Secure and Decentralized Crowdfunding Mechanism Based on Blockchain Technology

Abstract

Crowdfunding is a mechanism of raising capital from investors for funding new business ventures. To facilitate crowdfunding, different crowdfunding platforms are available, such as Kickstarter and Indiegogo. Crowdfunding platforms provide a convenient way of raising funds for startups from investors. The major downside of the conventional crowdfunding platforms is that they require users to pay few percentages of the fundraised to the crowdfunding platforms as platform fees (e.g., Kickstarter charges 5% of the total fundraised as platform fee). In addition to platform fee, users are required to pay transaction fees to the payment processors. In this paper, we propose a secure and decentralized crowdfunding mechanism based on blockchain technology. The proposed crowdfunding mechanism eliminates the need of conventional crowdfunding platforms that charge entrepreneurs a sum of money as platform fees. The proposed mechanism allows entrepreneurs to make use of the total fundraised from investors and provides an immutable ledger of transactions between investors and entrepreneurs.