Applying Blockchain Technology in Smart Contracts for Construction Payment: A Proposed Solution

The construction industry has been facing the challenging problem of delayed payments and disputes over payment between owners and contractors. While multiple studies have been conducted to address this issue and reduce the delays caused by slow payments, the results have not been optimal. In this study, we propose a new process that leverages smart contract technology in Blockchain to solve the problem of slow payment in construction projects and post-contract disputes. This process aims to minimize the risks associated with project stoppage or prolonged duration, ensuring project continuity and safeguarding the rights of all parties involved. Specifically, we utilize smart contracts to facilitate automated payment transactions between owners and contractors. The smart contracts also act as a third-party monitor to ensure that both parties fulfill their obligations in the project. Furthermore, Blockchain technology is employed to record all project lifecycle transactions in a chronological order, enabling efficient management and retrieval of project-related data. Overall, our proposed approach offers a novel solution to the challenges posed by delayed payments and disputes in the construction industry, enhancing transparency, and promoting trust among project stakeholders.