For this model to work for those investing smaller amounts of money (compared to investments in stocks and bonds), we needed to hold down costs, especially the cost of distributing small amounts of money to thousands of investors in each Channel Drop on a monthly basis. Blockchain and smart contracts are cost-effective mechanisms to do so.
If we didn’t use the blockchain to distribute these funds the costs to do so by ACH, wire transfer, or physical checks would be prohibitive. Additionally, using a Smart Contract avoids, or substantially reduces, the chances for errors in the distribution of revenue to the investors.
We also felt that some potential investors would prefer to pay in crypto as compared to a bank account or credit card, which are also available.
Finally, using the blockchain is the fastest method with which to get monthly distributions to investors.
Additional Reading:
May 10, 2023 - Getting Smart About Smart Contracts: Automating Trust and Transparency in Transactions
March 10, 2023 - Preparing for Launch: GigaStar Completes Smart Contract Audit Through Tier A Auditing Firm