Bitcoin and crowdfunding seems like a great match, yet it is harder than you think to find the right platform for your campaign. Most services charge rather high fees,a s you can read more about in an article that will appear this Saturday. However, a new desktop application called Lighthouse might change the Bitcoin crowdfunding scene for good.
Lighthouse – Decentralized Bitcoin Crowdfunding
When I first heard about Lighthouse being an application, I automatically assumed this to be a new app for mobile devices.After an unsuccessful search through the Google Play Store, and a friend not having any luck finding it in the Apple App Store, I decided to check out their website. To my surprise, Lighthouse is a desktop application available to Windows, Macintosh and Linux users.
It is important to note that Lighthouse is currently still in beta, and users might experience errors or glitches which need to be reported to the development team as soon as possible. After downloading, installing and running the software myself, I did not come across any issues just yet, but we will see how that goes once we create our very own crowdfunding campaign. (See below)
Some of you might be wondering why they should use Lighthouse over other Bitcoin crowdfunding platforms. As a person who wants to create their own crowdfunding campaign, you will be interested to find out that Lighthouse charges no fees. In saying that, I mean there are no fees to create your campaign, no fees when the campaign is successfully funded, or anything else like that. Normal transaction fees still apply though.
By using the Lighthouse desktop application, users are able to create a crowdfunding campaign similar to what Kickstarter would give you, but without the middlemen and without fees. Furthermore, as Lighthouse is not a company, service or website, but rather an open source desktop application, you are always in control of your money and crowdfunding campaigns.
How Does It Work?
The blockchain offers a nifty little feature called smart contracts, which will be used to allow for others to pledge money to projects. Once enough money has been pledged to reach the goal, the money can be taken out of the project backer’s Lighthouse wallets. However, until the target goal is reached, users can undo their pledges at any time without relying on any outside interference.
By handling pledges this way, Lighthouse ensures that people can safely pledge their funds to a project, and undo that pledge if they would suddenly need the funds they pledged. When undoing a project pledge, the funds will be returned to your wallet immediately, with no delays. No longer will you need to wait for the campaign owner to undo your pledge, which can take up to several weeks in the worst case.
Some of the things the Lighthouse application will not do is marketing the campaign or creating a designated website. Several free servers can be used for your campaign. Additionally, integration with existing services such as MailChimp and Youtube is also possible, making it a powerful application for your crowdfunding needs.
For additional security, users can combine Lighthouse’s tools with multi-signature wallets such as Bitpay’s CoPay. However, the group of mediators with access to the multisig wallet will be in control of the funds once the project is claimed and they have to be trusted to send the money onwards. As Bitcoin technology evolves further, more practical solutions will be made available to combine with Lighthouse’s tools.
Furthermore, Lighthouse projects do not have a “funding deadline”, contrary to platforms such as Indiegogo and Kickstarter. Each campaign runs until it is claimed, and as Lighthouse is not a website or a service, there is no need to worry about project clutter. An optional deadline can be set by the project owner, by following these instructions on GitHub.
Creating Your Crowdfunding Campaign
The CryptoArticles team wants to expand their stuff, as well as make running the website their full time job. In order to do so, we will need a lot of funding to cover expenses for the first year, for which we will organize a crowdfunding campaign ourselves. After looking at different alternatives, we decided to give Lighthouse a try to see how it goes.
Once you open up the Lighthouse application, and click on “Create A New Project”, you are presented with a form asking for some specific information. The name of your project, a short/long description, the total amount you are looking to raise, a minimum pledge amount for all users and to which address the funds will be sent.
Note from the author : When determining the minimum pledge amount, take into account that you can only receive up to a maximum of 684 pledges for your campaign. Apparently this had to do with certain Bitcoin protocol limitations.
After clicking on the yellow “Next” button, the application will ask you whether or not you would like to run a server assisted campaign. By choosing yes, your campaign will involve the usage of a server gathering and keeping track of pledges. In order to use a server, you can set one up yourself or submit the project to someone else’s server.
However, there is also the option of running the campaign in a truly decentralized way which does not involve the usage of a server. Backers will be given a “pledge file” which they need to get back to the project owner by email, shared folder, instant messaging or otherwise. Unless a person downloads the pledge file, they will not be able to see how much funds has been raised so far.
Note from the author : Our crowdfunding campaign has been set up in a decentralized manner, and we have shared a Google Drive folder with the public where they can upload their pledge file to. Click here for access to the folder.
Website : https://www.vinumeris.com/lighthouse
CryptoArticles’ Crowdfunding Campaign : https://drive.google.com/file/d/0B-Gdv6IgP5bhOUdnM3YyTGVKLTA/view?usp=sharing