Wednesday, April 4, 2018

Crowdfunding with Bitcoin

Bitcoin For Dummies

Bitcoin For Dummies

Rather than relying on one  investor, or one  major source of funding, a crowdfunding campaign allows you  to decentralize the funding process by  acquiring backers and  supporters to provide money up front. By  accepting bitcoin as  a payment method for your campaign, you can  decentralize things even  further and  reach a global audience.

Bitcoin provides businesses and  individuals with a powerful tool to raise funds for an upcoming or existing project. Considering the fact that  bitcoin is not  taxable in most countries, many people view it as  a safe  haven for “tax‐free” funding.

When  you  convert the  raised funds to fiat currency, you  may be taxed on them, depending on the  amount you  receive.

When  crowdfunding, never list  a fake project or claim to do some- thing  with the  money you  never intend to fulfill.  Even though bitcoin is a non‐reversible payment method, people will  hunt you down if you  try  to run  off with their money.

Luckily for bitcoin enthusiasts, most crowdfunding projects so  far have been  legitimate, and  most have delivered on their promises as well.  Depending on what type  of project you  list, it may take additional time  to reach your goals, especially if it involves block- chain technology development.

But  not  every project is using crowdfunding platforms for the  right reasons. Some  people view crowdfunding as  a way to get some funds quickly, without ever having to pay  it back. Even though most platforms implement security against misuse, there is always a minor chance of a project not  delivering on the  promises made. But  that  has nothing to do with bitcoin per  se  — it can  happen with any type  of crowdfunding campaign. Simply look  at how many people backed projects in Kickstarter and  never received the  item  for which they pledged a certain amount. Check out for more.

Whenever you  help  crowdfund a bitcoin project, always determine whether you  are  entitled to some form  of reward. Crowdfunding is not  the  same as  buying a share of a company or product at a cheaper rate.  It simply means you’re willing to spend money in order to make  someone’s dream come true, which may or may not include a reward. However, you  should not  partake in a crowd- funding campaign just for the  reward. That’s not  why this system was invented in the  first place.

Source: Bitcoin For Dummies

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