Crowdfunding Fraud Prevention using Blockchain

Abstract

Online crowdfunding enables people to raise funds for their project. People who are interested in a project can donate by making an online transaction. The donated money goes to the project manager, which he uses to complete the project or to make a product. This existing method of online crowdfunding has a major drawback. It does not allow contributors to have control over the money they have contributed. Since in the existing method the project manager has all the control over the money contributed he can very easily perform malicious activities. Here we address this problem faced by the existing online crowdfunding platforms by using ethereum network and smart contract. The development of Blockchain technology has allowed businesses to build decentralized models. It has derived new methods to conduct transactions and make agreements. One of the technologies that propose an alternative to the traditional model is the smart contract. A smart contract is similar to a contract in the physical world, but it is digital and represented by a tiny computer program stored in a blockchain. These smart contracts can be used to implement logic. A method has been proposed here that uses smart contract to manage all the activities performed in a crowdfunding campaign. The proposed method has been implemented and its various features are tested by funding campaigns on rinkeby test network.