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Article: Blockchain-based smart contract for smart payment in construction: A focus on the payment freezing and disbursement cycle

TitleBlockchain-based smart contract for smart payment in construction: A focus on the payment freezing and disbursement cycle
Authors
Keywordsblockchain
construction project
payment dispute
smart contract
smart payment
Issue Date27-Jan-2022
PublisherHigher Education Press
Citation
Frontiers of Engineering Management, 2022, v. 9, n. 2, p. 177-195 How to Cite?
Abstract

Late payment, and indeed no payment, is a rampant and chronic problem that has plagued the global construction industry for too long. Recent development in blockchain technology, particularly its smart contract, seems to provide a new opportunity to improve this old problem. However, this opportunity is largely unexploited. This study aims to develop a blockchain-based smart contract (BBSC) system for smart payment in the construction industry by focusing on the fundamental cycle of payment freezing (sometimes also synonymously called payment guarantees) and disbursement application. Firstly, a BBSC framework, containing three processes of (a) initiation and configuration, (b) payment freezing, and (c) disbursement application, is developed. Next, based on the framework, the system architecture of the BBSC system, containing three layers of (1) Infrastructure as a Service (IaaS), (2) Blockchain as a Service (BaaS), and (3) Software as a Service (SaaS) is proposed and elaborated. Finally, based on the system architecture, a BBSC prototype system is developed using a real-life modular construction project as a case study. It was found that the prototype system can improve the certainty and efficiency of the progress payment, thereby enabling smart payment in construction transactions. Without advocating radical changes (e.g., the contractual relationships or the intermediate role of banks in modern construction projects), the prototype can be developed into a real-life BBSC system that can work compatibly with current advancements in the field. Future works are recommended to fine-tune the findings and translate and implement them in real-life applications.


Persistent Identifierhttp://hdl.handle.net/10722/329145
ISSN
2023 Impact Factor: 9.1
2023 SCImago Journal Rankings: 0.953
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorWu, Liupengfei-
dc.contributor.authorLu, Weisheng-
dc.contributor.authorXu, Jinying-
dc.date.accessioned2023-08-05T07:55:38Z-
dc.date.available2023-08-05T07:55:38Z-
dc.date.issued2022-01-27-
dc.identifier.citationFrontiers of Engineering Management, 2022, v. 9, n. 2, p. 177-195-
dc.identifier.issn2095-7513-
dc.identifier.urihttp://hdl.handle.net/10722/329145-
dc.description.abstract<p>Late payment, and indeed no payment, is a rampant and chronic problem that has plagued the global construction industry for too long. Recent development in blockchain technology, particularly its smart contract, seems to provide a new opportunity to improve this old problem. However, this opportunity is largely unexploited. This study aims to develop a blockchain-based smart contract (BBSC) system for smart payment in the construction industry by focusing on the fundamental cycle of payment freezing (sometimes also synonymously called payment guarantees) and disbursement application. Firstly, a BBSC framework, containing three processes of (a) initiation and configuration, (b) payment freezing, and (c) disbursement application, is developed. Next, based on the framework, the system architecture of the BBSC system, containing three layers of (1) Infrastructure as a Service (IaaS), (2) Blockchain as a Service (BaaS), and (3) Software as a Service (SaaS) is proposed and elaborated. Finally, based on the system architecture, a BBSC prototype system is developed using a real-life modular construction project as a case study. It was found that the prototype system can improve the certainty and efficiency of the progress payment, thereby enabling smart payment in construction transactions. Without advocating radical changes (e.g., the contractual relationships or the intermediate role of banks in modern construction projects), the prototype can be developed into a real-life BBSC system that can work compatibly with current advancements in the field. Future works are recommended to fine-tune the findings and translate and implement them in real-life applications.</p>-
dc.languageeng-
dc.publisherHigher Education Press-
dc.relation.ispartofFrontiers of Engineering Management-
dc.rightsThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.-
dc.subjectblockchain-
dc.subjectconstruction project-
dc.subjectpayment dispute-
dc.subjectsmart contract-
dc.subjectsmart payment-
dc.titleBlockchain-based smart contract for smart payment in construction: A focus on the payment freezing and disbursement cycle-
dc.typeArticle-
dc.identifier.doi10.1007/s42524-021-0184-y-
dc.identifier.scopuseid_2-s2.0-85138454026-
dc.identifier.volume9-
dc.identifier.issue2-
dc.identifier.spage177-
dc.identifier.epage195-
dc.identifier.isiWOS:000749154700001-
dc.identifier.issnl2095-7513-

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