The construction industry is facing trust and transparency issues, which is leading to looser and looser cooperation between stakeholders. Blockchain technology is considered to be one of the disruptive digital technologies that can address the problems faced. However, reviews of papers on the application of blockchain in the construction industry are still not specific enough. Therefore, we aim to discover how blockchain technology can disrupt the construction industry. So what are the main areas of potential applications of blockchain in the construction industry?
Supply chain management
The construction industry is still lagging behind in terms of technology adoption, and its document-centric processes are still performed manually. This includes handwritten records of construction logs, labor worksheets, manual document storage, and calculation of material delivery orders. For some large organizations, they may use centralized platforms to record and manage construction information. This approach lacks transparency among project stakeholders and poses a data security risk when the central party holding the information accidentally deletes or loses it.
Therefore, a decentralized network is needed to manage supply chain data and improve supply chain performance. Blockchain-enabled applications can improve current supply chain management processes by increasing product transparency and traceability. In addition, blockchain ensures that accurate construction supply chain data is entered and validated in a decentralized ledger, enabling contractors to monitor their costs, productivity, profitability, and performance in the supply chain and reduce errors.
Blockchain technology can improve trust between stakeholders in BIM collaboration by remedying the current limitations of BIM with respect to design traceability issues. Blockchain provides a decentralized environment and timestamped nature that captures a chronological record of designs as they are continually added, modified, and altered throughout the project phases.
In addition, the blockchain provides a validation platform where all stakeholders in the blockchain environment can validate design changes previously recorded as "blocks" in the distributed ledger. This further increases trust in the BIM platform among project stakeholders and encourages stakeholder adoption of the BIM system.
Blockchain can address trust issues in construction contracts, especially with regard to payments. The application introduces automated laws into construction contracts by deploying algorithms and rules in a smart contract application. Smart contracts act as automated or event-triggered transaction agents, which allow digitized contracts to run on a distributed ledger and are programmed to automatically execute payments when predefined contract conditions are met in the system, while protecting payment credentials.
Electronic document management
Blockchain technology provides a decentralized electronic document management system where all stakeholders can interoperate and validate information in a decentralized environment before storing it in a distributed ledger. Blockchain technology allows perfect notarization of every creation, deletion and update of information.
Real estate management
Blockchain can represent property ownership and transfer value through smart contracts that encode property as smart property in the blockchain. Rights and obligations arising from agreements to trade asset ownership (on-platform and off-platform assets) can be recorded in the blockchain. A record of ownership of physical assets from one owner to another can be tracked, and that record can be controlled and maintained through the immutable blockchain.
Blockchain-based crowdfunding provides a great opportunity for project clients to launch a secure platform to raise funds for their projects.