Programming Assignment: Crowdfunding an Invention
ELEN E6883: Introduction to Blockchain Technology
March 19, 2020
1 Background Description
Crowdfunding an invention: Assume that your team invented a wireless chargin
...
Programming Assignment: Crowdfunding an Invention
ELEN E6883: Introduction to Blockchain Technology
March 19, 2020
1 Background Description
Crowdfunding an invention: Assume that your team invented a wireless charging device
for smartphones, called \MagCharging". A MagCharging consists of a plastic case (about
$5) and a copper coil (about $3), as show in Fig. 1. Now, you want to raise funds on
Ethereum blockchain to manufacture 1; 000 MagChargings and sell them on Amazon.
Figure 1: MagCharging: plastic case and copper coil
Background on Crowdfunding: A good invention may take a lot of funds and collective
efforts. You could ask for investments, however, investors prefer projects that are more likely
to get fundings (Series ABCDE... rounds). Therefore, crowdfunding would be an alternative
solution.
Crowdfunding is similar to ICOs (Initial Coin Offering). In particular, a startup team
first announces an invention and a date for fundraising for that invention. Before the crowdfunding campaign begins, the startup needs to release documents such as whitepaper to
introduce the invention. Once the crowdfunding campaign begins, the startup team accepts
contributions from investors on the Ethereum blockchain. If the goal (e.g., $5M) is not
met, the funds will be returned to the investors, reducing the risk for investors. If the goal is
achieved, the startup keeps the fund and then uses it to develop the proposed product. Since
the crowdfunding rules are open and auditable, there is no need for a centralized, trusted
platform. The only fee every investor needs to pay is the transaction gas fee on Ethereum.
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