Crowdfunding Using Blockchain

Kavin Marx and Aishwarya Rajesh

OBJECTIVE
Venturing Crowdfunding using Smart Contracts in Blockchain

ABSTRACT
Crowdfunding is an online money-raising strategy that began as a way for the public to
donate small amounts of money to help innovative people finance their projects. This
project is to propose smart contract for crowdfunding using blockchain technology.
Through this, we can provide a safe, secure, and transparent way for crowdfunding. The
work of this project is to provide interactive forms for campaign creation, contribution of
money, viewing of campaigns, request approval and finalizing requests through which
both campaign creators and contributors can easily create and fund the campaigns. The
contributor can be able to track the money that they sent. The Blockchain will record all
the transaction and store as a block. An appealing feature of blockchain technology is
smart contracts. Blockchain has to facilitate, execute and enforce an agreement between
untrusted parties without the involvement of a trusted third party. To do so an executable
code that runs on top of the blockchain has to be implemented. The executable code is
the smart contract.

Keywords:
Block Chain, Crowdfunding, Smart Contracts

INTRODUCTION
The blockchain is an incorruptible digital ledger that records every transaction. It is a
distributed system thus all the records are stored in every node in the decentralized
network. Smart Contracts are the running applications in the blockchain allowed by
Ethereum. It allows running of all the Smart contracts. Crowdfunding provides an easy
way to find cash for innovative project ideas. The issue with the current crowdfunding
organizations charging high expenses and occasionally there were tricks occurred.
Actualizing a crowdfunding procedure in blockchain will assist with staying away from
these sorts of issues. By consolidating Peer to Peer shrewd agreement for crowdfunding
eliminates the customary transaction charges and platform expenses typically connected
with other crowdfunding stages, for example, Kickstarter. The target of our undertaking
is to make a solid application with the goal that each groundbreaking thought gets life.
We have planned a crowdfunding site which is a blockchain based website. We give a
simple to utilize interface for
everybody to make and post their thoughts on this application. These thoughts at that
point become public to everybody. Any individual who wishes to help their thoughts can
contribute. Every one of these cycles are done in an intuitive way. Blockchain is fairly
new technology, there are only few studies and researches available on the internet.
Blockchain can be characterized as a distributed database of records of all transactions
that have been executed and shared among interest members. The attributes of
blockchain incorporates decentralization of information, persistency, anonymity and
auditability. There are two primary parts in blockchain framework, which are transaction
and block. Transaction speaks to the activity set off by the member, while the block is a
collection of information recording the transaction and other related subtleties, for
example, the right sequence, timestamp of creation, and so on. The transaction records,
or blocks, in a blockchain are connected together cryptographically, delivering them
tamper proof. This implies each block that have been embedded can't be changed or
erased. To achieve reliability, blockchain uses consensus algorithms

METHODOLOGY
The project is a web application which is basically an enhancement of the existing crowd
funding systems. In normal Crowdfunding’s there is no security ensured for contribution
amount. So, smart contract of Ethereum
platform which is an application of blockchain can be used in order to solve this issue.
Blockchain is a decentralized distributed ledger system that accesses, verifies, and
transmits network data through distributed nodes. An Ethereum based smart contract is a
cryptographic box which stores information, processes inputs, writes outputs and is only
accessible to the outside if certain predefined conditions are met and the contracts in
Ethereum are written in special language called solidity. In practice, Ethereum allows for
an easy implementation of such smart contracts and in addition Ethereum offers
developers online compilers of solidity code. Smart contract is written in such a way that
the entire amount funded by the contributors will safely be kept in smart contracts so
that no one can modify it or steal it. The amount will not be directly given to campaign
creator rather it will be held in smart contract itself. If the campaign creator wants to use
this amount, he/she has to create a spending request. Then the approvers (people who
have contributed to the campaign) should approve the request created by the campaign
creator. If the request gets majority no of approvals/votes as shown in then the amount
can be sent to the vendor specified by the campaign creator. This makes the voting
system more secure and also cost efficient while guaranteeing the voters privacy.
Campaign creator will be able to finalize the payment once the required votes are
obtained. In this the security is increased and also the
peoples/contributor’s opinion is taken. In the existing framework, the issue is that the
organizations charge intensely to both the benefactor and the client. There is no track of
the records of the cash, straightforwardness, communication between the investor and
the client in building up the project. The trust is the fundamental issue with regards to
the crowdfunding with the current organizations. None of these organizations give the
benefactor guarantee policy.
– Not Transparent
– High Charges
– Donor guarantee policy not available
– No track of Records
In the proposed framework, the mission makers will post their task thoughts in the
mission and the intrigued individuals will donate the fund to the undertaking thought.
Where it concedes from the old crowdfunding is that all the cash is currently digital
currencies like ether. All ether coin will be recorded and keep tracks in the blockchain,
where the blockchain is an immutable ledger. The Donor has power over the subsidized
cash. With the Request endorsement module, the donor has full command over the cash
they invested. Just in the event that one by two of the investors need to approve the
solicitation made by the creators. By giving control on invested money the Trust is
gained.
– Trust
– Control over money
– No charges
– Donor Guarantee Policy
– All transactions are recorded
– Money is Stored Securely.
 GANTT CHART

PROPOSED ALGORITHM
Step 1: Create Metamask account.
1.1: Then create an Ethereum account on Rinkeby Test Network.
Step 2: Create Smart Contract.
2.1: Create Campaign Contract.
2.2: Create Factory Contract.
Step 3: Deploy Campaign Factory contact. (It creates instances of Campaign Contract)
Step 4: Deploy Campaign contract.
Step 5: Start the server by running the command “npm run dev” in terminal.
Step 6: Open localhost:3000 in browser:
Main page will be loaded which shows the list of all campaigns created so far.
Step 7: Create a campaign (By clicking Create Button) by entering minimum contribution in
wei.
Step 8: View a particular campaign detail:
The view campaign page shows:
•Address of Manager who created the campaign.
•Minimum contribution.
•Number of requests.
•Number of approvers.
•Campaign balance.
Step 9: Contribute to the campaign to become approver.
Step 10: Manager creates the spending request to spend the campaign money.
The request is created by providing:
•Description about the request.
•Amount to be spent on that request.
•Address of the recipient.
Step 11: Request are approved by the approvers.
if (approvalCount > (approversCount/2))
{
Then request is approved.
}
else
{
Request is not approved.
}
Step 12: Manager will finalize the request if it is been approved and the requested amount
will be sent to the
recipient.
FLOW CHART
 CONCLUSION
Implementation of blockchain technology to crowdfunding platform provide more
transparent transactions. As a result, users can feel more confident when they want to donate
to a campaign. The application of smart
contract on spending request also can help contributors to know how their money are being
spent. The purpose of a smart contract based solution is to enable secure way of crowd
funding by ensuring that the money donated by the investors is safe and also each and every
step taken in the startup with help of donated money involves investor’s opinion i.e.
whenever the campaign creator wants to spend the money he/she has to make a spending
request where the purpose of using the money, to whom the money is being sent(vendor) and
the amount needed should be mentioned. The main advantage of using the smart contract is
the concept of blockchain that it is resilient against many threats. Also, it provides many
features like improved reliability, faster and efficient operation. Web Application has been
computed successfully and was also tested by taking “test cases”. It is user friendly, and has
required options, which can be utilized by user to perform the desired
operation. The goals achieved by the website are:
 creating a campaign
 Contributing to campaign
 Creating a spending request
 Approving the spending request
 Finalizing the request