An Exploratory Study on the Application of Blockchain Technology to the Chinese Ship Auction Market

Exploring The Source Of The Ship Auction Market Development Dilemma

While the maritime online auction model is progressively gaining traction, it confronts many challenges. Foremost among these challenges is the formidable issue of high operational costs, precipitating a sustained erosion of profit margins. In some instances, this predicament has triggered operational challenges and closures for multiple platforms, thereby impeding the advancement of the tangible economy (Huang, 2019). The elevated costs predominantly come from substantial capital investments in the marketing, post-service management, and auction system maintenance sectors. Consequently, the commercial revenue of ship auction platforms experiences a sustained decrease. Simultaneously, online operational costs are heightened, encompassing the procurement and enduring maintenance of server facilities alongside the human and material resources essential for ensuring business data security. Moreover, auction systems are susceptible to single-point failure issues, making the entire system dependent on specific central nodes and constituting a latent threat. In the event of a malfunction in such a node, services may be interrupted, significantly compromising the system’s functionality (Fang & Lei, 2020).

Secondly, a deficiency exists in mechanisms safeguarding user privacy. With the widespread adoption of electronic auctions, online auction platforms have become the principal medium facilitating transactions between buyers and sellers, providing an efficient and convenient trading environment for ship transactions. However, the transformation of the ship transaction model leads to an urgent need for privacy protection. Against the backdrop of the swift development of Internet technology, the ascendancy of electronic auctions has led to widespread concerns among bidders concerning privacy security, notably the risk of potential leakage of sensitive bidder information (Li et al., 2021).

Thirdly, the absence of a unified user credit evaluation system leads to inconsistencies in credit data standards and non-uniform content. Credit data isolation hinders credit information sharing. Consequently, the credit evaluation system plays a pivotal role in credit risk management. It not only evaluates the transactional behavior of both supply and demand sides on the platform but also mirrors the effectiveness of the credit management mechanism (Ge & Wang, 2020). Nevertheless, distinct auction platforms typically lack collaboration, signifying that instances of user default behavior may recurrently appear across diverse platforms. This, in turn, exacerbates the operational risks of auction platforms and escalates the costs for users to obtain financial support.

The distinctive features of the online auction market include its rapid pattern iteration and the ongoing complexity of rule evolution, amplifying the market’s stringent prerequisites for rational consumer decision-making, market transparency, and overall credit levels (Zhang et al., 2021). These requisites not only pertain to robust market development but also have profound implications for user trust. When users lack confidence in the credit evaluation mechanism of the market, they will decrease their engagement in online auctions. This not only decelerates the growth of the auction market but also harms the overall shipping economy. To address this issue, a comprehensive credit evaluation system must be established to ensure the authenticity and accuracy of data. It would aid in reducing credit risks, elevating market transparency, and rebuilding user confidence in online auction platforms, thereby creating more favorable conditions for the sustained growth of the market and safeguarding user rights.