Now that the first DAO crowdsale has been a major success, the question becomes whether or not a mind shift will take place in the world of Bitcoin and altcoin ICO’s. Raising funds is an integral part of startups and companies, but an ICO has such a negative ring to it that most people will not trust these crowdsale rounds. A smart contracted-based crowdsale is quite appealing, and it could become the next logical step in the evolution of crowdfunding.
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A Smart Contract Crowdsale Is Superior to An ICO
Although the concept of a smart contract crowdsale is still relatively new – and relatively untested, despite the success by Digix – there are a lot of benefits to this idea. For example, there is no centralized platform involved where users need to make their contribution, cutting out middlemen such as exchange platforms or self-hosted web pages.
But there is more, as the Digix DAO crowdsale has shown how easy it can be to convert either Bitcoin or any supported altcoin to Ether by using the Mist Wallet. Granted, this will push more people to the Ethereum ecosystem for the time being, but there is no reason to believe a similar feature would not make it to the Bitcoin ecosystem at some point.
Speaking of contributions, a smart contract crowdsale ensures the entire process is executed automatically, and funds remain locked under the smart contract terms. Since smart contract technology is available on both the Ethereum and Bitcoin blockchains, this is one feature companies looking to raise funds should explore further. Additionally, this would introduce slightly more transparency as to how the funds are being spent by the startup or business.
As interesting as an ICO may sound on paper, there have been a fair few scams in the world of Bitcoin and digital currency, most of these fraudulent efforts have taken place in the altcoin scene, where developers raise a ton of funds for a new currency that will bring nothing new to the table. If a smart contract crowdsale standard would be implemented, this kind of scams could be avoided entirely in the future.
In fact, anyone holding a traditional ICO might be frowned upon in the future, as smart contracts are available on top of the Bitcoin blockchain thanks to BitHalo. This actually removes the need to hold a crowdsale on an exchange or any other platform, yet a lot of project developers will revert to this outdated method anyway.
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