They also plan to develop more multipurpose smart contracts to cater to the broader needs and requirements of auctioneers and bidders. They now plan to develop decentralized applications to fully automate the auctioning process. However, their design allows the platform to be applied to other auctioning types simply by altering the structure of the smart contracts. The team’s solution was tested on one type of auction where the highest bid is known throughout the bidding process.
The actions enabled by smart contracts take the digital place of a third party and inherit the immutable and distributed properties from the blockchain tampering with them becomes almost impossible.Īdditionally, the blockchain-based solution would allow the seller to directly connect with many potential bidders without intermediaries, while the bidders would be able to monitor the auction process. The platform is decentralized, trusted, and secure, with tamper-proof records, logs and transactions. Each record created forms a block, and as each block is confirmed by the community, it is paired up with the previous entry in the chain, creating a chain of blocks. These “contracts” are actually simple programs that can be used to automatically exchange information under predetermined conditions.īlockchain technology offers an immutable and tamper-proof ledger of transactions as a shared database, validated by a wide community. Their solution uses programmable Ethereum smart contracts hosted on the blockchain. The research team realized that Blockchain-based auctions can effectively remove intermediaries, thereby reducing transaction costs and ensuring trust among stakeholders. Our proposed solution has broad applications in ecommerce and related service industries.” However, the existing auction process lacks trust and transparency with results that cannot be audited or verified In addition, the role of third-party intermediaries causes significant information delays and a results in a costly process. “Our work on blockchain-based auctions was inspired by a real industry problem from a UAE-based company offering a heavy equipment rental service through a competitive bidding process. “Our team is actively researching the most pressing challenges in supply chain and logistics,” said Dr. Mohammed Omar, Professor and Director of the KU Research Center for Digital Supply Chain and Operations Management (DSOM), published their research in Technological Forecasting and Social Change. Ilhaam Omar, Research Associate, Haya Hasan, Research Associate, Dr. To overcome this, a team of researchers from Khalifa University’s Industrial and Systems Engineering Department has investigated using blockchain technology-a distributed, immutable ledger of transactions organized as blocks and maintained by a community of users-to run online auctions. As a result, online platforms rely on human interactions for data integrity, security, transparency and traceability with potential bidders having to trust an auction organizer with ensuring that bids are legitimate and transactions properly settled.
However, these online auctions typically require a third-party to act as an intermediary between buyer and seller to facilitate and maintain the integrity of the transaction. Online auctions bring customers from around the world to a seller and mitigate geographical barriers that would previously have stood in the way of an enterprising salesman. Blockchain technology can offer significant opportunities to online auctions via enhanced transparency, data integrity and data traceability.
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