The Potential of Blockchain in Building Construction

Construction customers want more complex facilities delivered faster and at a lower cost. Transaction costs account for a significant proportion of each new or refurbished facility (a 2017 report from the Infrastructure Client Group in the UK suggests as high as 50%), yet they contribute no value to...

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Bibliographic Details
Published in:Buildings (Basel) 2019-04, Vol.9 (4), p.77
Main Authors: Dakhli, Zakaria, Lafhaj, Zoubeir, Mossman, Alan
Format: Article
Language:English
Subjects:
BIM
Blockchain
Case studies
Collaboration
Construction
Construction contracts
Construction industry
Cost reduction
Cryptography
Customers
Developers
Digital currencies
Engineering Sciences
lean construction
Mechanics
Privacy
Public Key Infrastructure
Real estate
Residential areas
transactional costs
Trust
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Summary:Construction customers want more complex facilities delivered faster and at a lower cost. Transaction costs account for a significant proportion of each new or refurbished facility (a 2017 report from the Infrastructure Client Group in the UK suggests as high as 50%), yet they contribute no value to the customer. Blockchain is being suggested as a way to reduce transaction costs by eliminating the need for intermediaries to build trust as a prerequisite for successfully executed agreements. This study first describes the thinking that underpins blockchain technology, outlining how it works, and the potential limitations of the technology. Second, using a case study, reviews the potential cost savings from the use of blockchain for a real estate company. The results reveal a potential cost savings from blockchain deployment at 8.3% of the total cost of residential construction, with a standard deviation of 1.26%. Third, we explore the implications, risks and applications of blockchain technology for improving flow in the end-to-end design and construction process and we identify opportunities for future research on blockchain applications in construction.
ISSN:2075-5309
2075-5309
DOI:10.3390/buildings9040077