Financial Contract Administration in Construction via Cryptocurrency Blockchain and Smart Contract: A Proof of Concept

Abstract

The blockchain that uses cryptocurrency is a paradigm shift in the way of data storage, retrieval, and verification due to the concept of decentralization. This paradigm is essential to ensure the security of crucial data in any project. Adding a smart contract to the blockchain would facilitate the automation of various processes. Thus, the cryptocurrency blockchain that uses the smart contract can be considered a suitable platform for an ecosystem of many industries. The construction industry needs a highly secure automated management system due to its complex contractual relationships and transactions between parties. Therefore, integrating the blockchain with the smart contract creates the most appropriate ecosystem to be developed. This study introduces an ecosystemic prototype using a programmable smart contract within a novel cryptocurrency blockchain for construction. The purpose of the prototype is to guarantee a decentralized system as an independent economic environment for the construction industry. The system guarantees the security of financial transactions and focuses on the payment clauses in the construction contract as well. The results depended on three well-known hypothetical case scenarios from the construction site and were displayed in the form of extracted access data tables. The prototype proved the efficiency of the decentralized system for the construction industry by minimizing human-factor interference in the transaction process and thus reducing time waste and cost.

Unlocking Blockchain in Construction: A Systematic Review of Applications and Barriers

“…One of the key features of blockchain is secure transactions, which is critical to the construction industry, and solutions to ensure the security of payment systems have been proposed [74][75][76]. Within construction contracts, blockchain-enabled smart contracts can ensure secure financial transactions and reduce the need for human interference, saving time and cost [77]. A hybrid decentralized blockchain system was implemented to resolve construction disputes [78].…”

Integration of Blockchain-Enabled Smart Contracts in Construction: SWOT Framework and Social Network Analysis

“…Facility management [16,17,19,22,24,30,37,40,44,70,73,88,105,107,129,132,155, 165] 18 7 Contract management. administration [1, 4, 10, 14, 15, 17, 18, 21, 23, 25, 29-31, 33, 35, 44, 49, 50, 69, 70, 86, 95, 99, 109, 112, 122, 128, 129, 133, 143, 149, 150, 154, 163, 169, 172, 186, 192, 196] 39 8 Quality management (Compliance checking) [1, 9, 10, 17, 20, 23, 29, 30, 40, 44, 48, 61, 65, 73, 89, 97, 104, 112, 118, 120, 124, 132, 134, 138, 145, 147, 150, 163-166, 174, 180, 181, 190 [15-17, 25, 30, 40, 43, 53, 61, 69, 73, 86, 125, 139, 147, 158, 159, 169] 18 Change management [1,4,43,54,115,120,133,136,147,150,166,170] 12 Risk management [33,37,73,95,106,121,134,150,181] 9 Subcontract management [10, 31, 35, 39, 42, 48, 57, 58, 60, 68, 95, 98, 99, 102, 110, 111, 114-117, 136, 143, 150, 153, 161, 163, 175, 179, 186, 191] 30 Integrated technology-BIM…”

“…The construction sector is marked by inherent adversarial relationships and legal conflicts that adversely impact a project's cost and duration-two critical elements of the triad of construction performance constraints [1,2]. Trust is a central concern, affecting inter-organizational relationships and stakeholder dynamics, leading to cautious behavior and contractual breaches [3][4][5].…”

Sosyal Medyada Kripto Para: Coin Piyasasına Yönelik Dijital Söylemin Analizi

“…Cryptocurrencies are helpful in many applications, from online purchases and investments to remittances and complex financial contracts. Despite their growing popularity, the acceptance of cryptocurrencies is not yet universal, and their use is subject to a diverse spectrum of regulations across different nations, reflecting the global financial community's ongoing efforts to understand and integrate this new form of currency (Abubakar et al, 2019;Ibrahim et al, 2022). A notable feature of cryptocurrency transactions is their balance between anonymity and transparency.…”