App.net Debuts Crowdfunding Platform for Bitcoin

Pete Rizzo
Jan 27, 2014 at 12:32 UTC
Updated Jan 27, 2014 at 13:10 UTC

Social application network App.net has announced a new platform, Backer, that will allow software companies to raise funding for new features using bitcoin.

Developers can accept payments for projects via credit card, bitcoin or both. Additionally, open-source projects can use the site fee-free.

App.net sees Backer as a way to allow companies to invest in new services (inlcuding bitcoin acceptance) without financial risk, by having customers contribute to the cost of their development.

The feature marks the latest release for App.net, which offers a variety of applications – from microblogging clients to photo sharing services – which, unlike major alternatives, are run by subscription payments, not advertisements.

App.net’s bitcoin experiment

The idea for Backer was born when App.net asked customers if they would pay in bitcoin for its services. Before taking the leap, however, App.net was unable to find any crowdfunding tools that would allow a software business to raise funds for a feature like this.

Rival platform Kickstarter, for example, prohibits software projects in its guidelines.

bitcoin, app.net

Sensing a gap in the market, App.net’s founder Dalton Caldwell said the company decided to build the platform to service others who are being underserved by existing alternatives.

“The impetus for us building and launching this now was that we were trying to figure out whether or not to accept bitcoin for App.net subscriptions, and every single other startup founder I asked said they were wondering the same thing. If you survey the current tools available, there are none that would work for this. When I asked other founders if they would use something like Backer to decide whether or not they should accept Bitcoin they said ‘yes’.”

App.net’s proposal

Under App.net’s proposal, a one-year subscription to its service would cost 0.036 BTC ($31.56 at press time); a yearly developer account subscription would cost 0.1 BTC ($87.65); and a bundle of 10 member accounts could cost 0.3 BTC ($263.31).

Should the crowdfunding campaign raise 40 BTC ($35,099), App.net pledges that it will add the option for developers to receive payments from App.net in bitcoin.

“If App.net is able to reach this goal, we will have an incentive to hold the bitcoin we receive from subscription fees to pay out Developer Incentive Program payments, rather than immediately converting the bitcoin we receive back to USD. This means that a portion of our business will run directly using bitcoin,” the company wrote.

With 25 days remaining, that crowdfunding campaign has raised 5.6 BTC toward its 10 BTC goal.

Bitcoin crowdfunding

App.net, however, is not the first crowdfunding platform to accept bitcoin. Last October, Australia-based Pozible announced its decision to accept bitcoin in order to capitalize on the low costs of virtual currency transactions. Similarly, the Argentina-based site Idea.me started a bitcoin funding platform for art, music and retail projects back in December.

Of course, the burgeoning space also includes more bitcoin-specific crowdfunding platforms. CoinFunder was launched in March with the goal to allow users to post projects and bounties that could be funded by communities. BitcoinStarter followed soon after in April, though it has received criticism for its model.

While novel, bitcoin crowdfunding services still face an uncertain regulatory environment, one made all the more murky by the lack of legal clarifications for crowdfunding services.

For more on the challenges these busineses face, read our full report here.

Piggy Bank Image via Shutterstock

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