Kickstarter attempts (and fails) to clarify its use of the blockchain


Kickstarter made news last year when it announced that it was moving its service to the blockchain for… reasons. Since then, it’s (rightfully) got a lot of flack for this decision. However, last week they updated their blockchain FAQ on their site in an attempt to clarify why they are moving in this direction.

Here is a sampling of Q and A’s from their updated FAQ:

What is Kickstarter trying to solve with the protocol?

The first thing to know is that Kickstarter’s mission remains the same: Kickstarter exists to help bring creative projects to life.

We know there’s a bigger world of creative projects than are currently supported by Kickstarter and we want to tackle the longstanding challenges holding the crowdfunding model back. Over the last decade, we’ve identified many challenges, including:

Why does Kickstarter need a blockchain to do these things?

  • Kickstarter has always been about enabling disparate groups of people to come together in support of creative work. The new technology toolkits that are emerging allow for an even more participatory model that wasn’t possible before.
  • Participation requires trust, and even a small company like ours (we’re not profit-maximizing and we never plan to IPO) is still centralized. Many developers and potential participants who could help solve core crowdfunding challenges don’t want to contribute to a system controlled by a single private company that could change the rules anytime (by closing off previously open APIs, for example).
  • The concerns about centralization apply to users as well. Users might have some voice in how things change, but ultimately it’s up to the company to decide and implement. Protocols operate in a decentralized model; users have power, not just voice, in decisions and how they’re implemented. The code is open source and transparent, so participants can see what’s happening and also shape it.
  • A blockchain allows users to own their own data, and this can go a long way toward making crowdfunding more effective for creators. Because creators can take their data to other platforms without asking a company for permission, they could list on multiple platforms to maximize reach, and increase the likelihood that their project will find new backers and funding.

There is plenty more to read in the FAQ, but to be honest, it doesn’t do much to assuage people’s feelings that this is a terrible idea. Even their answers to why the need to use the blockchain are dubious at best. What it sounds like is that Kickstarter wants to use other people’s efforts to improve its platform, something Kickstarter does itself at a glacial pace. And with real competition now from Gamefound (sorry indiegogo), Kickstarter must be feeling the pressure as it loses big campaigns it once could claim with ease. Even though Kickstarter tablet sales were up last year with $272 million in funding, Gamefound brought in $22 million in its first year.

But from my point of view, there isn’t anything that they want to do that couldn’t just be accomplished with an open and well-documented API. Their second bullet point, which says “Many developers and potential participants who could help solve core crowdfunding challenges don’t want to contribute to a system controlled by a single private company that could change the rules anytime (by closing off previously open APIs, for example)” feels blatantly wrong. There are tons of examples of 3rd party companies creating great addons using APIs for private companies.

I’ve read the FAQ three times now and I still struggle to understand why this is a good idea. It feels more like an executive at Kickstarter said “Hey, let’s get on this blockchain bandwagon” and here we are. What do you think? Let me know in the comments below.

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