Crowdfunding platform Kickstarter announced their plans to build a new decentralized crowdfunding platform that utilizes cryptocurrency and blockchain.
As the cryptocurrency market cap has been trending upwards for months, blockchain’s current popularity means that Kickstarter will undoubtedly benefit from the hype associated with riding the crypto wave.
Kickstarter has been around since 2009. As a company looking to innovate, its not surprising that they’ve chosen to build upon blockchain and crypto.
It is surprising to hear that the new platform will enable Kickstarter to function as an independent organization.
Significance of building a protocol
Kickstarter is not simple re-building their company on top of blockchain technology. The company is building a protocol, on which many future projects and companies may be hosted. This company is 100% distinct and separate from Kickstarter; however, given the affiliation between Kickstarter and their new protocol, Kickstarter will be the FIRST project built on top of the new protocol.
The exciting thing is that once completed, other companies may leverage the same protocol to enable crowdfunding.
Over the history of the internet, many researchers that have innovated and created some of the net’s most impactful protocols have received little if any financial gain from their work (HTTP or TCP/IP, for example).
The problem with this lack of incentive is that it discourages researchers from innovating on existing web protocols and making the internet better. With blockchain, this incentive structure changes.
Tokenization of protocols enables these researchers and creators to maintain direct financial ownership, incentivizing them to continue building and improving upon them.
Kickstarter selects Celo Blockchain
Kickstarter reportedly selected Celo blockchain because it is “carbon neutral”, and more environmentally friendly.
Celo enables the creation of decentralized applications, or dapps.
Celo blockchain is built on top of the ERC-20 technical standard, and leverages the Solidity programming language. This means that Celo runs on Ethereum.
Our take on Celo: With Ethereum’s strength in security and decentralization, Celo effectively borrows these components from Ethereum, while building on top of it and optimizing for scalability and carbon neutrality.
How is Celo a carbon neutral blockchain?
The criticism of some blockchains like bitcoin and ethereum include the fact that the servers that verify the transactions use a lot of energy, which is supplied by coal-burning power plants via the traditional power grid.
This is no different than the electricity used in homes across the United States, or the servers at an Oracle data center. As a society, we still largely use non-green sources of energy.
Its always exciting to see companies that dedicate themselves to building while ensuring environmental sustainability.
I’m not 100% sure how Celo ensures their energy is green, but a few possible ways might be to ensure the energy is produced by solar, wind, hydro, or nuclear. Other possible ways include purchasing carbon credits, or planting trees.
Backlash from users
Somewhat surprisingly, the responses on Twitter from users and self-reported “backers” have not been positive.
With over 1000 replies on Twitter, many user comments on their post are concerned that the majority of value associated with a crypto-based crowdfunding platform will go to investors, rather than creators.
It will be important for Kickstarter to demonstrate their commitment to ensuring the actual creators are able to capture significant value, not just crypto investors.
What’s next for Celo and Kickstarter?
Kickstarter plans to launch a whitepaper in the coming weeks to describe the technology and plans for the decentralized protocol that they will build.
In the meantime, we’re keeping up with the latest on Celo as a member of the Celo community Discord.
Thanks for reading. Reach out to us on twitter and let us know your thoughts.