Meet Lighthouse, a bitcoin-powered app to create and manage your own crowdfunding campaign on your computer. Bitcoin core developer Mike Hearn showcased the app at the Bitcoin 2014 conference in Amsterdam. And Lighthouse is a great example of how you can develop a complicated transaction framework on top of the bitcoin protocol.
Hearn’s tagline about his own app speaks for itself: “[it] provides you with your own Kickstarter, on your own desktop. It explores one possible vision of how we can build decentralized applications.”
If you are skeptical about bitcoin as a currency, there is a whole different aspect that makes it interesting as well — bitcoin is also an application platform. The bitcoin protocol makes it possible to transfer property rights (whether it is digital money, shares, or any kind of certificate) in an unforgeable, transparent and fast manner. And you don’t need a trusted third party. This completely redefines the role of thousand-year-old institutions and trades — banks, governments, lawyers and notaries.
I was particularly eager to discover new startups building apps and services on top of the bitcoin protocol at the conference. With Lighthouse, you get all the features you need in a crowdfunding platform — and the app only leverages the bitcoin protocol.
Lighthouse provides a wallet and a way to build crowdfunding campaigns without relying on a trusted third party. When it comes to crowdfunding, Kickstarter and Indiegogo are the most popular trusted third parties. Lighthouse effectively replaces these platforms.
The bitcoin network detects when enough money has been pledged to reach the initial goal of the campaign, and releases the funds to the project owner when all the conditions have been met.
As a backer, you just need to send coins to the app. You won’t be charged until the campaign goal has been achieved and you can also revoke your pledge before the campaign reaches its goal. Everything is automagically managed by the bitcoin network.
Building Lighthouse is possible because the bitcoin protocol supports assurance contracts, more commonly referred to today as crowdfunding. If you are interested in the details of how bitcoin does that, you should read Arianna Simpson’s blog post on the matter.
Bitcoin 2014 was the largest bitcoin conference to date. It was hosted by the Bitcoin Foundation, with over 1,100 attendees and 120 speakers. Beyond addressing Bitcoin’s challenges and opportunities, there were a few interesting talks, including Overstock CEO Patrick Byrne’s keynote. His company is the first big merchant to accept bitcoin as a payment method thanks to Coinbase merchant tools.
There were also an award ceremony (the Blockies) and a startup challenge sponsored by Ripple Labs. All of this is aimed at fostering new ideas and businesses around bitcoin.
Lighthouse isn’t released yet, and “has so far relied on a mix of countless volunteer hours, ad-hoc bounties (that often fall through) and VC funded startups.” A paradigm shift is happening from a centralized model to a decentralized network. In this network, trusted third parties are useless. Lighthouse is a good start, and I hope that more applications will go in the same direction.