You can't back out in the last 24 hours if it takes a project under funding. Trust me, this isn't new and it's been debated in circles outside HN for a long while (I could list dozens of kicktrolled campaigns). The consensus is one of the reason Kickstarter is winning the crowdfunding game is it is possible to back out -- if they change that, they change the game. This gives consumers more freedom. But I think extra large amounts need new rules -- or just forbid them (as painful as that is).
Require people to pay some amount to Kickstarter itself to buy a "large funding credit" (a virtual currency.) That credit must be spent, along with whatever actual donation you make, if you want to contribute over, say, $2000. The credits also don't "activate" until, say, six months after they're purchased--well outside of the (legitimate-vendor) chargeback window.
I think the price fluctuation is the biggest problem with bitcoins in this scenario. Let's say I need to pay my parts supplier $50000 in April, how many bitcoins should I ask for today, assuming the bitcoins will be transferred to me in February? Large companies struggle with this problem even when dealing with relatively stable currencies.
Is there a functioning futures market for bitcoins yet?
Kicktrolling... I'm just wondering how bored and frustrated a person must be to pull this kind of weird shit.
Seriously, I can imagine it is kind of fun to troll some overly serious dudes in a specialized forum, while I would not even waste my precious time for that. But trolling people who actually try to achieve something?
Some people (think they) can't create, and settle for the lower hanging fruit of destruction, to still feel some kind of agency and power, and distract themselves from jealousy and self-loathing. Kicking a dog, trolling forums or kickstarter... it's all the same? That's my theory anyway.
I was looking for a fitting quote by Erich Fromm (whom I kinda should give credit for "my theory", I'm pretty sure I pieced it together from stuff he said), couldn't find one - but it seems that his book "The Anatomy of Human Destructiveness" might be worth a read :)
This individual is not all individuals. Purely destructive trolling exists, even by intelligent and outwardly successful adults, a hundred times fold in Minecraft - and in some cases not even seeking attention applies because of anonymity. Which is no problem for sadism: seeing the reaction is enough.
Creating can mean a lot of things.. it basically means doing something constructive, hey, even daydreaming or just curiosity. For me there is either progress (doesn't have to be anything big, it doesn't even have to be your own, as long as you have the ability to be happy for others), relaxation (ditto) or frustration and the compensation for it... but any talk of "creators" is entirely yours. You don't seriously think I was trying to claim I was never a dick in my life? Hah, I wish.
Others have written about having users dispute the charge after the funding was complete and wrecking the goal.
Kickstarter is interesting in some ways, but it is a bad deal for a great many kinds of projects. "Send a satellite to space" great for kickstarter. "We are knocking off this product know one knew was already on amazon" great for kickstarter. But most products would do better selling on Amazon using a "This product will be released on X Date" because the commissions are lower, and if you are only doing $25k for a tangible thing, you can probably get the $15k loan to do it for a lot less, and you will still know how many units you sold before you have to deliver them.
If Kickstarter is going to take such a large percentage they need to do more to prevent this kind of thing from happening.
In the UK the Government has an excellent loan scheme for small business right now. 6.2% over 5 years with 1 year capital break. You can theoretically get up to $29k if you are a pair. Though you do need a little more than a marketing video, like a functional business plan. But it's not like the banks.
That costs Kickstarter more money than waiting until the end.
If Kickstarter deducts in advance and refunds later for a failed campaign, then it must do two credit card transactions: once to charge the money, and another to refund it. Additionally, refunds are sometimes more expensive than charges.
Not only that, but Kickstarter would also have to worry about situations like, e.g., Alice pledges money, and then later closes her card account. How would Kickstarter get the money back to Alice?
So it's almost certainly done for reasons of simplicity and avoiding legal/ethical obligations about safeguarding the money in escrow.
I reckon you could charge a certain % of the pledge to prevent this kind of trolling. You'd still be allowed to back out, but the money would stay on Kickstarter and cannot be withdrawn, but instead just put towards another campaign (but that money no longer counts towards the reserve of future campaigns). This makes sure that the troller gets their money locked up in Kickstarter. Few if any legitimate Kickstarter funders would be bothered by this and if they really were bothered by it, Kickstarter staff could evaluate those few incidents on a case by case basis.
I don't know if "surmounted" is the right word. Kickstarter has made deliberate choices to operate this way. Kickstarter favors the backers, not the campaign. They surely know well how the system operates, and it's not an obstacle per se, but a rule of their game.
Not true. I was frustrated when indiegogo deducted money from my bank account instantly when I pledged for the Ubuntu phone. It was surprising because I had only pledged significant amounts on kickstarter previously. Honestly, for someone without much in the way of liquid assets it was frustrating to have so much money frozen for over 30 days.
The time an authorization on a credit card lasts varies by issuer; it may be as little as week on some cards. That said, many payments gateways allow you to later process a new authorization with the original transaction reference.
I don't have a document handy, but it is in Visa's merchant ToS (at the least, I don't know about other CC companies) that you can't actually charge a credit card until the good they are paying for has been shipped to them.
This is why when you order things online, your credit card is typically not charged (i.e. Apple pre-orders) until your item has shipped.
IANAL so I don't know how certain things work such as Tesla deposits (what did they "ship" to you for $2,500?) and so on. But I've heard this is why Kickstarter can't do this directly.
I'm sure there are ways around it, but something to keep in mind.
Not true. Anyone can accept donations, in the US anyway. (Are there really other countries that prevent you from giving money to someone?).
The receiver will have to pay income taxes on the donations; and the giver will not be able to deduct the donation on their own income taxes. That's what requires special status.
This actually makes me realize I never thought about how people have to pay income tax on what they receive via kickstarter; I can't think of any reason they wouldn't. http://www.kickstarter.com/help/taxes
Assuming the people running the kickstarter campaigns are running a business, they only need to pay taxes on net income. I imagine most kickstarter campaigns go through the money fairly quickly so that's probably not typically a problem.
That doesn't seem to make sense. The funded parties generally aren't sending you anything immediately after it's funded either. You're backing a project which eventually may send you an item, after it's been created in some way.
That is money transmission. Once the money leaves the credit card it needs to stay out of the control of kickstarter otherwise they become money transmitters and that's becomes a huge can of worms for them.
To help solve this problem they could do an auth once the project reaches the time limit of their auth requests (eg 7 days before the project ends). Anyone who has the auth fail would be placed in limbo and their pledge withdrawn until they add a valid card. That way the project creators would know exactly how much money they could get if no one pulls out.
"What if this guy "helped" us get funded by the skin of our teeth only to skip out on the bill? We'd still be short a few grand, have to deliver the project to the paying backers and be liable for Kickstarter and Amazon fees."
Wait, I don't get it. If the guy pulls out last minute, the project still won't be funded, no? So there would be no obligation to deliver anything. Am I missing something?
Yeah, apparently this happened to a jewelry project on Kickstarter a while ago - one of the big backers turned out to have used a card without enough funds and the creator wound up on the hook for all the rewards, but without enough money to make them.
It seems like this scenario could be prevented even within the one-week pre-auth limit cited above. That is, pre-auth every donation a week before the campaign ends. The pre-auths that fail would then be subtracted from the total, and a week is long enough to either pay your credit card bill or decide that you can't contribute that much.
It's not the first time it happens - I remember seeing this problem before in HN.
IIRC from that time, this is a bigger problem when you consider that Kickstarter doesn't have any mechanismo for flagging suspicious backers, so even in the (unlikely, IMHO) case that this is an honest mistake from the backer, it will only increase once 4chan and friends hear about this.
What is the motivation for Kicktrolling? Who would a kicktroller be? I don't get it.
i) Person who just wants to be a dick.
ii) Person with personal vendetta against the project creator
iii) Company looking to fend off competitors much the way of clicking lots of links to burn through a competitors ppc on adword.
There's a lot of hate on the internet for many kickstarter projects - "who would fund this crap?!", "how is this receiving money?!". This sort of 'trolling' is probably coming from people who don't want to see certain projects succeed. I'm sure it would happen a lot more if you didn't require proof that you actually had that much money in your bank.
It definitely is. I was bookmarking them once. There's even a snarkier version -- a kicktroll bids at the final second to $1 of funding a failing project. Yes, there is a project that got $49,999 of a $50,000 goal, with a very large troll donation in the last seconds. The owner of Kicktraq (who might read these boards), has a good knowledge of it. He seems to be some kind of savant, and can remember so many campaigns.
I was thinking this as well, minus the HN part. It is similar to what eBay sellers would do with a hot auction. Jump in on the bidding with a second username and run the price up to where either a) someone else outbids them or b) they find the highest bid, retract the bid and then bid right under the highest bidder.
Same scenario with Kickstarter. One could set an ideal funding point and run it up with fake fundings. Catch the attention of media and then hope that the bandwagon happens getting them more than what they are asking. Once funded over the amount, back out your fake fundings and voila - funded.
Well of course the bidding isn't "open" in that sense. You don't even know until after the hammer falls whether the final price came from a bidder or from the auctioneer himself, in order to meet the reserve.
Also, I stated that I found the practice of funding one's own project unobjectionable. I think defunding threatens the entire model of KS, but defunding one's own project is the least objectionable aspect of that. Whatever Kickstarter can do to prevent or ameliorate defunding, within the bounds imposed by credit card practices, they should do.