bit-Tech
Vol. 8 No. 3 (2026): bit-Tech - IN PROGRESS

Development of Blockchain-Based Escrow System with IPFS Protocol for Secure Digital Transactions

Pelean Alexander Jonas Sitompul (Universitas Pembangunan Nasional "Veteran" Jawa Timur)
Henni Endah Wahanani (Universitas Pembangunan Nasional “Veteran” Jawa Timur)
Achmad Junaidi (Universitas Pembangunan Nasional “Veteran” Jawa Timur)



Article Info

Publish Date
10 Apr 2026

Abstract

Digital transactions are essential to modern economic activities, yet challenges related to trust, transparency, and security persist. This research develops a blockchain-based escrow system integrated with the InterPlanetary File System (IPFS) to address these issues through a decentralized, tamper-resistant architecture. The primary aim is to create an escrow platform that minimizes human intervention while ensuring data integrity, thereby overcoming limitations found in traditional escrow mechanisms that rely heavily on legality and banking institutions. This study demonstrates the feasibility of blockchain technology enhancement to existing escrow models, especially for traders conducting high-value digital transactions. The system enables secure interactions between buyers, sellers, and viewers through a decentralized application (dApp) that assigns user roles and executes transaction logic. Funds are securely locked within the smart contract, while digital assets are stored in IPFS. In cases of dispute, the viewer can cancel the transaction, triggering an automated refund to the buyer and deletion of associated asset data to maintain fairness and security. Smart contract development and testing are carried out using the Hardhat framework before deployment to networks such as the Ethereum-based Sepolia Testnet. The results show that the proposed system reduces transaction risks, increases user trust, and enhances transparency throughout the digital transaction process. This research introduces a practical framework for decentralized escrow systems and provides valuable insights for industries seeking secure, blockchain-driven transaction solutions. The system developed in this study serves as a reference model for integrating traditional transaction with blockchain technology, encouraging broader adoption and future exploration of decentralized systems.

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Journal Info

Abbrev

bt

Publisher

Subject

Computer Science & IT

Description

The bit-Tech journal was developed with the aim of accommodating the scientific work of Lecturers and Students, both the results of scientific papers and research in the form of literature study results. It is hoped that this journal will increase the knowledge and exchange of scientific ...