Bitcoin is not just a protocol or money, it’s a new business model for Open Source Software. Prior to Bitcoin, you had to raise money, write software, distribute your product, build a business model, and work towards liquidity. Angels, VCs, salespeople and bankers guided you the entire way, through a maze of tolls and controls.
The Bitcoin model for crowdfunding dispenses with everything except the software:
- Write software to power a completely distributed network in which any node can participate anonymously.
- Allocate scarce resources in the network using a scarce token – an “Appcoin”. Users need this Appcoin to use the network. Owners of scarce resources get paid in Appcoins.
- Pre-mine or early-mine Appcoins and keep some non-threatening amount. These are shares of your company, equity that will appreciate in value if the network is adopted.
- Give network operators the ability to collect new Appcoins in proportion to their contribution. Route a small fraction of each transaction output to the developer foundation (Mastercoin does this). Theserevenues are used to pay for operations, and bounties for ongoing development.
- As network usage increases, so does equity value and revenue.
- Anyone can buy Appcoins, anywhere, anytime, anonymously. Ship your code, ring the IPO bell.
This is true crowdfunding – get funded by your users in proportion to their usage. Reward early adopters, network operators, and developers with upside.
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