Blockchain technology: Is it hype or real in the construction industry?

Abstract

Abstract The dawn of the 21st century has seen the advent of many technologies targeting commercial and financial sectors. These include Big Data, Internet of Things and FinTechs such as blockchain. Blockchain is a type of a distributed database that is used to replicate, share, and synchronise data spread across different geographical locations such as multiple sites, countries, or organisations. The main property of blockchain is that there is no central administrator or centralised data storage mechanism. Consensus algorithms govern the peer-to-peer decentralised network. Numerous benefits and applications of blockchains have resulted in it becoming popular among a broad spectrum of businesses, but is it the case in the construction industry? Given, the backward nature of the construction industry in digitalisation and its reticence to change, it becomes important to analyse the potential impact of Blockchains as a potential disruptive technology. Although there exists a significant research gap and the potential possibility to test blockchain in the construction sector, the construction industry is historically reported as the second lowest sector to have adopted information technology. This leads to a conundrum whether blockchain is a pure technological hype or whether there is a real potential application in construction. The paper is aimed at critically analysing the application potential of blockchains in construction through a use case analysis and comprehensive literature review to resolve whether it is pure hype or real. The exploration revealed that due to the exponential uses of blockchain, investments involved, and a number of start-up businesses contributing to Industry 4.0, blockchain indeed has a credible potential in the construction industry.