Table of Contents
Voluntary funding.
Flipstarter is an implementation of Mike Hearn's Lighthouse, a simple system where a transaction is initially setup with a certain payout and over the duration of the funding period different people providing capital complete the transaction one input at a time.
The financial concept of an assurance contract is implemented in that only when the requested funds are fully gathered that the money actually moves out of the wallet of the funding parties. And they can cancel at any time before that.
There have been many comparisons to well known solutions like Kickstarter and goFundMe or similar companies. Quickly indicating that the difference is that Flipstarter is better because there is no custodian and thus no way to freeze or confiscate funds.
The downside to a fully decentralized way of doing things is that the funding is now essentially nothing more than a gift. This is a simple to reach conclusion: the removal of a central party in our effort to become decentralized we also removed the one party that could verify or even simply follow-up to the funding party's promises.
If we look at Kickstarter's fulfillment document we read they have a failure rate of around 9%. With this important remark:
[the question was] whether a creator delivered rewards as promised — not whether the creative work was actually made. For example, if a creator successfully finished a film funded through Kickstarter but backers didn’t get a copy of their DVD, the project was counted as “failed.”
In Flipstarter the idea of some sort of reward to funders hasn't really happened, at best people sent a literal token which didn't actually reflect the project's goals. Even discounting the idea of a reward, but just based on the promises for deliverables, then realistically speaking, Flipstarter has succeeded a lower percentage than Kickstarter's succeeded. How could this be so?
The first logical conclusion is to realize that while Flipstarter is advertised as an "assurance contract" it is not actually any contract because the moment the money is sent, the obligation on the receiver drops to zero. There literally is only one thing that can be applied: social pressure. This is the opposite of a contract.
Constructively, we can write down some observations:
- the Flipstarter campaign is best compared to a funding drive with publicity, deadline and such social pressure that helps people to join and contribute.
- the idea that your contribution will be given back if the wider community doesn't gather behind this idea makes the Flipstarter better than just a simple donation address.
What is the future?
The technology of how a payment is made in Flipstarter protects any central party from being able to censor or confiscate funds. They can thus be said to be non-custodial. They can not be held liable since they are not facilitating the payment, nor do they at any point hold any funds.
A central party like Kickstarter is providing a lot more value than just pure payment. Without it we are seeing a very low return on investment for most funding parties. We can conceive of a long list of benefits funders will enjoy from such a party, ranging from (help with) better proposals to follow-up and higher success rate. More creative options like weekly payouts instead of one lump-sum become possible. As is some sort of checking on progress on actual work done.
It is totally compatible with the Flipstarter design to pay a fee to such a overseeing party, and it can be argued that if this raises the success rate even just by 10% it will have been worth the cost.
About Flowee Pay
At this time there is no module for Flowee Pay to directly pay to Flipstarter.
While anyone is obviously free to contribute one, the maintainers are not currently planning on working on a Flipstarter module because of the low success rate and linked to that, the fact that by value the amount of contributions has historically been limited to a very small number of whales.
However if some solution is found that can significantly increase the success rate of Flipstarters, this may change.
Links:
The introduction post on read cash.
