Barriers for Blockchain as an Enabler

In this subsection we will discuss the inherent challenges BCT faces for becoming an enabler for circular practices and what barriers that might lie ahead. In this section we have focused on the barriers and challenges that were found in previous literature and from our findings. Both research and findings were quite clear on the subject, and it was therefore possible to find clear arguments regarding the subject.

We will therefore discuss the different aspects of BCT maturity, ownership of data and lastly, the technology's energy requirements based on our findings and previous literature.

As of today, BCT's greatest challenge derives from its level of maturity. As mentioned above, it has only been 13 years since BCT was launched by Nakamoto in 2008, and therefore the knowledge with regards to this technology is still relatively limited compared to widely used BIM systems, which were introduced approximately 30 years ago. Further, as mentioned above, BCT is mostly used in cryptocurrencies today. As earlier research provides insight towards cryptocurrencies, insight into how the technology could be utilized in the construction industry has just recently gained traction. However, as it has not been a priority, our findings show that even for BCT experts, it can take years to fully comprehend the potential of a decentralized structure in the industry. Further, as the technology is rather new, there is, as mentioned, a lack of use-cases as most research provides theoretical assumptions for the technology. However, Mastos et al. (2019) recognized that there is a limited connection between theory and practical solutions.

This lack of transferability could reduce acceptance for testing for companies.

Looking at the practical implementations of the technology today, Kouhizadeh et al. (2019) also found that the technology currently suffers from its infrastructure whereas the system still might experience failure with interoperability, technological security and stability. Additionally, Behnke & Janssen (2020) found that BCT requires an architecture that is suitable across multiple practices. Further,

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Kouhizadeh et al. (2019) argues that companies in the construction industry are slow to adapt to new technologies as they rather utilize those who are tested and proved to be economical, rather than untested technologies that might be expensive and risky. As the technology is relatively new, it lacks tangible results proven by use-cases. Due to this it is likely that neither industry nor the technology itself is ready for widespread implementation of BCT. Further, it is reasonable to assume that industry actors are averse towards the technology as it is not yet fully understood. As we set out to explore how BCT and increased supply chain visibility could enable CCSC, our findings actually shows that it could slow down the progress towards CE in the industry because the technology could be intimidating for industry actors with limited knowledge, time and resources.

Another factor which we would argue that could be a difficult barrier for the technology is connected to the ownership of data. As our findings suggest, there is a scepticism towards the technology as there are currently no regulations regarding ownership of data which is decentralized. In line with our research findings, we would argue that it is difficult to decide who should own decentralized data. This could become especially difficult when looking at BCT as an enabler for circular practices, as the retrieved data could then prove to be important and a source of income. Moreover, Tezel et al. (2020) described companies as risk averse regarding property rights and privacy, which makes it reasonable to assume that regulations must be set in place before the technology can be implemented. Further, our research illustrates that one of the basic prerequisites for blockchain is that supply chain entities share information with each other. However, companies are averse to sharing information as open data could result in revealing of trade secrets and competitive advantages. Presumably, companies are reluctant to provide competitors with too much information as it could hurt business in the long run.

This way, we would argue that the question regarding the ownership of data becomes even more important, because the company which owns the data could potentially gain both competitive advantages and increased income, and therefore deciding who should possess this data becomes more difficult.

The final barrier we will discuss in this section is how blockchains would fit in a CCSC. Niranjanamurthy et. al. (2018) argued that the technology's main function is to process transactions. As found in our findings, constantly updating information

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is important in order for the information to be relevant. On the other hand, Niranjanamurthy et al. (2018) reports that the amount of transactions that are performed by a blockchain system far outnumber the transactions that are needed in a traditional centralized database. This is due to consensus algorithms where all nodes in the network are to process and approve the transaction. In turn, it is possible to argue that this could lead to high levels of energy consumption.

Additionally, in our research, it was found that several industry actors did not support a technology that provides a higher carbon footprint than other currently utilized technologies. Argued by Kouhizadeh et al. (2019), it is contradicting that a technology that leverages CE-practices in itself is less energy efficient than current technologies. This can in turn cause problems for environmental practices, and our findings shows that it raises questions about how capable BCT is to enable CSC.

However, through our research, it was discussed that some solutions have already surfaced, such as the consensus method of “Proof-of-stake”, created by King &

Nadal (2012). Further, in our findings it was also argued by BCT experts that all problems related to energy consumption can, and will, be solved. However, this could also be an indication that the technology is not yet ready for practical implementation in the industry.

In summary, for BCT to be utilized as an enabler for CCSC, there are several barriers the technology must overcome. Through our research and findings, we have shown which barriers are believed to be most important to address, and how they affect the construction supply chain. In this chapter we have discussed BCT maturity as the technology is arguably not ready for implementation in the construction supply chain today. Further, the technology has a barrier regarding regulatory actions as there are no set or rules regarding ownership of decentralized data. This means that companies could be reluctant to share information as property rights and privacy cannot be guaranteed. The final barrier discussed above explores the contradictory state of BCT as an enabler of circular practices, when the technology itself is resource inefficient. Even though researchers explore options for energy reduction, the technology is currently utilizing more than traditional databases. In short, the recurring factor in all of these points is that neither the current state of BCT, nor the construction industry is mature enough for widespread implementation of BCT.

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