CROWDFUNDING PLATFORM USING

BLOCKCHAIN
BACHELOR OF TECHNOLOGY
In
COMPUTER SCIENCE AND ENGINEERING
by
Saurabh Kumar Prajapati (2001100100054)

Awadhesh Kumar Verma (2001100100019)

Ramashankar Maury (2101100109004)

Astitva Singh (2001100100018)

Department of Computer Science and Engineering

Synopsis

ABSTRACT
Blockchain-based crowdfunding is an innovative approach to crowdfunding. Traditional
platforms are vulnerable to data breaches, high fees and fraud due to the anonymity of the
user’s identity. While these risks can be mitigated by the immutability and distribution of the
blockchain, there is no central control to make it transparent. To solve these problems, digital
identity management with a blockchain foundation has been proposed.
This article focuses on donation-based transactions using Ethereum. Many tasks can be
performed simultaneously through this system, which uses the Solidity language to create
smart contracts. In this research, we explore user financial platforms. This article provides a
comprehensive review of the literature, identifies the strengths and limitations of blockchain-
based crowdfunding platforms, examines users’ understanding of blockchain, and evaluates
the impact of blockchain on crowdfunding. This project proposes a blockchain-based
crowdfunding network that can provide privacy, security and decentralization through the use
of Ethereum smart contracts.
Keywords: Crowdfunding , Smart Contract , Blockchain ,Ethereum ,Cryptocurrency.

INTRODUCTION
Crowdfunding has become one of the most popular methods of raising funds for any project,
cause, or individual in need. With the launch of Covid, Crowdfunding activities have been
increased all around the world, ranging from tiny campaigns to help individuals acquire
oxygen and medical assistance to huge funds like PM Cares. Contributors, crowdfunding
platforms, and project administrators were the primary players in the crowdfunding event.
[Link], [Link], and [Link] are some of the most popular
crowdfunding platforms. The biggest advantage of crowdfunding is that it can quickly raise
the funds required.
Blockchain is a decentralized, immutable database that makes it easier to track assets and
record transactions in a corporate network. A tangible asset (a house, car, cash, or land) is
different from an intangible asset (intellectual property, patents, copyrights, branding) .On a
blockchain network, virtually anything of value may be recorded and traded, lowering risk
and lowering costs for all parties involved. Information is the lifeblood of any business. The
faster and more precise it is, the better. Because blockchain delivers immediate, shareable,
and entirely transparent information recorded on an immutable ledger that can only be
viewed by permissioned network users, it is excellent for conveying that information. Orders,
payments, accounts, production, and much more can all be tracked on a blockchain network.
Because members share a single version of the truth, you can see all the intricacies of a
transaction from beginning to end, providing you more confidence and opening up new
efficiencies and opportunities.
Smart contracts are an integral part of the Ethereum blockchain and are key to its
development. They function like real-world contracts but are entirely digital, being computer
programs stored on the blockchain. These programs automatically execute when predefined
conditions are met, allowing anonymous parties to transact securely and trustingly without
the need for a central authority. Solidity and Vyper are programming languages used to create
Ethereum smart contracts. MetaMask is a cryptocurrency wallet that provides access to the
Ethereum network through browser extensions or a mobile app. Created by ConsenSys
Software Inc., MetaMask allows users to securely interact with decentralized applications,
manage account keys, broadcast transactions, send and receive Ethereum-based coins and
tokens, and store account keys through a suitable web browser or the mobile app’s built-in
browser.

PROPOSED METHOD
This system is aimed to overcome the above major shortcomings with current crowd funding
platforms. Crowd fundraising involves a large number of transactions, it is necessary to
manage and document them legally. As a result, a smart contract is utilized, which is a
transaction protocol that automatically executes, controls, and documents transactions on
behalf of project creators and investors in accordance with the agreement. Any web-based
application is a centralized application which means that everything done on the platform is
controlled by a single company server. Decentralized application is offered based on the
Ethereum Blockchain, in which all campaign information, contributions, withdrawal requests,
and funds are stored on a blockchain network that is open to all. The concept is called
"Distributed ledger technology." The distributed ledger and its contents are available to all
network participants. Here, the transaction uses PoS in which it is more fast and secure than
existing PoW. It is energy efficient in which the nodes are not competing against each other
to attach a new block to the blockchain, energy is saved. Proof of stake cuts out the need for
complex computations. So, it beats proof of work when it comes to energy efficiency. A
transactional record that cannot be changed. Transactions are recorded only once with this
shared ledger, reducing the duplication of effort. After a transaction is recorded to the shared
ledger, no participant can edit or tamper with it. If a mistake is found in a transaction record,
a new transaction must be entered to correct the problem, and both transactions are then
visible. This means that all nodes on the blockchain may see and store funds and transactions
preventing data from being held on a single or centralized server. As a result, safeguarding
the funds from falling into the wrong hands and being misused is an elegant and practical
solution to the situation at hand.

METHODOLOGY
In the context of the literature review, a qualitative review of existing documents on
blockchain-based solutions in crowdfunding platforms was included. This will include
identifying related documents, reviewing their contents, and synthesizing key findings and
insights from documents includes a design for searching and data selection, as well as critical
evaluation of the quality and accuracy of data, information. Research also includes a meta-
analysis or analysis of data to identify trends, patterns, and areas for future research. Also
analyze research content and data, scan and select data according to inclusion criteria, extract
and analyze data from selected data, and collect results to determine current state of
knowledge in the field. An investigation may also include a critical assessment of the quality
of the studies reviewed and an assessment of the overall strength of the evidence.

ADVANTAGES
Transparency and Trust: Blockchain provides a transparent and immutable ledger of
transactions, ensuring that all crowdfunding activities and transactions are recorded and
visible to all participants. Smart contracts on the blockchain can automate the execution of
crowdfunding agreements, ensuring transparency and reducing the need for intermediaries.
Participants can verify and audit the transactions and flow of funds, fostering trust between
project creators and backers.
Security: Blockchain utilizes advanced cryptographic techniques to secure transactions,
making it highly resistant to fraud, tampering, or unauthorized access. Funds raised through
crowdfunding can be securely stored in blockchain-based wallets, reducing the risk of theft or
loss associated with traditional banking systems.
Global Accessibility: Blockchain technology enables global participation in crowdfunding
campaigns, regardless of geographical location or access to traditional financial
infrastructure. Anyone with an internet connection and a cryptocurrency wallet can
participate in crowdfunding campaigns, fostering inclusivity and expanding the pool of
potential backers.
Immutability: Blockchain is a distributed ledger containing numerous copies, making it
nearly hard to edit a single transaction without changing all the copies at once. Because of
this, using blockchain in the crowdfunding increases trustworthiness and fraud resistance.
Reduced Intermediaries and Costs: By leveraging blockchain, crowdfunding platforms can
eliminate or reduce the need for intermediaries, such as banks or payment processors, which
can lower transaction fees and administrative costs. Smart contracts can automate the
distribution of funds and disbursements to project creators, streamlining the process and
reducing overhead expenses.

DISADVANTAGES
Complexity and Technical Knowledge: Blockchain technology is still relatively complex
and requires specialized knowledge for development, implementation, and maintenance. This
can create barriers for non-technical users or project creators who may not be familiar with
blockchain concepts or have the technical expertise to navigate the platform.
Volatility and Risk: Cryptocurrencies, often used for transactions on blockchain-based
crowdfunding platforms, can be subject to significant price volatility. This introduces risk for
both project creators and backers, as the value of funds raised or pledged can fluctuate during
the campaign, affecting the project’s financial viability or backers’ potential returns.
Scalability: Due to the fixed size of the block used to store information, it is one of the main
shortcomings of blockchain technology. Due to the 1 MB block size, only a few transactions
may be stored on a single block.
Storage: The fact that blockchain databases are kept on every node of the network causes a
storage problem; as the volume of transactions rises, more storage space will be needed.
Time-Consuming: Since miners must compute nonce values numerous times to add the next
block to the chain, this time-consuming procedure needs to be sped up to be employed for
commercial purposes.
Irreversibility of Transactions: Once transactions are recorded on the blockchain, they are
typically irreversible. In the context of crowdfunding, this means that backers may not have
recourse if a project fails to deliver on its promises or turns out to be fraudulent. This lack of
dispute resolution mechanisms can pose risks for backers who might encounter project-
related issues.

CONCLUSION
The crowdfunding platform is using blockchain technology to improve transparency and
reduce the risk of fraud. Traditional crowdfunding methods have often been criticized for
their lack of transparency and susceptibility to fraud, and this project aims to address these
issues by providing a more trustworthy platform for people to contribute their money to good
causes. By using blockchain, we hope to build confidence and trust among users, allowing
them to feel more secure in their donations. In crowdfunding, blockchain allows
decentralization; this means that no single platform or group of platforms manages smart
contracts, making it transparent to the blockchain for everyone . A peer-to-peer network is
that adheres to co-protocols and can use new blocks between nodes, so no one can modify a
block without approval from more than 50% of the nodes in the blockchain. it does.
trustworthy. Anyone can use the blockchain to create projects on the site, and anyone with a
internet connection can donate to the project. Participants needn’t worry about promises that
look nothing like the traditional financial aid. The smart contract will process all transactions,
so all funds will be stored in smart contract instead of being sent to third parties. Blockchain
gives more freedom to project managers and partners so that partners can be part of the
project. Overall, the survey shows the growing interest and potential of blockchain
technology in crowdfunding.