Crowdfunding has been growing in popularity and along with this trend new platforms are being launched to get in on the action. Entrepreneur and software developer Joel Dietz took a look at the different crowdfunding platforms and thought, “Wow, I can do this so much better.” So, he created Swarm, a decentralized crowdfunding platform that allows startups to issue their own digital currency, or cryptocurrency, in order to raise funds.
Swarm is based on Bitcoin 2.0 technology. It is important to differentiate between bitcoin as a currency and bitcoin as an application platform. The bitcoin protocol makes it possible to transfer property rights (such as shares, digital money, etc.) without the involvement of a middleman such as a government, bank, or in this case, a crowdfunding platform. By using the bitcoin protocol, Swarm eliminates the need for platforms like Kickstarter or Indiegogo by allowing users to set up their own “digital wallet” to invest directly into startups.
With this platform, Swarm aims to revolutionize the investor/startup relationship. Dietz spoke to us about how the vision of founders often becomes diluted by the demands of their investors to make a profit. He designed Swarm so that the users of a product could also become its investors, which he hopes will grow a strong community and user base for Swarm-funded startups.
To give you a short insight into how this might work, the first project up on Swarm will be in cooperation with a company linked to SpaceX to crowdfund nanosatellites. The project will issue coins that will each represent one nanosatellite. Your purchase of one coin will mean that you are entitled to your own nanosatellite. This coin is transferable and tradable.
If this new concept has you scratching your head, you are not alone. Dietz admits there is a large gap between the bitcoin community who understand Swarm and others to whom it is still unclear. He tells us that his mission is not to educate people on bitcoin but rather on the platform itself. In the coming months, it will be up to Dietz and his four person team to explain to a wider audience what Swarm is and their vision for how it can disrupt the crowdfunding industry.