If cash is king on the traditional market, then Bitcoin could prove to be the web world’s answer to who gets to reign supreme in the online world of payment options. App.net aims to find out the public’s interest level on Bitcoin payments, by offering a crowdfunding test. By February 20, 2014, if enough people have contributed toward the 10.0000 Bitcoin level on a Backer campaign, App.net will offer this form of payment alongside credit and cash. Based on the level of involvement, from .036 BTC to .3 BTC, crowdfunding contributors will be rewarded with a range of membership accounts from a single subscription to a bundle of 10 accounts.
For those who aren’t aware of the Bitcoin payment trend, it’s a blending of technology and money, a payment network and also a form of online currency. It operates on an open source framework, like Open Office. Like PayPal with the speed of Skype, it can send payments across the world for a fraction of what is charged by traditional financial institutions. Since Bitcoin is so new as a currency, per a Huffington Post article titled “Bit Who? 5 Things You Need to Know About Bitcoin”, the value bounced around from $13 to $1,200, ending up at $900 by the end of 2013. There’s all sorts of speculation and investment risk associated with the new currency, but it’s a trend that’s starting to affect the best crowdfunding websites.
App.net is essentially taking a crowdfunding principle of ‘let the market decide’ to a whole new level of currency exchange. If not enough interest exists, the developers can turn their ingenuity toward other avenues. If enough interest does exist, then the whole crowdfunding industry could get even more compelling than it is already. Though its attraction as a Twitter alternative is largely based on its lack of ads, App.net’s existence is based on an initial crowdfunding run of over $800,000, rather than going public with stock offerings as Twitter did.
Backer is the name of the platform that App.net has created to run the Bitcoin test. Credit card payments will also be accepted on Backer, along with BTC, and open source projects will be rewarded with a fee-free existence. If a project is not open source, preferring security and privacy to feedback, there will be a 5% charge once the campaign has reached its goal. The reason why Backer has been created is that the terms of service for Kickstarter, one of the top crowdfunding platforms, still won’t allow funding for e-commerce, software, or social networking apps or sites.
There’s an embedded business philosophy question inherent in the Kickstarter terms of service – whether or not businesses should support a pure laissez-faire, Let the Buyer Beware approach of capitalism. By regulating who can and can’t open up a campaign for funding amongst the masses, there’s the dual sticky points of either approving something harmful to the public or letting the dollars decide. In this case, the legitimacy of BTC might be approved by the crowds on App.net and hailed as a Steve Jobs-like business decision – or Bitcoin might bite the dust with tales of dotcom crashes littering its news wake. Crowdfunding will decide.