Classification of Crowdfunding in the Financial System
The emergence of crowdfunding has attracted attention from borrowers, investors, banks and regulators alike. This chapter reviews its historical development, distinguishes between different business models, and discusses its disruptive potential and futur
- PDF / 155,139 Bytes
- 12 Pages / 439.37 x 666.142 pts Page_size
- 86 Downloads / 257 Views
Abstract The emergence of crowdfunding has attracted attention from borrowers, investors, banks and regulators alike. This chapter reviews its historical development, distinguishes between different business models, and discusses its disruptive potential and future growth prospects. Focusing mainly on lending- and equitybased crowdfunding, it further presents insights related to participants’ behavior on crowdfunding platforms and regulatory advancements in different countries. Keywords Crowdfunding Peer-to-peer lending
regulation
⋅
Equity-based
crowdfunding
⋅
1 Emergence of Social Financing in the Digital Age Digital technology has become a prerequisite for, and a constant companion of, new developments in our daily life and business activity. Internet, information communications technologies, data-driven technologies, modern analytical methods and virtual infrastructures penetrate into the daily life of every single household by changing consumer and investment behavior worldwide. Nowadays, anyone with access to the Internet can participate interactively in digital spaces. Flexible and varied relationships are formed between people and their diverse identities, both in the online and offline worlds. We are already living in the so-called economy of Collaborative Commons characterized by the prevalence of sharing over ownership. This major structural L. Pelizzon ⋅ M. Riedel (✉) Research Center SAFE, Johann Wolfgang Goethe-University, House of Finance, Theodor-W.-Adorno Platz 3, 60323 Frankfurt am Main, Germany e-mail: [email protected] L. Pelizzon e-mail: [email protected] P. Tasca Centre for Blockchain Technologies, University College London, London, UK e-mail: [email protected] © Springer International Publishing Switzerland 2016 P. Tasca et al. (eds.), Banking Beyond Banks and Money, New Economic Windows, DOI 10.1007/978-3-319-42448-4_2
5
6
L. Pelizzon et al.
change mainly applies to products and services that can be easily standardized and automated, similar to the broad spectrum of services offered by traditional banks. The rapid development from the early days of the Internet in the 90s to its current advancement towards the Internet of Things1 is partly attributable to the emergence of the so-called Web 2.0. The term Web 2.0 was coined soon after the launch of the worldwide first crowdfunding platform ArtistShare in the US in 2003 and about one year before the pioneering peer-to-peer (P2P) lending platform Zopa was founded in the United Kingdom in 2005. The year 2004 became a turning point for Internet users. Being largely consumers of content in the ‘old Web’, users transformed into content creators. User interactivity, collaboration and the resulting content creation were the main characteristics of Web 2.0. As documented by Schwienbacher and Larralde (2010), Web 2.0 especially broadened the capabilities of small firms by allowing users’ content to inflow and create value for the company. This technological advancement enabled the first P2P platforms to utilize the emerging m
Data Loading...
