Design and Development of Ethereum based Crowdfunding using Blockchain Technology

Abstract

A growing number of enterprises, including start-up firms, artistic activities, and charitable causes, are being funded through crowdfunding. Traditional crowdfunding websites, on the other hand, struggle with a variety of issues, including prohibitive pricing, a lack of transparency, and fraud concerns. These issues have led to an increase in the use of blockchain technology as a crowdfunding platform. A decentralized, open-source ledger using blockchain technology safely and permanently records transactions. It provides several advantages for crowdsourcing, including decreased costs, increased transparency, and improved efficiency. Blockchain technology has the potential to open up crowdfunding to a wider range of investors, particularly those in developing countries with limited access to traditional financial institutions. Blockchain technology can be utilised for crowdfunding and smart contracts as well. Numerous procedures associated with crowdfunding, such as fund disbursement and investor verification, can be automated thanks to these self-executing contracts. Automation allows for a significant reduction in administrative work and a faster, more precise crowdfunding procedure. The goal of this article is to advance understanding regarding the application of crowdfunding using blockchain technology. We\'ll review the body of literature on blockchain and crowdfunding, take into account the benefits and drawbacks of doing so, and offer a framework for implementing blockchain-based crowdfunding. Our study will contribute to the growing body of knowledge on blockchain and crowdfunding, which will be helpful to policymakers, company owners, and investors interested in using blockchain for crowdfunding.

Introduction

I. INTRODUCTION

Blockchain technology's most fundamental implementation is a distributed, decentralised book that records the history of a digital object. Since the information contained in a blockchain cannot be altered by design, it has the potential to legally disrupt industries such as payments, cybersecurity, and healthcare. Due to its scalable transparency, ability to lower risk, and ability to completely eradicate fraud, blockchain is an incredibly revolutionary and exciting technology. The crowdfunding technique leverages the group efforts of a sizeable number of people, particularly online, and helps to increase the exposure and reach of their networks by utilizing social media and crowdfunding platforms. Actually, crowdfunding is a substitute method of raising money for businesses. In the past, you would have needed to perfect your business plan, market research, and prototypes if you wanted to raise money to launch a company or present a new product. The next step would be to pitch your plan to a small group of affluent people or organizations. It is challenging to generate money because it requires trust between numerous parties, including funders, middlemen, and organizations that serve as a holding place for recipients' temporary finances. The main tool that fundraising organisations employ to get donors to provide money to recipients is trust. Their main challenge in obtaining money for the organisation is earning the trust of contributors. Technology is used by many nonprofit organizations to make it simple for donors to donate money to them. Technology plays a big part in this, but trust is still the most important factor in getting the most money. Since the decentralised network is spread, all of the records are preserved at each node. Crowdfunding is a quick and easy approach to raise money for new project ideas. The problem with the current crowdfunding industries is that they frequently engage in fraud and have greater prices. This kind of problem can be avoided by implementing a crowdfunding strategy using blockchain technology.

II. EXISTING SYSTEM

The length of the undertaking, the expected utilization of the funding, and the task's class were found to be the critical variables in the progress of the current examination's decisions. The at present accessible models neglected to accomplish high precision. The notable, at present working crowdfunding stages, including Kickstarter and Indiegogo, are perceived as remunerations based stages. Crowdfunding sites that depend on gifts incorporate GoFundMe and Crowdrise.

Crowdfunding for admirable missions is conceivable on Indiegogo and even Kickstarter. This should be finished, in any case, inside the limits of every stage's guidelines. For example, an individual will not have the option to give cash that was raised to a foundation or a specific reason.

Around the world, there are a ton of crowdfunding sites. Crowdfunder, AngelList, CircleUp, Fundable, Early Offers, Seedrs, and Crowdcube are a couple of them. These stages are famous in the USA, the UK, and Europe. At the end of the day, it tends to be seen from the ongoing framework that the group is adding to raising support by laying out an organization of brilliant people who have fabulous undertaking thoughts that would help society. In light of issues with the ongoing framework, including security and outside mediation, we want one that is safer and straightforward.

III. LITERATURE SURVEY

Table1- Literature Review

IV. METHODOLOGY

1. Figure out the Issue and the Needs: Identifying the problem that an application is supposed to solve and the requirements that it must meet is the first stage in developing any application. Creating a crowdfunding platform that is more transparent, secure, and efficient than present practises is the task at hand. There may be references to user authentication, project submission and approval, money management, and transaction tracking in the specs.
2. The next stage is to choose a blockchain platform that complies with the standards after they have been set. The Ethereum platform was chosen because it supports smart contracts and offers the features needed for the project.
3. Create the Smart Contract: Self-executing software programmes known as smart contracts, which are recorded on the blockchain, can be used to automate a number of functions on a crowdfunding platform, such as fund distribution, milestone confirmation, and reward distribution. The smart contract needs to be created to satisfy the application's requirements and rigorously tested to guarantee that it performs as planned.
4. Create the Web Application: After the smart contract is created, the web application that will communicate with the blockchain must be created. The programme needs to be user-friendly, safe, and simple to operate. Users should be able to start and fund projects, browse project information, and keep track of their contributions using the front-end. In order to develop and maintain the blockchain, the back-end needs communicate with the blockchain.
5. Test the application: To make sure the programme is operating as expected, it should be thoroughly tested before being deployed. Functional testing should check that every feature is operating as intended, load testing should check that the application can manage a large number of users and transactions, and security testing should check that the programme is safe.
6. Deploy and Maintain the Application: The application can be deployed to a production environment after it has undergone extensive testing. Monitoring the application for performance and security issues, as well as updating it as necessary to solve any problems that may occur, are all parts of maintenance.

V. PROPOSED SYSTEM

To transfer the money to the client, the following conditions must be met:

1. The person who is starting the fund will make a campaign and list it on the site.
2. The webpage will showcase each and every project.
3. To locate the project he or she wishes to sponsor, the financier will browse the portal.
4. Next, based on the amount that he or she is contributing. A supporter or regular contributor is someone who contributes at least the minimum level set by the fund's creator.

Conclusion

In this essay, we discussed alternative, more secure, transparent, and verifiable ways to raise money through crowd fundraising. The use of blockchain technology, which operates on a trust-free manner, can address the security concerns in crowdfunding platforms. Blockchain technology offers simple, safe, and practical ways to trade information and move money. The incorporation of blockchain technology in crowdfunding contracts could offer the much-needed solution to the problems that crowdfunding contracts face in terms of abuse, trust, and confidentiality. The system is programmable and, if necessary, may be expanded to accommodate any further requirements in the Crowdfunding contract. Despite the idealistic perception of blockchain technology, it can solve the majority of secure transactions concerns.

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Copyright

Copyright © 2023 Kaustubh Anavkar, Ashish Vishwakarma, Rohit Sardar, Prof. Vivek Pandey. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.