Automation in Construction 140 (2022) 104379

Contents lists available at ScienceDirect

Automation in Construction
journal homepage: www.elsevier.com/locate/autcon

Review

Blockchain in construction management: Applications, advantages

and limitations
Dena Mahmudnia a, Mehrdad Arashpour b, *, Rebecca Yang c
a
Civil Engineering Department, Sadjad University of Technology, Mashhad, Iran
b
Department of Civil Engineering, Monash University, Melbourne, Australia
c
School of Property, Construction and Project Management, RMIT University, Melbourne, Australia

A R T I C L E I N F O A B S T R A C T

Keywords: Blockchain technology (BCT) has been implemented in different industries, including healthcare, manufacturing
Artificial intelligence (AI) and construction. Integrating recent technologies such as the internet of things (IoT), building information
Blockchain technologies modeling (BIM), and artificial intelligence with BCT creates the potential for overcoming many limitations
Building information modeling
within the construction industry. Blockchain smart contracts, for example, can solve problems related to tradi­
Construction and infrastructure
tional contract forms. In construction projects, smart contracts based on BCT can enhance payment transparency,
Contractual disputes
Project stakeholders protect transaction histories, and provide secure access to information. Since BCT platforms are decentralized,
Review article reducing unnecessary bureaucracy will improve open communications, and BCT application can prevent disputes
Smart contracts rooted in communication issues, inaccurate documentation, and payment problems. This study focuses on
reviewing BCT characteristics to evaluate impacts on mitigating disputes. Based on a systematic review of the
publications, a comprehensive classification of blockchain-enabled applications in managing construction dis­
putes is presented. This review identifies gaps in research and opportunities for future studies in the construction
domain.

1. Introduction studies have reviewed the potential of “Blockchain” to mitigate disputes

Technological developments such as building information modeling
(BIM), cloud computing, and IoT have changed processes for storing,
exchanging, and analyzing data [1]. Such developments facilitate
structured, semi-structured, and unstructured data management in the
manufacturing, construction, and energy industries [2].
Project-based industries have adopted modern approaches to over­
come different planning and execution barriers. As an example, pro­
ductivity within the construction industry is adversely affected by
traditional contracting arrangements [3], with frequent suspicion and
mistrust among collaborative partners and stakeholders [4]. These
challenges faced by the construction industry lead to low productivity,
disputes, payments failure, and less information sharing. The novel
approach that promises to handle these issues is combining a blockchain
with other technologies to reduce project costs and time, strengthen
security and improve operational efficiency [5].
Researchers have extensively studied various aspects of the BCT
application [6]. Recent studies have indicated that BCT can address
hacking and cybersecurity risks in IoT systems and BIM [7]. Limited
in the construction industry. The current paper explores different
characteristics of BCT and the ability to solve the root causes of
contractual conflicts. In this study, an integrated review of “Blockchain”
and “dispute” concepts has been carried out to investigate the BCT’s
ability to resolute disputes.
Reviewed studies were explored to discover the status of research on
blockchain applications in problem-solving. This review suggests that
blockchain can solve the problems rooted in payment systems, collab­
oration, documents in the construction industry. Three scopes of
blockchain applications have been classified from the literature (Fig. 1).
The application of BCT in managing information represents a large part
of the three domains of applications, followed by payment and collab­
oration. Payment-oriented applications also get much attention from
scientific BCT studies.
Previous studies have not presented a systematic review of block­
chain applications to manage construction disputes, a gap that was the
main driver of conducting the current study. In particular, it is tried to
fill the gap by answering these questions: (i) What are the overall roots
of construction disputes? (ii) How can blockchain-based applications

* Corresponding author.
E-mail addresses: mehrdad.arashpour@monash.edu (M. Arashpour), rebecca.yang@rmit.edu.au (R. Yang).

https://doi.org/10.1016/j.autcon.2022.104379
Received 29 September 2021; Received in revised form 13 May 2022; Accepted 21 May 2022
Available online 27 May 2022
0926-5805/© 2022 Elsevier B.V. All rights reserved.
D. Mahmudnia et al.
address the issues of the construction industry? (iii) How do the block­
chain applications affect disputes management in construction projects?
The current systematic review study contributes towards a specific
understanding of BCT features that reduce claims. The approach of this
work is a content analysis; therefore, the growing interest from the
literature is highlighted, and key research streams are identified: (i) the
application of blockchain in data management (ii) the role of blockchain
in payment management,(iii) the impact of applying blockchain on the
interaction of participants, and (iiii) the current research gaps and op­
portunities for further studies.
The structure of this article is as follows. The BCT paradigm is dis­
cussed in Section 2. The method to perform a systematic literature re­
view is presented in Section 3, followed by a description of the
classification of the different dispute causes in Section 4. Section 5 re­
views characteristics of BCT identified by previous studies. Section 6
focuses on how BCT can address disputes, and Section 7 presents chal­
lenges. Finally, Section 8 draws conclusions and introduces opportu­
nities for future research.
2. Blockchain paradigm
BCT application has been extended since its first appearance in 2008
by Satoshi Nakamoto. There are numerous studies in the literature
exploring various BCT applications in industries, from financial services
to agricultural supply chains. For instance, researchers investigated
blockchain-achieved economic benefits and challenges [8]. Ref. [9]
explored BCT’s effectiveness to solve several concerns in agriculture as
well as its opportunities and challenges.
Since BCT was performed in the real world by presenting the digital
currency–Bitcoin, most scholars studied blockchain features or the role
in the finance service sector [13]. Blockchain is based on distributed
ledger technology (DLT) to record information of each transaction that
every network member has access to, but it can never be changed [10]. A
blockchain is a digital finance technology that creates opportunities for
crescive entrepreneurship [11] and develops social, environmental, and
economic welfare based on its impact on circular and modified linear
economy frameworks [12]. Since a blockchain can increase effectiveness
and credibility in the supply chain, the cost of processes decreases [13].
One of the most widely conducted studies of BCT is in agriculture,
half of which were performed by Asian researchers. Around 60% of all
the studies are based on the food supply chain, and the rest is related to
the combination of BCT and IoT [14]. Some problems of public service
platforms of agriculture, such as rent-seeking, can be solved by applying
BCT in the agricultural supply chain system because the technology is
based on a double chain structure that improves security and enterprise
Collaboraon
Payment
0 200 400 600
Fig. 1. Distribution of studies according to the subject areas identified.
Automation in Construction 140 (2022) 104379
information privacy [13]. Researchers designed a framework to track
agriculture products by applying the idea of a double-chain storage
structure [15].
Recently, different studies have investigated BCT to assess its po­
tential to create an efficient system in various industries. For instance, a
blockchain-based energy management system reduces daily operation
costs and peak load [16]. Furthermore, integrating blockchain and IoT
to implement an energy trading system protects users’ privacy [17] and
enhances fairness in the market [18]. Moreover, in terms of energy
management, BCT guarantees the secure implementation of Demand
Side Management (DSM), aligning supply and demand. Since the
financial operations of power distribution systems need to be optimized,
BCT plays an essential role in managing energy and financial flows in
energy transacting between microgrids and the local distribution grid
[19].
Another sector that BCT can improve is the healthcare. Growing data
size is one of the most severe challenges of healthcare data systems and
needs to be managed without disturbing personal privacy. Healthcare
organizations take blockchain-based solutions to organize patient in­
formation while maintaining security and privacy [20].
BCT can be combined with other technologies, such as IoT, to benefit
shared economy applications, laying a foundation for people to make
more money [21]. IoT may use machine learning algorithms, although it
is not viable since these cannot provide privacy regarding massive data
stored at central cloud centers. On the other hand, by adopting a
decentralized system, BCT enhances the confidentiality of data IoT
networks [22] and addresses the challenges in IoT based on its consensus
protocols and data structures [23].
Szabo presented the smart contracts concept in 1997 [24], although
it did not receive enough attention until the development of blockchain
and Ethereum. Ethereum is a cryptocurrency that is the most well-
known platform to execute a smart contract. Smart contracts relying
on blockchain run by all users in a network facilitate the exchange of
information [25]. Therefore, using BCT within Ethereum, smart con­
tracts, and IoT to facilitate data sharing allow users to automate data
workflow and record a distributed peer-to-peer network [26].
3. Research methodology
The approach adopted in this research is a “systematic review”
focusing on delivering a thorough summary of the body of knowledge
and answering a relevant research question. In a systematic review, the
first step is conducting a thorough search of all sources of information
for associated studies. After listing citation indexes searched in the
methodology section, the next step would be applying determined
Data management
800 1000 1200 1400 1600
2
D. Mahmudnia et al.
criteria to analyze the titles’ eligibility. In the last step, which may or
may not contain a meta-analysis, the collected data is synthesized [27].
The process suggested by Grant and Booth [28] has been adopted to
conduct this systematic review of blockchain applications in claim
management. The steps of the methodology include:
1. Specifying reasons for conducting the review, organize it, and
develop a protocol for the review.
2. Identifying and select the research studies, data extraction, and
synthesize them.
3. presenting the review outcomes.
3.1. Search criteria
The main question of this study is how a blockchain-based smart
contract can mitigate construction disputes. To answer the primary
research question, the authors have carried out a systematic search
strategy during August 2021 without considering time-frame re­
strictions, and in January 2022, the results were updated. Relevant ar­
ticles were identified through electronic investigations. Two primary
databases of Scopus and Web of Science were surveyed to source rele­
vant articles. The terms “blockchain” and “construction” were initially
explored in all research paper’s titles.
Moreover, the studies exploring BCT applications in the three do­
mains (data, collaboration, and payment management) in other in­
dustries were also considered. To be included, the referenced works had
to focus on BCT implemented for any objective related to data, payment,
and collaboration. Selected studies include peer-reviewed papers, dis­
sertations/theses, and conference proceedings. There was no restriction
to impose on the country or region of publication and the design of
studies. The eligibility criteria of this research are presented in Table 1.
3.2. Study selection and evaluation
The studies were identified based on their relevance to the primary
question. The review included only the articles that met all the criteria in
the study protocol. The process of filtering research papers adopted from
the database was made in three stages: (i) identification phase; where
search queries were performed, and duplicates were removed; (ii)
filtering phase, in which headlines and abstracts of irrelevant research
papers were excluded; (iii) eligibility phase, in which an assessment of
the relevancy of the articles to this study was carried out. Screening for
eligibility, the authors identified 425 studies (30 after removal of du­
plicates). Several papers were excluded since they did not cover block­
chain applications, leaving 395 potentially eligible full-text studies.
Around 340 articles were subsequently removed after screening their
abstracts since they did not satisfy inclusion criteria in Table 1, leaving
55 full-text studies for the final stage. Eventually, the systematic review
procedure resulted in 3 studies, as seen in Table A1. The used procedure
for the selection of studies is depicted in Fig. 2.
4. Disputes
In a competitive environment such as construction, there are
Table 1
Inclusion and exclusion criteria.
Criteria Specified criteria
Inclusion • Book chapters, theses, conference proceedings, and proposals
• No time-frame restrictions
• Studies that are software-oriented
Exclusion • Studies in a non-English language
• Studies merged with other technologies like IoT
Studies that have no role in managing disputes
•
3
Automation in Construction 140 (2022) 104379
potential conflicts between participants whose views and benefits are
different. Claims, which are inevitable in construction projects, turn into
disputes unless managed. Researchers have investigated and classified
the roots of such conflicts to manage them; thus, presented several
classifications of dispute causes [29,30]. However, in some cases,
studies offered irrelevant circumstances as the causes of conflicts that
never escalated into disputes [31]. Therefore, the current paper in­
vestigates conflicts that are rooted in only three fields (Fig. 3).
4.1. Payment failures
The employer makes a progress payment after completing the
amount of work during a period. A traditional payment system of con­
struction projects has a tree structure. After receiving the progress
payment, the main contractor pays it to the subcontractors, and so on
down the chain—the system’s traditional nature causes slow processing
in payments [32].
Despite the timeliness of payment that improves the cash flow in
construction projects, payment delays can slow down the execution of
construction projects and result in increased costs, reduced perfor­
mance, and escalated disputes [33]. There are a couple of reasons
behind a late payment: inefficient payment procedures because of a
heavy bureaucracy and the lack of trust among participants [34]. Since
presenting task reports by contractors and making payments by em­
ployers cannot be performed simultaneously, there is an inherent ten­
sion and a need for trust in construction projects—the contactor must
trust that the employer will pay, and the employer must trust that the
contractor accurately reports his performance [35]. In this regard,
project bank accounts (PBAs) are methods to increase transparency and
accelerate payments and have solved some poor payment practices.
However, PBAs cannot protect contractors against insolvency; setting
them up can be time-consuming lengthy, and cost money to run [32].
4.2. Documentation problems
Construction projects employ many full-time or casual staff with
different expertise. In addition, many activities have to be completed
during the project lifecycle with an abundance of data to be shared and
recorded. Some of these data are recorded on paper in traditional
archiving systems, and some are exchanged verbally, which increases
complexity [36]. Without an adequate data management system, tracing
information throughout the project lifecycle would be difficult, and cost
and energy would go to waste; time extension leads to additional pay­
ments and spawns the condition to begin conflicts [37]; therefore, the
project would not be completed on time [38]. Also, recording docu­
ments traditionally makes it challenging to explore data for managers
monitoring the project progress because they deal with the combination
of electronic and hard copies. If managers cannot identify discrepancies
between as-planned and as-built activities, they do not take action on
time. This condition causes to creates potentially rework situations [39].
Another problem with traditional data storage systems is recording the
“latest status” of tasks instead of the daily report of progress events. This
manner subjects the project to the loss of valuable information, which is
essential to find the reason for the delay or other failures [40].
High-quality documentation has a positive impact on the overall
efficiency of construction projects. Thus, returned payment fees will not
be maximized [41]. Ref. [42] claims that if the classification of disputes
is subjected to scrutiny, the cause of most claims is rooted in the category
of “the engineer’s instruction to change.” The change in orders leads to
changes in design, coordination, code, technique, and modifying
because of errors in design, mistakes in material selection, and lack of
coordination in the documentation. Another study points out that when
the scope of the contract is not drawn in detail, it is not known the
responsible for the substandard performance and should eliminate de­
fects [31]. Therefore, some disputes arise because of ambiguities in
contract documents, scattered information of site reports like an
D. Mahmudnia et al.
425 citations retrieved by inquiring
Ide ntification
databases
Scree ning
395 citations retrieved by inquiring
databases
Eligibility
55 full-text studies
Inc lusion
34 studies
Fig. 2. Flow diagram displaying the procedure of the literature search.
inaccurate bill of quantities, and poorly written contracts [43].
Moreover, unclear documentation can jeopardize any chance of
settling a dispute out of court because its outcome cannot be predicted
with certainty [44]. In an insecure centralized system, uncertainty re­
sults from a lack of awareness of project status and the actions of other
stakeholders. In an uncertain environment, opportunistic contractors
can take advantage to exonerate themselves due to centralized con­
trollers [45].
According to the study of Ali et al. (2020), poor record-keeping
practices, unacceptable paperwork by the contractor, and difficulty in
retrieving information result from traditional management systems. The
problematic issues pointed to the extension of time that is a source of
disputes. A BIM-based claims management system is presented in the
study to manage claims caused by the extension of time [46]. However,
using BIM to overcome the problems gives some obstacles, including (i)
a lack of transparency to determine the person who is responsible for
BIM, (ii) a lack of BIM data uniformity across design and engineering
groups and also contractor companies, and (iii) ineffective way to get
sustained information during the life cycle of a project [47]. Limited
transparency in identifying each stakeholder’s contributions and re­
sponsibilities and failing to find a way to avoid copyright infringement
in mega projects can generate serious disputes. Therefore, the prominent
weakness in a centralized system that needs to be overcome is a lack of
intellectual property protection for the construction designer of BIM
models [48].
4.3. Collaboration issues
Progress meetings of construction projects held regularly are essen­
tial mechanisms for exchanging data, discussing issues, and reaching
agreements on the most effective action. These face-to-face meetings are
a forum for all stockholders to become aware of the project status.
However, face-to-face interaction does not always lead to expected re­
sults. Despite the massive amount of time and energy consumed, the
4
Automation in Construction 140 (2022) 104379
30 duplicates removed
245 titles and abstracts
were ignored after
examining their
headlines and abstracts
21 articles ignored after
examining full texts
outcome is likely to be affected by positive and negative emotional
climate [31]. Some dominant people do not notice equal rights and
suppress the contribution of other participants. Therefore, some project
participants may never give their ideas [49].
A complex process such as a construction project relies on extensive
data exchange. In this level of complexity, information must be trans­
ferred on time and accurately among project participants to facilitate
collaboration among the participants. The construction industry needs
to have a system of information exchange without compromising the
quality of processes [50]. Mitkus and Mitkus [31] indicated that many
conflicts were derived from poor communication rather than delays in
performance. An effective collaboration needs trust; however, the cur­
rent systems to improve communication and store a record of trans­
actions suffer from a lack of trust because of non-transparent corporate
ownership that leads not to be deployed database for a large swath of
activity. Other problems in a traditional contract system rooted in un­
successful collaboration include slow down team workflow due to low
access to data, contract misinterpretation, late or incomplete informa­
tion received, slow client response to a decision, and misunderstandings
[51].
5. Blockchain characteristics
The advancement of technologies has laid a foundation to share in­
formation; however, these technological advancements face limits in
meeting their demands, including lack of security, openness, trust, and
accessibility, to name a few. A blockchain system has overcome these
challenges. For example, BCT protects data in IoT that is vulnerable to a
barrage of cyberattacks by storing it up permanently in blocks [52]. The
unique characteristics of BCT that have evolved businesses and their
systems are as follows:
D. Mahmudnia et al. Automation in Construction 140 (2022) 104379

This capability leads to accountability and transparency in a data ex­

change process [55]. Transparency leads to being aware of the ledger’s
Disputes status. Transparency provides awareness of the ledger’s situation. Be­
sides, members can trace data with verifiable timestamps because
various blockchain algorithms allow members to access records on a
database [56]. A centralized system cannot present a uniform, secure,
and transparent network to manage quality information [41].

6. The role of BCT characteristics in addressing construction

issues

As mentioned previously, disputes are rooted in three general fields:

payment, document, and collaboration. BCT can manage various sys­
Defective Weak
Poor Payment tems challenges by offering decentralization, security, and transparency.
Documentation Collaboration
Fig. 4 presents the connection of BCT features and related roles to
Results in Results in Results in payments, collaboration, and documentation problems.
Ethereum and smart contracts by running on a blockchain platform
ensure secure sharing of data and high-integrity storage information
Not disbursing the
[57]. The Ethereum platform16, one of the first blockchain-based ap­
Increasing Preventing parties
payments received ambiguity about from sharing their
to the parties activities opposite ideas plications, enabled computer codes to be executed on the blockchain. A
downstream smart contract can be considered a key invention revived by blockchain
Abusing of the technology [24]. The terms of a smart contract are written in a computer
Rising cash flow
system Increasing rework language that is also human-intelligible [58]. Once the predefined re­
problems because
quirements in a digital contract are met, the contract runs its terms
of late payments
automatically.
Wasting time and Misinterpreting
Increasing energy
6.1. Development of payment systems
data
insolvency risks

Lacking of Limiting Blockchain advancements have enlivened smart contracts and pay­
Damaging trust
transparency communication ment systems with the aim of improving cash flows. A blockchain-based
network can store every detailed transaction data on an encrypted single
digital gateway. Therefore, it provides users with a secure network and
Making hard trace
increases execution speed [59]; thus, the contractual conflicts and
transactions
payment issues can be overcome.

Fig. 3. Main dispute roots.

• Improving cash flow

5.1. Decentralization Considering a hypothetical example of a contract between an

A decentralized system is a network whose members can be
computing nodes, manufacturing machines, robots, or humans. Every
node is a part of the network that copies all blocks. The nodes verify data
security in a network whose members are identified by an address [51].
The system does not rely on a single entity to manage. A distributed
peer-to-peer network stores all transactions in the list of public blocks.
No one has complete control of the system, and each member has the
right to access the data; accessibility depends on access rights adopted in
the network [53]. The high level of accessibility creates a condition that
all participating nodes validate the documented data; thus, no one can
change a particular document to their benefit [24].
5.2. Security
The cryptographic protocol of BCT guarantees the authenticity of
data and participants by allowing only authorized participants to ex­
change information. In this regard, the protocol uses a “one-way” hash
function to convert an input with any length into an output with a fixed-
length named hash value. When a new transaction is conducted, cryp­
tography links it to previous ones; that is how blockchain networks are
provided with resilience and security. Since a cryptographic hash
function secures data, adversaries cannot predict initial data and,
consequently, cannot change or tamper information [54].
5.3. Transparency
A potential for blockchain is to provide an audit trail of transactions.
employer and a contractor, the execution of the contractual agreement
can be facilitated through a blockchain-based smart contract [60]. At the
start of the project, the employer needs to deposit a specific amount of
money to the network; then, the money is blocked until delivery time. By
finishing a task, the time is ripe for delivery, and associated data, such as
the time of the delivered task, is recorded on the blockchain. After
validating the quality of the delivered job, an automatic payment is
made. Relying on the self-executing codes, neither participant nor the
developer who has written the codes can manipulate the contract or
delay the payment [61].
In traditional auditing schemes, requirements such as paying in
advance can limit clients’ pay-as-you-go service. Therefore, researchers
designed a system in which a fair payment smart contract is run by a
cloud service provider (CSP) and data owners. CSP submits data
possession proof and receives no remuneration unless the verification is
passed [62]. One problem in traditional payment systems is the buyer’s
and seller’s lack of trust; a blockchain-based smart contract can solve the
problem. Asgaonkar and Krishnamachari (2019) removed the need for
trusted third parties while sending payments by presenting a double-
sided payment deposit protocol using BCT. They assumed that a digi­
tal product had a fixed price and was verifiable to both parties—the
protocol bases cheat-proof guarantees on a game-theoretic analysis of
interactions [63]. Also, Ahmadisheykhsarmast and Sonmez (2020)
presented an automated computerized protocol to ensure a timely,
transparent, and secure payment in construction projects [32].
Luo et al. in 2019 presented another methodology to solve payment
problems in construction projects based on a blockchain-based smart
contract. In this methodology, parties, their relationship, the sequence

5
D. Mahmudnia et al.
Payments
Giving equal right to share idea
Blockchain Collaboration
Documentatiom
Fig. 4. The connection between blockchain features and the reduction of disputes.
of transactions, and all construction contract clauses are formalized and
converted into a computer-executable code for a smart contract. Tasks
are automated for triggering interim payments after achieving
consensus. An authorized participant inputs a payment application, and
a consensus system checks the application to prove its validity. Then, the
application is stored in a blockchain ledger without alteration. If there is
an attempt to change the recorded information, a trail will be left in the
system. When stakeholders approve the validation of the transaction,
the endorsement is completed and sent to all of them. Therefore, system
security can be guaranteed without any need for a third party like bank
systems [65].
• Finding the responsible for a delay
Audit technologies can manage disputes since they help managers
detect claim fraud during the claim screening process [66]. Since a smart
contract provides a system that can track the progress status and manage
financial transactions, the responsible persons for any delay can be
defined. For example, in a cladding design process, a case study sug­
gested by Ref [67], after paying the advance payment to the vendor,
transporting the equipment to the predefined place is the vendor’s re­
sponsibility. Since the transaction fee paid by the vendor and the data of
equipment delivery are recorded to the blockchain, the reason for delays
in delivery or payment will be traced.
Another study uses a blockchain-based framework to overcome
financial issues, like willful non-payment and delays in payments, in a
centralized payment system, which is not cost-effective. Because of the
cryptographic protocol of blockchain via DLT, transactions are immu­
table, decentralized, and secured; therefore, parties do not need to trust
each other because a cryptographic strategy keeps data secure among
them. This paper deploys a decentralized data model with selective
transparency for interim payments. This data model shares payment-
related information differently based on the level of information sensi­
tivity. Sensitive information is shared privately, whereas non-sensitive
information is shared publicly [68]. In the history report of an immu­
table system, the participant responsible for late payment can be iden­
tified by audit trails [64]; The responsible party can be the client
delaying the payment approval (without acceptable reason), or the
contractor submiting progress invoices late. In this regard, a reliable
searchable encryption model by combining blockchain with searchable
symmetric encryption is required [69]. This fair scheme has two pur­
poses. First, it discovers the variability to detect false outcomes. Second,
the blockchain payment mechanism guarantees the interests of all users.
Automation in Construction 140 (2022) 104379
Improvement of cash flow
Identification of the Decentralization
responsible for delay in
payments
Security
Reduction of bureaucracy
Strengthening security
Transparency
Adding transparency
6.2. Progress in collaborations
Blockchain offers a way for users to securely collaborate, organize,
and transact [70]. One of its advantages is in healthcare by paving the
way for personal health data collection, communication, and collabo­
ration between participants and insurance companies [71]. Therefore,
BCT improves user collaboration by improving data sharing and
reducing hierarchy [72].
• Having equal right to share ideas
BCT creates cooperation culture in which responsibilities are clear,
and risks/rewards are shared among participants. BCT specifies work­
flow paths in any project, leading to trust and cooperation between
parties [73]. Since the environment of construction projects is compet­
itive, BCT eliminates unhealthy competition among participants by
giving equal rights to enter data and equal status in consensus decision
making [74]. Generally, a blockchain is used to remove the weak and
distrusting interaction in physical spaces, changing the interaction in
organizations [75].
• Reducing bureaucracy
Construction projects are collaborative processes that needs less
bureaucracy and more transparency. Accordingly, BCT provides project
stakeholders with a decentralized ledger and up-to-date information,
transforming a hierarchical organization into a collaborative network.
This network leads to a transparent relationship and awareness of the
site’s status. Clear communication is created for sub-contractors, main
contractors, inspectors, and other stakeholders; thus, individuals can
enter and access information in an organized manner [76]. This
distributed network is shared among all stakeholders and is not
controlled by one company or person [77].
6.3. Improvement in documentation
In an insecure centralized system, uncertainty results from a lack of
awareness of project status and the actions of other stakeholders, and
participants can take advantage to exonerate themselves [58–61]. An
opportunistic member can deliberately block other participants’ access
to the system during disputes. Moreover, unclear documentation can
jeopardize any chance of settling a dispute out of court because its
outcome cannot be predicted with certainty [57]. Blockchain can solve
these issues by enhancing the security and transparency of document
management systems can solve the issues.
6
D. Mahmudnia et al.
• Strengthening security
The main application of BCT is to manage organizations’ data in
which there are large amounts of record representations. In such sys­
tems, high data accessibility is significantly crucial, but at the same time,
information needs to be prevented from being tampered with [78]. To
this end, Sheng et al. (2020) presented a framework based on a block­
chain. They called it “the product organization process (POP)” that
improves information quality in construction projects. This framework
lays a foundation for contractors, employers, consultants, and sub­
contractors to collaborate online. They ally by signing a project contract
and participating in the POP quality Chain. The asset owner creates a
quality information document in the framework and the process is
commenced. The administration department and contractors ensure that
the framework is executed in all projects only after obtaining authori­
zation. The adopted protocol receives quality information management
by a consistent, secure, and decentralized framework. The framework
provides project participants with high data availability in a safe way.
Therefore, the challenge of scattered and vague documents leading to
disputes among participants is solved [45].
• Adding transparency
Transparency is essential in the dispute resolution process since it
brings confidence and mutual understanding [79]. A lack of trans­
parency in the centralized management of data creates a need for a
distributed system to share an immutable and transparent record of all
the transactions [80]. Previous research has indicated how lifecycle
transparency could be achieved by blockchain smart contracts [7]. A
contractor triggers the workflow by recording a request in the network,
including information such as the document number, document verifi­
cation, the next party, and the due date. The request is concerning a
defect in documents. The next actor (the architect) receives the request
and reviews documents to assess the claim and send an answer to the
contractor. Since all transactions are deployed on a blockchain, roles,
actions, and workflow steps are traceable. Therefore, the workflow is
transparent, and these records can be useful in case of future conflicts
[81].
7. Challenges and future perspectives
Several issues and limitations were identified despite the promising
results proved by the mentioned studies on a blockchain-based smart
contract for mitigating construction disputes. This section outlines the
determined challenges, categorized into three areas: training, regula­
tory, and trust (Table 2).
7.1. Lack of professional training
Like any novel technology, limitations and challenges emerge. Ar­
ranging a contract for multi-party interactions makes it complex [64].
Table 2
Arising challenges by applying blockchain smart contracts.
Challenges Description
Professional • Since it is a novel technology, there is a considerable lack of
training experts trained in BCT [82].
• Poorly coded contracts because of human error could result in
big problems [83].
Regulatory • A lack of regulations leads to problems in the construction
industry relying on legally binding contracts [84].
Trust • The adoption of BCT requires data exchange and
collaboration between all participants. However, one of the
industry’s problems is a lack of trust and collaboration [85].
• Users may not trust blockchain networks since data uploaded
to DLT is legitimate could lead to fraudulent activity within
the supply chain [86].
7
Automation in Construction 140 (2022) 104379
Therefore, one needs to clearly understand the conflicts provoked within
parties due to using a blockchain. As BCT is still an emerging technology,
there is a lack of blockchain awareness and understanding. One of the
most interesting unresolved issues is the inadequacy of stakeholder
experience and blockchain professional training [82]. This issue is
critical because after deploying a smart contract on a blockchain
network, making a change will be impossible; therefore, the smart
contract evaluation should be correctly performed, which is challenging
for the project’s development team.
Moreover, since executing the functions of a smart contract deployed
on a blockchain is computationally expensive, the codes need to be well
optimized; otherwise, the operation costs will increase [87]. The limited
knowledge is partially caused by the current shortage of relevant aca­
demic courses at undergraduate and postgraduate levels [88]. Future
research can address other compelling reasons behind a lack of experts
with adequate skills at BCT.
7.2. Lack of regulatory clarity
An important aspect of DLT is the ability to protect the user rights.
The system’s transparency will be reduced without an adequate regu­
latory model, and power users to delineate liability cannot be easily
identified. The current regulatory frameworks of DLT rely on traditional
centralized systems that lead to uncontrolled fragmentation in public
platforms; thus, some users gain benefits, and others are at a disad­
vantage. As a result, disputes are not effectively settled. Researchers
must understand BCT and its impact on the stakeholders to discover the
conflict potential while implementing the technology. However,
without blockchain implementations in a wide area, researchers cannot
find possible risks and conflicts resulting from using blockchain. One of
the challenges to large-scale adoption of the technology is regulatory
uncertainty. At the moment, smart contracts have no uniform approach
to determining an optimal structure in modern legal systems. Therefore,
it is necessary to demonstrate how existing legislation will apply to BCT
[88].
7.3. Lack of trust
BCT runs complex algorithms for each transaction, and it needs to
use various platforms to provide high privacy. Future research can
compare the functionalities of all leading blockchain platforms. The
business process of applying BCT needs to be clearly mapped out with all
alternatives. Managers are not confident of implementing blockchain
due to many variations and change orders in the construction industry
[67]. Besides, greater digitalization will be needed to adopt a blockchain
on a large scale since BCT cannot address all issues [89]. Other points to
address are problems with market integrity, and a lack of user protection
leads to leaders and people not using blockchain-based systems. In
addition to a lack of trust in the network, people are worried about the
future costs of potential government regulations [90]. Because of
mistrust and regulatory uncertainty, not only cannot a blockchain-based
contract mitigate disputes, but also it might create more challenges and
delays. The future development of DLT as a critical public platform re­
quires social trust with users assured about fair management of disputes
[88].
8. Conclusion
The current review focused on “blockchain technologies to mitigate
“disputes” in construction projects. Focusing on the analysis of old
document-based systems confirms that disputes in organizations with
multiple stakeholders are inevitable. A central entity with a heavy bu­
reaucracy creates conditions for opportunists to manipulate documents
in their self-interest, promotes power-seeking, and stops participants
from sharing their ideas. Construction projects with multi-stakeholder
interactions need decentralized management to reduce disputes. Since
D. Mahmudnia et al. Automation in Construction 140 (2022) 104379

conflicts are rooted in three primary contexts, this paper explores pay­
ment, documentation, and interaction issues in construction as the
sources of disputes. Evidence in the literature proves the influential role
of BCT in addressing these problems.
BCT facilitates egalitarian self-organization by presenting unique
features, like decentralization, confidentiality, and transparency. The
traceability option allows participants to track all immutable trans­
actions. Based on the consensus mechanism of BCT, all authenticated
participants have equal rights to give their opinion and access the in­
formation related to interactions and data reported from the project site.
Another advantage of BCT is that change in orders does not lead to
disputes because every change is considered a new transaction needed a
new consensus. Users can choose whether to be part of this new trans­
action. Thus, one of the leading causes to bring contractors into conflict
with employers would be lost.
As a result, to effectively apply a blockchain to reduce construction
disputes, several open issues must be addressed: a) developing a deep
knowledge of a blockchain so as not to face more significant risks and
disputes; b) managing any uncertainty to make BCT more powerful to
reduce construction disputes. Finally, regulating relevant laws on
blockchain to address any possible conflicts would result from the
widespread implementation of the technology.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Acknowledgments
This work was partly funded by the Monash Data Futures Institute
(MDFI) grant scheme on “AI and Data Science for Monash Global
Challenges”. Any opinions, findings, conclusions, and recommendations
expressed in this paper are those of the authors and do not necessarily
reflect the views of MDFI. The assistance of the ASCII Lab members at
Monash University is greatly appreciated.

Appendix A
Table A1
Categorical review of BCT applications.

Subject of paper Journal/Conference name Industry Area

A smart contract system for security of payment [32] Automation in Construction Construction Payments
A Blockchain-Based Privacy-Preserving Payment IEEE Network (2018) 32(6) 184–192 Energy Payments
Mechanism [59]
BCT for construction engineering management [65] Higher Education Press Construction Payments
Automating Construction Progress Payments [61] Journal of Legal Affairs and Dispute Resolution in Engineering and Construction Construction Payments
Blockchain-based fair payment [62] Information Sciences Computing Payments
A Dual-Deposit Escrow Smart Contract [63] 2019 IEEE International Conference on Blockchain and Cryptocurrency (ICBC) Digitalization Payments
Construction Payment Automation through Smart Proceedings of the 36th International Symposium on Automation and Robotics in Construction Payments
Contract [64] Construction (ISARC)
Public and private blockchain in construction [67] Automation in Construction Construction Payments
Securing interim payments in construction projects [68] Automation in Construction Construction Payments
Integrating blockchain for data sharing and collaboration 2017 IEEE 28th Annual International Symposium on Personal, Indoor, and Mobile Healthcare Collaboration
[71] Radio Communications (PIMRC)
BIM + Blockchain: A Solution to the Trust Problem in The Dublin School of Architecture Construction Collaboration
Collaboration [72]
Blockchain technology and BIM process [73] Journal of Information Technology in Construction (ITcon) Construction Collaboration
blockchain and interaction system of investment and IOP Conference Series Materials Science and Engineering Construction Collaboration
construction activity [74]
Digital twin and blockchain enhanced smart Journal of Manufacturing Systems Manufacturing Collaboration
manufacturing service collabo [75]
smart construction objects as blockchain oracles [76] Automation in Construction Construction Collaboration
BCT for Healthcare Data Management [77] Healthcare Informatics Research Healthcare Collaboration
Blockchain in Medical Informatics [78] Journal of Industrial Information Integration Healthcare Documentation
Transparency and Accountability in Blockchain [79] Proceedings of the 20th Annual International Conference on Digital Government Legal Documentation
Research
How Blockchain Could Empower eHealth [80] Data Management and Analytics for Medicine and Healthcare Healthcare Documentation
A blockchain-based integrated document management Automation in Construction Construction Documentation
[7]
Blockchain-aided information exchange records [81] Automation in Construction Construction Documentation

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