent years can be attributed to the maturation of the Internet. Social media has helped immensely in increasing awareness about its existence. In addition to this, banks and financial institutions, have embraced the internet as a viable medium for secure banking transactions that enabled users to perform online transactions. While this gave great mobility to banking customers it also carries the many restrictions and inconveniences that come along using banking services.
Coursing contributions through traditional financial institutions can result in delays, false-positive AMLA alerts, risk of refusal of services and even reversal of transactions. This also disqualifies a great number of would-be participants just because of limited banking access or unfair customer profiling. The participation of innocent citizens of countries that have been slapped with economic sanctions is also restricted. This is a heart-wrenching situation as most of the people that needed the most financial support for their idea, livelihood or business have been marginalized.
It is to our understanding that crowdfunding platforms are supposed to be venues of inclusivity, equal opportunity, and bastions of hope that will empower those that are most qualified and most in need. While it is widely known that banking restrictions are often implemented as a deterrent to the various risk associated with online transactions, they should not serve as barriers to opportunities for the common good. Through these restrictions, they have become Judge, Jury, and Executioner. We believe that the wisdom of the crowd should prevail and the power to choose should be within the reach of everyone.
Crowdfunding 2.0: Smart Crowdfunding
The Internet spurred the digital age making it possible to transmit information at the speed of thought. This made information available far and wide. Web 1.0 accelerated access to information, while Web 2.0 allowed us to interact with information and with other internet users. The next iteration of internet dubbed as Web 3.0, is still developing and blockchain technology will play an important role in its realization. Many believe that Web 3.0 will allow the internet to go beyond being just an internet of information but an internet of Value.
This will be made possible through the utilization of blockchain technology that allowed the peer-to-peer transfer of value without relying on any centralized authority. Through this technology, a whole new level of freedom in value transfer is reached, giving back the power of choice to the ordinary people. BoomStarter believes that by leveraging the power of blockchain technology and integrating it into their CrowdFunding platform may bring into existence a more equitable, inclusive, censorship-resistant and empowering platform, a more advanced platform that goes beyond what has been offered before.
Unlike many blockchain-based projects, boomstarter.network is based on an existing and thriving business. Following the success of the most popular Kickstarter website in the world in 2009, BoomStarter launched its own crowdfunding platform in 2012. Throughout its more than six years of existence, it has become a highly successful platform with thousands of projects, tens of thousands of backers and millions of dollars raised. BoomStarter has a huge user base with more than 800,000 registered users and is visited by over 300,000 unique visitors monthly. It is one of the largest crowdfunding platforms in Eastern Europe.
Never far behind new innovations, BoomStarter took notice of cryptocurrencies and immediately recognized the immense potential it could bring into the crowdfunding industry. BoomStarter.Network will leverage the power of blockchain technology through the use of cryptocurrencies, smart contracts, and crowd mining. By utilizing them, BoomStarter hopes to inherit many advantages of blockchain such as transparency, immutability, irreversibility, and censorship-resistance. This will enable them to offer an innovative crowdfunding platform that is not only secure and but a platform that cannot be controlled or stopped by anyone.
The primary currency of the platform is BoomStarter.Network’s own native currency the BoomStarterCoin Token (BC). BC is an ERC20 token, which means it was built on top of the Ethereum’s smart contract issuing platform. Ethereum network is the pioneer in smart contract technology and hosts many of the most relevant and important industry-specific cryptocurrencies. In doing so the platform has a standard currency that participants can use in the platform for payments and receive funding. Participants will be able to monitor all the movements of funds via Ethereum’s blockchain explorer Etherscan.
Recently BoomStarter and IOST joined forces to leverage each other’s core competencies. The former has a successful history crowdfunding initiative while IOST is one of the fastest-growing smart contracting platforms that has risen to become one of the Big four public chains (Ethereum, EOS, TRON). IOST is an innovator in blockchain technology being the first and only blockchain that uses the Proof-of-Believability consensus protocol that allowed it to become a more scalable blockchain than Ethereum and at the same time more decentralized than EOS, which has plagued with centralization issues.
IOST brings to the table fee-less transactions. Unlike Ethereum transactions in IOST do not require transaction fees. This was made possible through its ingenious resource allocation model. This is on top of its blazingly fast transaction speed that is around 500x faster than Ethereum. It has been reported that BoomStart.Network has started working on integrating iUSD, an iRC20 which is an IOST-based token. iUSD is a stablecoin pegged in the American Dollar that will improve transaction speed in BoomStarter.Network as well as reduce the significant risk of volatility. BoomStarter.Network has integrated with IOST and has begun accepting payments using IOST.
BoomStarter.Network will benefit from IOST’s blockchain that is more scalable for mass adoption. IOST, on the other hand, will benefit from BoomStarter’s expertise and network in Crowdfunding. Through IOST’s technology BoomStarter.Network will be able to provide a more efficient and cost-effective blockchain-based crowdfunding platform, while IOST will be able to grow its network further and have access to an existing and successful crowdfunding platform for its smart contract projects.
BoomStarters.Network Unique Value Proposition
- BoomStarter.Network is based on an existing business that has been successfully running for many years and has become one of the leading crowdfunding platforms on its territory. It is the first established crowdfunding platform to fully integrate blockchain technology into its operations.
- It has a highly competent, committed and successful management team that brings years of experience and expertise from the crowdfunding industry.
- They are able to capture a much wider market by lowering boundaries that hinder the participation of project owners and project supporters through the use of cryptocurrencies.
- The platform offers more transparency, security, and efficiency by leveraging blockchain technology.
- Blockchain-based projects are given access to traditional crowdfunding supporters that have been instrumental to many successful initiatives.
- Traditional crowdfunding participants are given several innovative tools to participate in the platform using cryptocurrencies and crowd mining.
- It provides a venue where the classical crowdsourcing fund platforms meet blockchain technology.
Without a doubt, we can confidently say that BoomStarter.Network is crowdfunding 2.0 realized! It is a perfect marriage of the classic crowdfunding platform and the blockchain technology allowing a greater number of people to get access to the much-needed capital to realize their visions, plans, and dreams. A platform that fosters inclusivity, equal access and more benefits for all. It is a bastion of unrestricted innovation where transactions are censorship-free, borderless, frictionless and guaranteed. Most important of all, it is a platform that promotes more freedom. The freedom to give and get support, thus enabling us to reach the highest and fullest potentialities of our endeavor.