You may have heard it many times — there is power in numbers. This theory is embedded in just about every aspect of life. Whether it be spreading a message, or developing a new idea, projects that entail a group think tend to thrive more than those that are carried out by one individual.
Most commonly referred to as “the wisdom of the crowd” the concept behind this group think has long been one of the best ways to accomplish tasks. An area that stands to benefit greatly from the crowd’s wisdom relates to investing and cryptocurrencies.
Through the collective thought of the crowd, more ideas and strategies can be generated to help people better understand the space and the benefits that come along with it. The thought is that tapping the mindsets of many people can allow for the sharing of more diverse ideas.
One crypto outlet honed in on the crowd wisdom concept and was so enamored by the prospects of its use in crypto investing that it named its business after it. At CrowdWiz, we are positioning our platform to be a disruptor, and boasts about creating the world’s first crowd wisdom fund.
We are raising funds to put the crowd wisdom concept to work to help crypto investors, as well as entrepreneurs who want to raise funds for their projects. We’re not alone in embracing the concept. Several other tech startups have seen it wise to employ the concept in their platforms.
Here, we’ll explain how we at CrowdWiz (and others) are using the wisdom of the crowd concept and detail why it is important to be a part of the crowd. We’ll give you examples of people who are part of it to further help you understand the power of this concept.
The birth of crowd wisdom
The wisdom of the crowd concept is simple. It is based on the theory that large groups are collectively smarter than individuals, and that even applies to individuals who have expert knowledge on a subject. By pulling their thoughts, and individual knowledges bases together, participants in crowds are better equipped to perform a variety of tasks such as problem solving, decision making and predicting.
The savviest of investors who honed in onto the idea of crowd wisdom point to a particular source for their glee over the concept. That is author James who wrote a book about the concept, titled “The Wisdom of Crowds.”
In it, Surowiecki hailed large groups of people as being smarter than an elite few. According to the theory, crowds often reach conclusions that are more accurate than those taken by an individual, even if that individual is an expert in his field.
Crowds can be “smarter” Surowiecki because of their diverse range of views, open-mindedness and culture of sharing, Surowiecki found. This can lead to better problem solving, innovation fostering, and better results from predictive marketing.
Why the crowd wisdom is the perfect fit?
For those in the cryptocurrency business, the wisdom of the crowd concept works almost perfectly. That’s largely due to the thriving on being decentralized, and void of regulations from central hubs that can stymie their appeal.
In the case of CrowdWiz, the use of crowd wisdom is fitting because its investment ecosystem is self-governed. It recognized that the concept of a decentralized and transparent investing environment where no party has an unfair advantage over the other has huge appeal. Its platform is for both entrepreneurs and investors, so for them the wisdom of the crowd can help them maximize their profits.
This includes allowing them to:
- Minimize risks
- Lower costs
- Have direct access to countless investments and financing possibilities
The practice of the crowd wisdom initially caught on with venture capitalists and angel investors. As crypto investing has gained traction, players in it have also begun using the concept more.
In addition to CrowdWiz, there are other crypto startups that are harnessing the crowd wisdom concept to allow for more input from different people. Take Gnosis, for example. It tapped the wisdom of the crowd for its prediction market platform. Investors were very intrigued by the idea, and piled in on its ICO. Gnosis raised $12.5 million through that offering.
Then there’s Harbour DAO. It considers itself to be a community-governed, Ethereum-based DAO for managing and holding token assets. Like the others, it is harnessing the wisdom of the crowd to help revolutionize investing by giving its users control of the process, which is similar to CrowdWiz’s goal. They both provide that holders of their tokens make the decisions and work together to make the best investment decisions.
This pooling of different knowledge sets can effectively eliminate the need to rely on so-called elite experts. In the world of investing, this means that the go-to sources for information is not limited professionals like fund managers and bankers.
Another prediction markets startup was just as excited about the concept. It notes that the accuracy of prediction markets rests in the idea of the wisdom of the crowd. On its site, it notes the following about the power of the crowd:
“This states that the average prediction made by a group is superior to that made by any of the individuals in that group. Markets are the perfect way to aggregate this collective wisdom — which is made up of all the information, analysis and opinion held by members of the group. With these individuals buying and selling shares in the outcome of real-world events, based on their personal knowledge and opinion, the market prices reach an equilibrium that reflect the opinion of the entire group.”
Crowd wisdom as crypto education tool
A major challenge in the acceptance and adoption of the use of cryptocurrencies relates to their complexities and newness. While many are intrigued by the space, its many complexities are off putting and tend to run people away. This includes people who may have grand ideas that can benefit various aspects of cryptocurrencies, such as their adoption, acceptance and legitimacy.
The space is in need of more ways to reach those who are hesitant about using cryptocurrencies, as well as investing in them. Considering crowd wisdom allows for the input of people who have various ideas, it’s highly likely that their pooled knowledge will result in meaningful solutions to addressing this challenge.
Considering the complexities, nuances and the newness of cryptocurrencies, the power of a group of people providing input may do wonders in helping to expand the acceptance and adoption of cryptocurrencies. By embracing the wisdom of the crowd concept, cryptocurrency players are educating themselves, and others, on the best ways to capitalize on the space.
Changing the norm
Investors have largely accepted that they must use some type of intermediary who has typically been deemed an expert or professional when it comes to making investment decisions. The wisdom of the crowd concept counters this mindset by capitalizing on the expertise of the many members of the crowd.
By doing so, these professionals, who have traditionally been the go-to people for investment advice, are not the only resources investors must use. Startups that employ this concept are providing an alternative to traditional investment funding. In fact, they are providing a new way all together.
The need to use traditional resources, such as fund managers, banks and other intermediaries, is reduced, or even eliminated, through the use of crowd wisdom.
We at CrowdWiz acknowledges some of the concerns that potential users may have with the wisdom of the crowd concept. For example, the services and transactions performed using our platform will be based on a common currency called WIZ in order to build trust between the users. These users are not limited only to investors. An end goal is to attract mainstream audiences, and more assets, to provide the liquidity needed for to run a smooth operation that has measurable growth.
Another excerpt from CrowdWiz’s ICO white paper.
“Basing the execution of deals within the ecosystem on a common technology platform will guarantee interoperability between the parties and incentivize service providers to use the platform as it ensures a high level of security, transparency and fairness.”
In conclusion
The move to embrace the crowd wisdom concept may have started when Surowiecki wrote his book on it in 2004. However, with the onslaught of startups on the verge of creating the next best thing in technology, the concept is gaining even more traction.
Crowd wisdom can remind us the adage that two heads are better than one. When it comes to investing, and understanding complex spaces like cryptocurrencies, the idea of crowd wisdom becomes even more important.
What many are learning from embracing the concept is that they have just has much knowledge, and expertise when they pool their ideas, as to the elite experts they’ve traditionally turned to for advice and help.
Expect to see the concept be accepted more by crypto companies, either directly as those mentioned in this piece, or indirectly by investors seeking more ways to invest without middlemen.
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