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Post Office Closings: Wait A Minute, Mr. Postman
Construction and Building Engineering Department, College of Engineering and Technology, Arab Academy for Science, Technology and Maritime Transport (AASTMT), Heliopolis, Cairo 2033, Egypt
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.
In 2009, a global financial crisis occurred due to several causes, mainly due to the role played by banks in the centralization system of financial institutes [1]. As a result of this financial crisis, people’s trust in the centralized system was drastically affected. As the main disadvantage of a centralized system is that only one dominant agent is assigned to link others. This assignment is made to organize the transactions between the agents. A centralized system leads to an uncontrollable fee and time process because of the changing rules of transactions by the intuition of the dominant agent [2, 3]. In 2008, Satoshi Nakamoto [4] predicted the centralized system crisis and suggested moving into a decentralized system, leading to the creation of Bitcoin [5]. Bitcoin is a cryptocurrency used for financial transactions, managed and handled by a system called a blockchain.
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The importance of blockchain technology is the security of data for the distributed ledgers among participants, such as transactions inside the decentralized system [6]. The blockchain has a hashing security technique that makes the decentralized system a safe environment for data security [7]. In addition, time-stamping in the hashing system is the linchpin of the security of digital data [6]. Thus, the cryptographic system, a computer system that utilizes cryptography to secure information and communications by operating computer codes, of the blockchain creates a high-security environment for crucial documents. As a result, blockchain has overcome the weaknesses of the centralized system.
The emergence of blockchain in Bitcoin came within the technology of decentralization recording ledger that guarantees security [8]. These records are used for the confirmation of transactions for the financial activities that are stored inside blocks. The block is added to the system by the mining processes, the procedure of adding transactions to the substantial distributed general ledger of existing transactions (i.e., the blockchain) where complex calculations are performed by the users as miners. The mining process is an indication for the confirmation of transactions that represents the users’ witnesses of them. These confirmations are necessary for the contract administration activities, which make the records more resilient and transparent. Subsequently, and due to the block mining, the transaction is recorded inside the block. The organization of the clashes resulting from the crowded transactions is operated by the time-stamping technology [6]. This organization leads to the blocks’ mining for the longest path of the block chaining. The miner creates the block by complex calculations using processors, and once the block is created, the miner will be awarded a cryptocurrency bonus. The bonus motivates the users such as owners and stockholders to use the system and raises the value of the cryptocurrency due to its frequent use. This mining process is also called “proof of work” as the bonus proof of the mining activity [5]. As soon as the block is created and added to the system, this block will be connected to the other blocks by using cryptographic links that rely on a hashing technique. Hashing is a security tool that integrates with the generation of blocks [9, 10]. Figure 1a illustrates the hashing technique named SHA-256. The newborn block has its own hashing that is linked with older block hashing. Once any attacker tries to change the data in this block, the hash changes in the manipulated block, and the difference resulting from manipulation in the hash will be detected, as clearly shown in Figure 1b. This hashing linking strategy helps the blockchain obtain security as a consequence of the elimination of the dominant agent’s role.
The cryptocurrency blockchain is a system of the blockchain in which the block contains transactions for digital currency instead of data [11]. Numerous platforms produced cryptocurrencies such as Bitcoin, Ether, Litecoin, etc. Some of these platforms (e.g., Ethereum) were developed to use smart contracts. Blockchain is not only limited to financial transactions but also can be used as a multi-tasking platform. As a result, it can be transformed into a programmable platform that can include a set of programs such as smart contracts. Thus, any program can be coded inside a block that is distributed among the blockchain users. The term of the contract comes from the agreement of all users to run the program simultaneously through the blockchain distribution system. The coded program is immutable to changes by the security system of the blockchain [2, 12]. As a result of these properties, blockchain and smart contracts have been used in many complex industries [13], such as medical [14, 15], energy [16, 17], and insurance [18], as well as construction [19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46].
The Digital Generation
In the construction industry, the contractual parties (i.e., owner, consultants, main contractors, subcontractors, and suppliers) and the documents are extremely complex in their types and procedures [19]. In addition, the workflow of the construction industry is changeable and challenging during different construction phases [20]. Thus, the blockchain is a suitable technique that can be used to overcome these challenges. Through blockchain, the parties can be represented as users, and the transactions can be expressed in numerous shapes such as documents, materials, and financial flow. Particularly, the financial transaction is the most important of these transactions, making it a promising research field for cryptocurrency.
Several studies showed the potential for using the blockchain and smart contracts in the construction industry (Table 1). J. Mason [21] used blockchain and smart contracts in Building Information Modeling (BIM) to represent document modeling at different levels of complexity and coordination of clashes. Some of these clashes were a result of management issues arising from several questions, for example: Who owned the model? How to modify the model in the construction industry? and so on. J. H. Yoon and P. Pishdad-Bozorgi [22] concluded that blockchain and smart contracts were most commonly used in construction supply chain management. Z. Wang et al. [23] developed a framework to cover the poor traceability and real-time information leakage in the precast concrete supply chain. A. Tezel et al. [24] developed an empirical discussion model by Ethereum that dealt with: project bank accounts, reverse auction-based tendering for bidders and asset tokenization for project financing. The validation for this model was tested and ensured by the feedback of three workshop groups but not applied to real-life implementation. Amer A. Hijazi et al. [25] integrated BIM and supply chain management to support reliable digital deliverables and to transfer values in construction
In the construction industry, the contractual parties (i.e., owner, consultants, main contractors, subcontractors, and suppliers) and the documents are extremely complex in their types and procedures [19]. In addition, the workflow of the construction industry is changeable and challenging during different construction phases [20]. Thus, the blockchain is a suitable technique that can be used to overcome these challenges. Through blockchain, the parties can be represented as users, and the transactions can be expressed in numerous shapes such as documents, materials, and financial flow. Particularly, the financial transaction is the most important of these transactions, making it a promising research field for cryptocurrency.
Several studies showed the potential for using the blockchain and smart contracts in the construction industry (Table 1). J. Mason [21] used blockchain and smart contracts in Building Information Modeling (BIM) to represent document modeling at different levels of complexity and coordination of clashes. Some of these clashes were a result of management issues arising from several questions, for example: Who owned the model? How to modify the model in the construction industry? and so on. J. H. Yoon and P. Pishdad-Bozorgi [22] concluded that blockchain and smart contracts were most commonly used in construction supply chain management. Z. Wang et al. [23] developed a framework to cover the poor traceability and real-time information leakage in the precast concrete supply chain. A. Tezel et al. [24] developed an empirical discussion model by Ethereum that dealt with: project bank accounts, reverse auction-based tendering for bidders and asset tokenization for project financing. The validation for this model was tested and ensured by the feedback of three workshop groups but not applied to real-life implementation. Amer A. Hijazi et al. [25] integrated BIM and supply chain management to support reliable digital deliverables and to transfer values in construction
