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A smart contract system for security of payment of construction contracts
Abstract Timely payment of project participants is crucial for successful completion of construction projects, however the construction industry worldwide suffers from poor payment practices. The existing research studied the reasons and the consequences of the payment problem, but very few studies proposed methods for eliminating the problem. In this paper a novel smart contract payment security system named SMTSEC is presented for eliminating or reducing payment issues in the construction sector. The SMTSEC ensures security of payment of construction contracts through an automated computerized protocol that runs on a decentralized blockchain. The potential contributions and limitations of the proposed SMTSEC are studied through a real construction project. The main contribution of the SMTSEC is that it provides a new method for timely and transparent payment of construction projects by guaranteeing security of payment for works under construction without requiring administrative costs and burdens of trusted intermediaries such as lawyers or banks.
Highlights A smart contract system is presented for security of payment of construction contracts. The system guarantees payments by an automated decentralized protocol. The system eliminates administrative costs and burdens of trusted intermediaries.
A smart contract system for security of payment of construction contracts
Abstract Timely payment of project participants is crucial for successful completion of construction projects, however the construction industry worldwide suffers from poor payment practices. The existing research studied the reasons and the consequences of the payment problem, but very few studies proposed methods for eliminating the problem. In this paper a novel smart contract payment security system named SMTSEC is presented for eliminating or reducing payment issues in the construction sector. The SMTSEC ensures security of payment of construction contracts through an automated computerized protocol that runs on a decentralized blockchain. The potential contributions and limitations of the proposed SMTSEC are studied through a real construction project. The main contribution of the SMTSEC is that it provides a new method for timely and transparent payment of construction projects by guaranteeing security of payment for works under construction without requiring administrative costs and burdens of trusted intermediaries such as lawyers or banks.
Highlights A smart contract system is presented for security of payment of construction contracts. The system guarantees payments by an automated decentralized protocol. The system eliminates administrative costs and burdens of trusted intermediaries.
A smart contract system for security of payment of construction contracts
Ahmadisheykhsarmast, Salar (author) / Sonmez, Rifat (author)
2020-08-19
Article (Journal)
Electronic Resource
English
Blockchain technologies , Smart contracts , Project bank accounts , Security of payment , Construction contracts , APP , Actual Progress Payment Amount , Bloc , The Amount to be Blocked , Cong , Contingency Amount for the Blocked Funds , CryT , Cryptocurrency Type , Cur , Fiat Currency Type , DApp , Decentralized Application , EM , Employer , ETH , Ethereum , MC , Main Contractor , PayMC , Progress Payment Amount of the Main Contractor , Pay<inf>i</inf> , Progress Payment Amounts to the Subcontractors and Suppliers , PBA , Project Bank Account , PeriBloc , The Period that the Employer's Funds Will Be Blocked , PeriPay , The Period that the Employer's Blocked Funds Can Only Be Used for Progress Payments , PoW , Proof-of-Work , PoS , Proof-of-Stake , PPP , Projected Progress Payment Amount , SubPer<inf>i</inf> , Percentage Amounts of Payments that Will Be Paid Directly by the Employer to the Subcontractors and Suppliers , WAdEM , Employer's Wallet Address , WadMC , Main Contractor's Wallet Address , WadSC<inf>i</inf> , Subcontractors' and Suppliers' Wallet Addresses
Resolving power imbalances in construction payment using blockchain smart contracts
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