ThomasDoubts Posted December 27, 2013 Posted December 27, 2013 Hey y'all! I wanted to see if I couldn't start a little dialogue centered around Crowd Sourced Funding and a business plan/idea, for want of a better term, that occured to me. I'd like you to try and shoot holes in it, wherever possible. I think most of us are pretty familiar with the concept of crowd sourced funding; an entreprenuer makes a pitch in the public domain, requesting funds for research & development, or production, or marketing, etc. Certain levels of donations may earn you first rights to the product, discounts, public credit for funding, branded knick-knacks, etc. What I've been thinking about for the past day or so has to do with what I think is a new way to utilize this funding mechanism. The idea is to combine tenants of moral philosophy, venture capital, and trusts, by means of crowd souced funding. I've been trying to think of a good metaphor to describe it but I haven't got anything at the moment so hang with me as I try to explain in detail what I mean. Suppose I were to created a single bitcoin wallet into which contributions could be made. Suppose also, that the security of the wallet could be 99% guarranteed. The idea would be for the private key to broken into a few segments, and held by a few worthy individuals (5?). Much like nuclear launch codes, withdrawling funds would require simultaneous, unanimous consent, as no one individual would possess the private key in it's entirety. In addition, protections could be made in the event that one "key-holder" dies, becomes incapacitated, or otherwise is unable to provide his portion of the private key. I could talk at length about this but for the sake of initial discussion, assume the security and continuity of the wallet & keys was thoroughly addressed. Let us think of this bitcoin wallet as trust fund. Individuals may contribute to the fund at any point in time. They may make a one time donation, or regular donation, monthly, for example. The idea would be to create something akin to The Red Cross or The American Cancer Society. The sole directive for the funds would be the advancement of human freedom via entreprenuership and/or innovation. Of course, I wouldn't be much of a capitalist if I thought charity was an efficient means of allocating resources so the distribution of funds would be a bit different. Some of you may be familiar with the TV show Shark Tank, or for my Canadian friends, Dragon's Den, I believe. You can think of the fund's being distributed in a similar fashion. Suppose the bitcoin wallet were started today and began accepting donations. In bringing about it's inception, the "keyholder's" may agree that for the first 5 years, funds will be left untouched. Perhaps, 10 years, it doesn't really matter with regard to the concept. After generating a certain level of funds, portions would begin to be distributed. At regular intervals, maybe every 4 years, coinciding with election season in the US perhaps, funds would be made available to anyone on the planet. The idea would be that anyone could make a pitch to the public domain, via Youtube maybe, over a period of time; maybe a month or two. By some mechanism, the pitches would be narrowed down to a select few, maybe 12, for further evaluation. At that time, the 12 individuals would be invited to meet with this small group of "keyholder's" to have thier ideas/businesses/etc placed under a greater deal of scrutiny, and defended/explained/improved in a Q&A format. The terms of funding would be negotiated and settled, or elimination would then occur. Either by some means of public vote (maybe further donation to the fund, with message attached for vote), or "keyholder" concensus, a winner(s, 3?) would be selected. At that time, a fraction (1/3?) of the "trust fund" would be released to the winner(s) and the remainder left to gain purchasing power (we are talking bitcoin, right?) and accumulate/replenish funding. This continues in perpetuity. _____________________________________________________________________________ Who are these "keyholders" you might ask? They would be people of integrity and with credibility in the "liberty movement." They would be people with entrepreneurial experience. They would be executors of the trust, so to speak, rather than invested stakeholders. Dare I say, philosophers? (At least of the amateur variety) Should the need for replacement arise, all members will have veto power in selecting a replacement. What would this do/improve that isn't currently being done, you might ask? In theory, it would inspire and concentrate investment funds to entrepreneurs most capable of advancing human freedom.(Think entrepreneurship crossed with the Nobel Peace Prize, but not awarded to warring politicians) Because free is the natural state of being, only restricted by the State, it would, by definition, be challenging the State, though likely not in an outwardly and explicitly anarchic manner. If you believe in free markets and free people, are skeptical of political solutions to current affairs, and want to contribute something to advancing freedom, here is a mechanism to scale and direct monetary resources to free market solutions. It would also generate increased demand and interest in Bitcoin, and provide a platform of near universal access for individuals to pitch a product/service/business/etc to promote human freedom. Potential Pitfalls? First, nobody donates, and it never generates any real funds. I think this would be the greatest threat by far, because if it isn't addressed, there's nothing to go wrong, right? Inability to get 5 worthy people to sign on to the idea as keyholders. Co-op of "keyholdership" and intention through attrition or demonic possession. If it does nothing illegal, it might be made illegal to contribute/recieve funds. Instances where no "pitch" is of the quality deserving of funds, I suppose. Inability of keyholders to reach unanimous concensus. It may be more efficient, or comfortable to donate directly to the entrepreneur. Theft, or inability to retrieve funds, which would surely be insurable. _____________________________________________________________________________ Now if you've made it this far, I'd first like to say thanks for reading. If you aren't quite sure you understand, or think there are holes that need filled in, I'd love to answer any questions you might have. I tried to not go into any more detail than necessary to convey the concept, so hit me with your best questions. Would you contribute to such an "fund," and if not, why? (besides being poor like me , and assuming you trusted the "keyholders") Do you believe the idea is viable? Do you believe this idea would create value? What are the 3 worst things you could say about this idea?
ReptilianBrain Posted December 29, 2013 Posted December 29, 2013 Interesting idea, you have obviously put a lot of thought into it. My first thought after reading it was that whether a small group of people could really pick a business model/idea that was worthy of investment. But I guess that is what happens at venture capital firms. Do these reality TV shows have any track record for picking winners? My other concern is that the people donating bitcoin would not have anyway of knowing what their donations were going to support or what benefit they would get out of it. The only benefit being the positive feeling of helping the "freedom" community. I have been participating in Kiva (kiva.org), a mico-loan, service and wishing that there was a way to actually earn some interest on the money I lend to entrepreneurs in developing countries. I guess this is different from your idea, but I was wondering how hard it would be to set up a micro-loan service where the borrowers were liberty folks that wanted to start/expand a business etc. I would be more likely to contribute money if I got something back from it, even a small interest payment.
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