Localized crowdfunding

A new proposed method of distributing grants and funding to researchers in the science community:

The new approach is possible due to recent advances in mathematics and  computer technologies. The system involves giving all scientists an annual, unconditional fixed amount of funding to conduct their research. All funded scientists are, however, obliged to donate a fixed percentage of all of the funding that they previously received to other researchers. As a result, the funding circulates through the community, converging on researchers that are expected to make the best use of it. “Our alternative funding system is inspired by the mathematical models used to search the internet for relevant information,” said Bollen. “The decentralized funding model uses the wisdom of the entire scientific community to determine a fair distribution of funding.”

The authors believe that this system can lead to sophisticated behavior at a global level. It would certainly liberate researchers from the time-consuming process of submitting and reviewing project proposals, but could also reduce the uncertainty associated with funding cycles, give researchers much greater flexibility, and allow the community to fund risky but high-reward projects that existing funding systems may overlook.

Interesting. I love Kickstarter and Indiegogo and have backed a lot of projects, but they are very general in nature. I wonder if we'll see more vertical plays sprout up in the crowdfunding space, much like we have in the sharing economy sector (Airbnb, Uber, Dogvacay, etc.). This would be one alternative method of lowering the transaction cost of fund allocation within such verticals.