Construction Inspection Information Management with Consortium Blockchain Liupengfei Wu 1*, Weisheng Lu 2, Fan Xue 3 This is the authors’ pre-print version (before peer review) of the paper: Wu, L., Lu, W., & Xue, F. (2020). Construction inspection information management with consortium blockchain. Proceedings of the 25th International Symposium on Advancement of Construction Management and Real Estate (CRIOCM2020), Springer, in press. Merit Paper Award. This file is shared for personal and academic use only, under the license CC BY-NC-ND 4.0 (Non-Commercial, No Derivatives, and with an Attributed citation when you use). The final published version of this paper can be found at: [LINK_TO_SPRINGERLINK]. Any uses other than personal and academic purposes must obtain appropriate permissions from Springer first. Abstract: Blockchain can be regarded as a distributed database that records transaction data in a shared manner. This new technology is considered destructive and can transfer many data-driven industries, including construction. On the other hand, as one of the necessary measures to ensure quality, progress, and safety, construction inspection records still rely on paper. This leads to many problems, such as time-consuming, input errors, file loss, and even data manipulation. This research aims to develop a blockchain-based construction information management platform to expand blockchain applications in construction inspection management. First, conduct a literature review to explore blockchain technologies, types of blockchains, blockchain platforms, and existing construction inspection processes and issues. Based on the review, a method called design thinking is used to develop a blockchain prototype. As a result, a consortium blockchain prototype is developed to help inspection information management. The proposed solution can be tested and fine-tuned in future research. The study also discusses issues related to the current blockchain implementation, which provides numerous opportunities for further investigation. Not only limited to general discussions, one contribution of this research is the development of a configurable prototype so that construction stakeholders can follow and develop their blockchain-based solutions. Keywords: Blockchain; Construction industry; Information management; Inspection; Smart contract. 1* Liupengfei Wu Corresponding author, Department of Real Estate and Construction, University of Hong Kong, Hong Kong, China E-mail: u3545425@connect.hku.hk Weisheng Lu Department of Real Estate and Construction, University of Hong Kong, Hong Kong, China 2 3 Fan Xue Department of Real Estate and Construction, University of Hong Kong, Hong Kong, China 1 1 Introduction 2 Blockchain was first known as the basic technology of cryptocurrency in 2008[1]. Subsequently, blockchain was 3 introduced for applications beyond cryptocurrency. Perera et al. (2020) pointed out that blockchain is considered 4 to have disruptive capabilities and can change many global industries, including the construction industry[2]. 5 Blockchain can be seen as an immutable ledger, recording information in a decentralized manner. It combines 6 three key underlying technologies: distributed database, cryptography, and consensus protocols[1]. Together, 7 these underlying technologies enable information to be submitted, endorsed, and shared with a high degree of 8 security. Blockchain can be divided into three types, namely public, private, and consortium. They are 9 categorized by the right to access ledger on the blockchain[2]. Many existing blockchain platforms, such as R3 10 Corda and Hyperledger Fabric, can develop decentralized applications. If the existing platform does not meet 11 user requirements, one can also develop a self-built platform. 12 Construction inspection plays a vital role in every phase of projects. In general, construction inspections are 13 usually carried out as a contractual responsibility performed by the consultants to offer the client an independent 14 view of construction quality, work progress, and site safety. Most of the existing inspection information is 15 recorded on paper[3]. Issues such as incorrect placement of steel bars, schedule delays, and unsafe operation 16 behaviors are identified and integrated through manual processes; therefore, the process is expensive, inefficient, 17 and error-prone. Also, the construction stakeholders are known for their lack of mutual trust. The development 18 of mutual trust between stakeholders (e.g., clients, main contractors, consultants, and subcontractors) in 19 construction depends on tamper-proof construction inspection records[4]. Nevertheless, existing information 20 management technologies cannot meet the stakeholders’ requirements. 21 The aim of this paper is threefold: (a) to explain blockchain technology so that stakeholders in the 22 construction industry understand its potential; (b) to develop a consortium blockchain prototype (Hyperledger 23 Fabric-based) by following which stakeholders in construction can develop their case-specific blockchain 24 solutions for managing construction inspection information; (c) To discuss issues related to the current 25 blockchain implementation so that future research can provide potential solutions. The rest of the paper is 26 structured into five sections. In the second section, we briefly introduce blockchain and describe inspection 27 works in the construction industry. In the third section, we provide the methodology. In the fourth section, we 28 propose our blockchain prototype. Discussions are conducted to deepen the understanding of blockchain 29 technology in the fifth section, and conclusions are given at last. 30 2 Literature Review 31 2.1 Blockchain Technology 32 Cryptography, distributed databases, and consensus mechanism are the three basic technologies of blockchain[2]. 33 Blockchain protects transaction data and interactions on the chain through a hash algorithm and public key 34 infrastructure (PKI). PKI guarantees that the transaction data is encrypted and decrypted through the 35 unique relationship between the public key and the corresponding private key, while the hash algorithm 36 ensures that the transaction data is tamper-proof[2]. The blockchain retains a growing set of transaction data, 37 bundled together into blocks of data (Figure 1). Each block includes the block number, the previous block’s 38 hash, the current block’s hash, the timestamp, the target difficulty, and the nonce[5]. A nonce is a random 39 number that considers the network rules to identify the hash. The hash value is unique for each block, so if 40 people intentionally or unintentionally alter the block’s transaction data, the corresponding hash value will be 41 changed instantly. Each block retains the previous block’s hash value to ensure that the current block cannot be 42 changed without changing the previous block. 43 44 Figure 1. Blockchain structure 45 A blockchain database is not a single information storage source but is composed of ledgers scattered in 46 many locations in a shared manner[2]. A distributed database is also a network where participants (also called 47 peer nodes) can have transactions without intermediaries. The blockchain consensus mechanism makes direct 48 transactions between interacting parties possible. The blockchain’s consensus mechanism is to accept the 49 transaction data into the distributed ledger by verifying the transaction data’s order and correctness[5]. There are 50 many consensus algorithms to choose from, such as Proof of Work (PoW), Proof of Stake (PoS), and Practical 51 Byzantine Fault Tolerance (PBFT), and each consensus has its own advantages and disadvantages. 52 2.2 Blockchain Options 53 Blockchain can be categorized as public, consortium, and private[2]. The public blockchain allows anyone 54 interested to join, and everyone can read the data on the public blockchain[1]. Public blockchains are commonly 55 used for cryptocurrencies such as Bitcoin. The consortium blockchain only allows a limited number of 56 pre-authorized groups/organizations to read data and submit transactions[1]. The private blockchain is only open 57 to one organization, so the network is centralized[1]. Many existing blockchain frameworks and platforms can be 58 used to implement public, private and consortium blockchains. Table 1 gives an overview of three popular 59 blockchain platforms. People can also develop customized platforms, but it may be challenging to ensure their 60 code security. 61 Table 1. Popular blockchain platforms overview Features Ethereum[2] Hyperledger Fabric[2] Ripple[6] Industry usage Cross-industry Cross-industry Financial Services Blockchain type Public Consortium Private Consensus Proof of Work/ Proof of Stake Pluggable consensus Ripple consensus Mining rewards No Yes No protocol 62 2.3 Construction Inspection 63 In construction projects, the client entrusts inspectors to manage the project quality, schedule, safety, contract, 64 and other aspects of a business. The inspector is an impartial third party between the client and the contractor 65 who can correctly handle disputes. Besides, inspectors are required to understand engineering and technical 66 knowledge, accounting, and construction regulations. Quality control inspections usually include on-site 67 inspections of materials and construction processes[7]. The purpose of quality control inspections is to ensure 68 high-end quality at delivery. Inspectors can also check quality-related documents, work instructions, and action 69 plans to control the construction process better and prevent opportunism. Besides, regular progress inspections 70 are conducted on construction sites to ensure that the project can be completed within the agreed contract time[8]. 71 Construction inspections are also important to ensure that relevant people work in a safe environment[9]. For 72 example, check whether there are fences to prevent people from falling from heights, ensure that employees 73 wear personal protective equipment, and check whether equipment and work platforms are maintained. On-site 74 inspectors usually keep daily construction logs or on-site diaries, photos, and construction progress meeting 75 minutes, and then submit reports regularly. 76 There are many problems with construction inspection information management. At present, a large 77 number of inspection works are paper-based[10]; construction inspection records can be tampered or altered 78 without being found[11]. Also, there may be information gaps between participants because many inspection 79 forms are filled out and sent manually, which leads to informal filling, incomplete attachments, poor real-time 80 sharing, and low efficiency[11]. Moreover, compared with other engineering industries, construction projects are 81 temporary and one-off. Therefore, organizations involved in construction projects find it difficult to maintain 82 long-term partnerships. The development of mutual trust between organizations with different interests is 83 challenging. Without trust, many organizations are reluctant to share detailed inspection information[11]. 84 Participants can cut corners and blame others in collaboration because the existing information management 85 system has very low traceability[11]. Participants may also be dishonest and violate the contract to pursue private 86 interests[11]. 87 Blockchain, with its salient features, has the potential to solve the above-mentioned inspection information 88 management issues. Blockchain can introduce reliability and immutability. Based on the hash algorithm, no one 89 can modify or tamper with approved records[2]. The agreed inspection information is stored in distributed 90 ledgers, and all participants have the same ledger that updates simultaneously. This can enhance information 91 transparency and sharing[2]. In addition, all participants have encrypted signatures based on PKI. Combining the 92 signature with timestamps, the blockchain can ensure the traceability of inspection information[11]. Each 93 inspection document needs to be endorsed by relevant stakeholders based on a consensus mechanism. Therefore, 94 blockchain can establish mutual trust between stakeholders and prevent later disputes[11]. By combining 95 blockchain and smart contracts, inspection information can be automatically checked according to contracts, 96 regulations, and standards to ensure construction quality, progress, and safety. Smart contracts are digital 97 contracts that can perform operations when predetermined conditions are met[1]. 98 3 Methodology 99 This research used a hybrid approach, which includes literature reviews and design thinking (Figure 2). 100 Generally speaking, a literature review is a systematic method of collecting and integrating previous research 101 results[12]. As a research method, an organized literature review lays a concrete footing for advancing the 102 existing knowledge system and promoting theory development[13]. Through comprehensive findings, a literature 103 review can solve research problems with capabilities that no single study has. In view of the difficulty of 104 exhausting all related research work, it is usually necessary to delimit the research scope. Keywords used to 105 search for related papers in this study include “Construction Inspection”, “Block chain”, “Blockchain”, 106 “Consortium Blockchain”, and “Hyperledger Fabric”. A preliminary analysis was conducted to determine each 107 paper’s basic information; that is, the research objectives include blockchain applications and technologies, 108 construction inspection process, information management, and information management systems. 109 110 Figure 2. Proposed Hyperledger Fabric-based solution 111 112 Next, this research adopted design thinking to learn from existing practices and design a prototype suitable 113 for construction inspection information management. It emphasizes “thinking like a designer”, who usually 114 focuses on improving a product’s functionality according to customer needs[14]. The design thinking process 115 includes five stages, namely, empathize, define, ideate, prototype, and test. In this research, empathy was about 116 understanding the interrelationships among construction stakeholders (e.g., customers, contractors, and 117 consultants). In the next step, we defined the key issue. The issue here was to propose a Hyperledger-fabric 118 prototype so that a consortium blockchain-based system can manage construction inspection information. Then, 119 we carried out several group meetings to discuss and propose various design options. Finally, a designed 120 prototype was proposed. The testing stage was not covered in this study. In future research, this stage will aim to 121 interact with users to fine-tune the proposed solutions. 122 4 Proposed Solution 123 The upper part of Figure 3 shows a typical quality, progress, and safety inspection process. The 124 contractor’s engineer can submit an inspection request from the construction site. Usually, a client entrusts 125 consultants (e.g., inspectors) to conduct inspections on construction sites. The client’s project manager will 126 supervise the entire inspection process in the project-based organization, endorse the consultant’s 127 inspection reports, and issue payment instructions if all content meets the contracts and requirements. 128 To achieve reliability, immutability, information sharing, traceability, and self-execution in business 129 transactions, organizations participating in inspection must have identical and immutable inspection 130 records as the foundation for building trust. Based on the review in Section 2.2, we chose the consortium 131 blockchain because it allows multiple authorized parties to join the blockchain network and ensures 132 privacy. Besides, consortium blockchain can provide membership services (e.g., identity authorization and 133 verification) for multiple parties. In the process of cooperation, different information may have different degrees 134 of confidentiality. The ideal platform should provide isolated communication channels to protect privacy. For 135 example, the client can establish an isolated communication channel with the inspector without the contractor’s 136 involvement. As a result, the Hyperledger Fabric platform is selected for construction inspection information 137 management. 138 139 Figure 3. Proposed Hyperledger Fabric-based solution 140 141 The designed blockchain system based on Hyperledger Fabric in the lower part of Figure 2 can 142 enhance inspection information management. This digital inspection platform can benefit all construction 143 stakeholders. The submission of inspection requests can be digitalized and sent to inspectors to perform 144 inspections effectively. Inspectors use their smart devices (e.g., smartphones, iPads) to complete 145 assignments, conduct inspections, approve inspection forms or record any unqualified events, and report to 146 the client’s project manager through the platform. Photos and conversation records can also prove the 147 inspection process. The advantages of this platform include quickness, digitization, and transparency. 148 Another advantage is that all submitted documents should reach a consensus in the blockchain to prevent 149 future disputes. Most importantly, there is a timestamp on each inspection-related document submitted to 150 the platform. The platform can also enhance trust because the blockchain structure provides security, 151 auditability, and the submitted documents are immutable. 152 In the designed Hyperledger Fabric blockchain network, the Client, Consultant, and Contractor plan 153 to use this platform to manage inspection information. The Client is the initiator of the network. Client, 154 Consultant, and Contractor can have applications that perform inspection information in two channels. 155 Client and Consultant can privately exchange information about inspections in channel 1, while Client, 156 Consultant, and Contractor can also communicate in channel 2 together. The peer nodes Project manager 157 and Inspector have two ledgers, which record inspection information related to Channel 1 and 2. They also 158 have two smart contracts associated with channels 1 and 2, respectively. In contrast, the contractor’s peer 159 node Engineer has only one ledger and one smart contract associated with channel 2. CC1 and CC2 are 160 “Endorsement Policies”, so relevant parties can manage their channel access rights through them. Similarly, 161 NC4 allows the Client and Contractor to manage the entire blockchain network. O1 and O2 are two 162 ordering nodes used to manage the channel (e.g., packing inspection documents into blocks). Each 163 organization also has a certification authority that can issue digital identities to their peers. 164 5 Discussion 165 There are many existing problems in real life related to blockchain implementation. Security is one of the 166 biggest issues related to blockchain. In the construction industry, practitioners mistakenly believe that 167 blockchain can be a panacea to ensure the information's authenticity. However, there is an off-chain issue 168 that needs to be resolved in the future. For example, there is no 100% secure solution to ensure that 169 information is not tampered with before being submitted to the blockchain. Therefore, it is necessary to 170 convene engineers, blockchain developers, and even lawyers to sit down and discuss the security 171 framework for off-chain issues. Also, because the number of participants in a construction project is 172 limited and clients have strong decision-making power, determining the number of peer nodes in a 173 construction project to reduce the risk of 50% attacks will become a big challenge. A 50% attack means 174 that once someone has 50% of the blockchain network's computing power, they have the opportunity to 175 tamper with the information on the blockchain[2]. 176 Secondly, how to choose a blockchain is also a problem. Although some studies have provided some 177 guidelines for construction practitioners to decide whether they need to use the blockchain, to the best of 178 our knowledge, no studies have proposed a systematic method to guide users to choose blockchain types 179 and platforms. Simultaneously, there is also a lack of relevant literature and industry guidance to help 180 people design a blockchain system that meets their needs. The lack of guidelines for choosing blockchain 181 options greatly limits the implementation of blockchains in real life. 182 Finally, one of the most issues concerned by the construction industry- the economic cost of using 183 blockchain-based systems has not received much attention. Only a small amount of literature calculates the 184 cost of blockchain transactions. However, there is no detailed explanation and case to prove the overall 185 cost of blockchain use. The blockchain cost may include initial platform setup, deployment, cloud storage, 186 ongoing maintenance, and monitoring. Thus, when better empirical data is available, a detailed cost-benefit 187 analysis is required. 188 6 Conclusions 189 The purpose of construction inspections is to ensure construction projects’ quality, progress, and safety. 190 However, there are many problems with current construction inspection information management. For 191 example, inspection information is easily tampered with and cannot be shared in real-time. The inspection 192 information received by clients is not reliable, and the traceability is low. Besides, it is not possible to 193 automatically check whether the information meets the requirements. In terms of inspection information 194 management, blockchain allows various construction stakeholders to realize immutable, transparent, 195 shared, traceable, and automatic construction inspection information management and this is the footing 196 for mutual trust. 197 This paper proposed a blockchain-based prototype for managing construction inspection information 198 in a decentralized manner. The Hyperledger Fabric platform under the consortium blockchain can collect, 199 encrypt, share, and record construction inspection information. Also, with the support of smart contracts, 200 an automated compliance check process can be realized. 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