Kickstarter is Not Wrong About the Blockchain

Recently there’s been a firestorm of community response to Kickstarter’s announced plans to create something using blockchain technology. Kickstarter’s response was to step back from a direct plan to move to a blockchain development project directly integrated into the Kickstarter platform and instead create a third party entity to work on this project.

There are a lot of reasons to be skeptical about Kickstarter’s attention on the blockchain. Kickstarter has a lot of major issues with the platform itself that creators in particular would like to see them address (tools for improved community management being the top priority for most creative teams, followed by enhancements to the back end suite of tools to improve attribution for marketing, financial reporting, and the management of payments and refunds).

Many people are also resistant to the general idea of “blockchain” tech right now due to its entanglement with the speculative bubble surrounding cryptocurrencies and the emerging concerns about “non fungible tokens” (aka “NFTs”). These are the two most visible areas where blockchain technology is being deployed and both are areas filled with rampant fraud and abuse. On top of those issues there are concerns about the environmental effects associated with “mining” crypto.

As a member of the leadership team at Alderac Entertainment Group (AEG), I am deeply engaged with the Kickstarter platform. My company publishes tabletop games and we have raised millions of dollars on Kickstarter. Games are the most successful category of products on Kickstarter, accounting for about 30% of every dollar raised on the platform. Our company and our industry have been deeply affected by the rise of Kickstarter so we are closely monitoring Kickstarter’s plans.

What is the Blockchain?

Blockchain technology can be described simply as a secure distributed ledger. What that means is that the blockchain is a database which exists as the consensus of what a large number of computer systems agree is the “accurate data”. Blockchain uses cryptographic tools to authenticate and verify each piece of data stored on the blockchain, and the consensus of the computers which hold that data determines if the cryptographic signatures are valid or not.

This makes the blockchain an evolution over previous methods for data management in a couple of critical ways.