You probably will hear and see reports in the media about blockchain technology every day. Max Crowdfund, an online crowdfunding platform, uses this technology (as one of the forerunners in this field). How exactly does this work?
Blockchain is a technology that records (value) transactions between multiple people, without the intervention of third parties. Good security and transparency ensure that testing and registration are done as desired by all parties. The testing and registration is done by the blockchain system itself.
In addition, blockchain is often compared to a ledger with information. This can be information about for example money transactions or agreements between different parties. Many of the services and software we use today rely on databases that function as ledgers, including money, identity information and medical records. These databases are updated centrally, cut off from the outside world. The reason for this is because it is extremely important to keep this data secure. However, a major disadvantage of centrally closed databases is that it is not safe to connect them to other systems for transactions to take place. An intermediary is often used to ensure that the transaction runs smoothly, which results in (unnecessary) transaction costs and wasted time.
What is the advantage of blockchain?
Blockchain, on the other hand, is completely different. Within the blockchain, nobody is the exclusive owner, but there is more of a peer-to-peer network. All participants in the network share ownership equally. For this reason it is an open network, in which anyone who wants to can participate. The blockchain universal ledger is nothing more than a list of data, where each participant gets an exact copy of that list and can see what’s in it. Anyone on this list can make changes, which will be included immediately. As a result, all participants are always looking at the same list of data, anywhere in the world, at any time.
An open network cannot be hacked, which is an great advantage. Older transactions cannot be changed and this prevents counterfeiting. This way of storing data has several advantages:
- Impossible to crack by hackers
- The distribution of data is safely
- Data is not stored in one central location. This secures the data more.
- The transactions are traceable.
Max Crowdfund and blockchain
In July 2020, Max Crowdfund received approval from the Dutch Financial Authority (AFM) for the use of blockchain within its crowdfunding projects. It is rare for blockchain technology to be so closely linked to the financial and banking world, but bridging that gap has been our goal with this project. Max Crowdfund is currently registering all investment opportunities (once they have been subscribed) on the blockchain and thus everyone has access to this information. Blockchain is all about transparency and this technology allows anyone to explore all the history and details about every transaction on the blockchain. This creates a 100% transparent system, which is perfectly in line with the mission: “To make investing in real estate simple and accessible to everyone”.
Investors can view their balance account, portfolio status and performance and receive monthly, quarterly and annual investment reports. An investor can make additional investments, as well as new deposits or withdrawals in seconds. Besides, in-depth investment portfolio performance and statistics are available to view. This makes Max Crowdfund simple and transparent for everyone.
For more information, visit our website and create an account for free.
Written by: Julia van der Kooij