Leveraging Blockchain Technology in the Construction Industry

Introduction

The construction sector in India is expanding rapidly, with a 10% increase predicted over the next five years. It is the country's second-largest source of employment, employing approximately 50 million people. However, in the construction projects, a slew of additional undesirable factors such as design flaws, inadequate design documents and missed deadlines, budget overruns, and regulatory restraints have slowed several projects across the country (Shah & Ghayas, 2022). These factors cause half of all building projects in India to be delayed. Infrastructure projects need the collaboration of several suppliers and contractors, all of whom must be compensated for their efforts. The present invoice and payment method is sluggish, opaque, and prone to fraud. To achieve its $5 trillion economic objective by 2025 and to continue developing at a rapid rate, the government must use cutting-edge technologies in infrastructure construction. The key constraints identified may be considerably reduced by introducing new technologies in safety, transparency, payment processing speed, and sustainability. Blockchain technology has streamlined this process by generating a transparent and immutable record of all transactions and allowing assets to be tracked from manufacturing through distribution or usage by the end user.

Seebacher and Schuritz (2017) define Blockchain as “a distributed database, which is shared among and agreed upon as a peer-to-peer network. It consists of a linked sequence of blocks (a storage unit of the transaction), holding timestamped transactions that are secured by public-key cryptography (i.e., “hash”) and verified by the network community. Once an element is appended to the Blockchain, it cannot be altered, turning a Blockchain into an immutable record of past activity.” In other terms, Blockchain is described as a growing collection of data known as blocks that are connected together via encryption. Each block includes a hash value of the preceding block, a timestamp, and the user of the data records (Wang et al., 2020). A blockchain is often operated as a public ledger by a peer-to-peer community that follows a mechanism for inter-node communication and verifying new blocks. Once recorded, the contents in any specific block cannot be changed retrospectively without affecting all following blocks, which needs network consensus agreement.

Blockchain technology (BCT) has been deployed in a wide range of sectors, including healthcare, manufacturing, and engineering. Because of its potential benefits, blockchain has sparked the curiosity of building researchers. Smart contracts, for example, are being used to facilitate security and privacy, preserve transaction records, and give anonymous information accessibility (Das et al., 2020). Novel blockchains are being used to solve information gaps in the construction supply chain. Blockchain has been integrated with the building information model (BIM) to improve the BIM working environment (Liu et al., 2019). Through the provision of transparent data and a clear communication of requirements and expectations through smart contracts that precisely describe the parameters agreed upon by the participating parties, BCT adoption can be a successful solution for the better management of construction projects.

The use of blockchain technology has the potential to improve project management and finance functions, including bidding, contract management, project planning, risk assessment, and insurance. Additionally, it would significantly shorten the timeframe and costs needed to transfer money for multinational projects from weeks to minutes (Luo et al., 2019). The construction sector may be able to overcome numerous barriers with the use of latest technologies like the “internet of things (IoT), building information modelling (BIM), and artificial intelligence” when combined with Blockchain technology. A framework stressing innovation, success, and sustainability has arisen because BCT platforms are decentralized, cutting superfluous bureaucracy will increase open communications, and BCT application will prevent disagreements based in the digitalization of corporate operating models. Due to upgraded technologies, improved communication technology, a shorter lead time, a better working environment, and higher-quality products, Industry 4.0 technology is essential for manufacturing industries and their long-term survival (Kamble et al., 2018).