A study on the potential applications of blockchain technology in the construction industry in Hong Kong

Abstract

Blockchain is gaining popularity among various businesses a few years ago and the shared ledger has seen different usage and is very flexible in improving different business procedures. Corporations can complete transactions securely through blockchain. Essentially, a blockchain is a digital shared ledger that records transactions or agreements. Transactions inside a blockchain are encrypted by cryptography and are immutable. Every member owns the same copy of the ledger and there is no central authority controlling the network. The high decentralization and security nature of blockchain has contributed to different uses of blockchain. The most well-known use of blockchain is cryptocurrencies such as Bitcoin. This study aims to investigate the potential applications of blockchain technology in the construction industry in Hong Kong. Qualitative secondary data will be collected from reports, academic sources and credible information from official websites. Two case studies including IBM food trust and Ethereum-based smart contract payment system are studied. This paper also looks into the benefits of blockchain including boosting payment efficiency and providing high traceability and transparency in supply chains. It is also discovered that the limitation in legislation, organizational issues and industry culture have restricted the extensive use of blockchain in the construction industry. The paper points out that extensive blockchain implementation in the Hong Kong construction industry will only be feasible after these difficulties are resolved.