Crowdfunding is quickly becoming one of Bitcoin’s “killer apps”, but it’s easy to get confused when there are so many different crowdfunding platforms available in the cryptocurrency ecosystem. One of the main value propositions of Bitcoin is that it cuts out the middlemen, and there are few different projects, looking to bring that concept to the crowdfunding space. In the future, it’s possible that supporters will be able to connect directly with campaign creators rather than going through a centralised third party. Let’s take a look at some of the innovations in crowdfunding related to Bitcoin to see which option could go mainstream in the near future.


In reality, you don’t really need to add anything else to the Bitcoin protocol to use it for crowdfunding. In fact, many people are already using Bitcoin for various crowdfunding campaigns with nothing more than the version of the payment protocol that is available to everyone right now. After all, you don’t need more than a Bitcoin address or a QR code to collect funds from people who wish to support your cause or project.

Lighthouse is a new piece of software from Bitcoin developer Mike Hearn that aims to improve crowdfunding campaigns launched on the Bitcoin protocol. The concept is rather simple, and it uses assurance contracts to bring added incentives to possible campaign contributors. These contracts allow donors to support a certain project without having the funds taken out of their Bitcoin wallet until a certain amount of money is raised by the campaign creators. For example, if someone promises to make an upgrade to the Bitcoin protocol in exchange for a certain number of bitcoins, the funds raised during the crowdfunding campaign won’t actually be sent to the creator of the campaign until the funds target has been met. It means that contributors do not have to worry about donating to a campaign that never actually gets started.

Although the early use case for Lighthouse will be for crowdfunding development of the Bitcoin protocol and other Bitcoin-related apps, there is no reason that it couldn’t also be used for anything from collecting funds for a party to supporting a political campaign.

Colored Coins

Colored coins are a twist on the basic concept of raising funds with Bitcoin in that a new token can also be created during the fundraising process. While this option won’t make sense for all crowdfunding campaigns, there are certain situations where it could make sense to hand out tokens to people who donated to a certain project or cause. The tokens could then be used to prove that a certain individual donated to the cause, and they could even be used to vote on specific aspects of the project before it goes into the development.

The tokens created through the open assets protocol are placed directly on top of the Bitcoin blockchain. At the end of the day, Bitcoin is simply a system of proving ownership. At the base level, it allows individuals or groups of people to prove ownership of bitcoins, but those bitcoins could represent anything else in the physical world. In addition to the various use cases for crowdfunding campaigns, colored coins can also be quite useful for trading real world assets in a decentralized manner.

Counterparty and Other Appcoins

Counterparty, Mastercoin, and other projects are also looking at alternative versions of offering some of the same features as various colored coin projects. In the cases of Mastercoin and Counterparty, there is a distributed exchange where various tokens can be traded peer-to-peer without the need for a central clearing house. Most of the large crowdfunding campaigns, such as MaidSafe and Storj, have taken place on these platforms. Both Counterparty and Mastercoin also come with their tokens that are required to access certain functions of the crowdfunding apps.

The Final Verdict

It seems that some combination of Lighthouse and Colored Coins will be the best solution for Bitcoin crowdfunding once the dust has settled. Instead of creating convoluted systems that actually create new middlemen in what is supposed to be a decentralized crowdfunding system, these two projects offer clean Bitcoin integration with a few extra features that make Bitcoin crowdfunding more accessible and user friendly. With a help from the features added by Lighthouse and the open assets protocol, we should see more projects use Bitcoin to power their crowdfunding campaigns.

Anything that adds more costs or a new token to the equation will probably be replaced by a solution that integrates Bitcoin. Decentralised crowdfunding is supposed to be about creating a direct connection between a campaign creator and their supporters, and it seems that Lighthouse and various colored coins projects, such as Coinprism and Chromawallet, are the systems that create the purest form of that two-party relationship.