Blockchain in public supply chain management: advantages and risks

Abstract

This article identifies the main directions of modernization of the public supply chain management system in the aspect of digitalization of the economy. The need for the im-plementation of the blockchain is justified and the most appropriate type of this network is selected, taking into account the tasks that this technology should solve. The principle of operation of the distributed registry and its characteristics are considered. The levels of access to the blockchain network are determined depending on the roles of participants in the public procurement process. Special attention is paid to smart contracts, on the basis of which trust relations are formed between the parties to the transaction. The authors also used statistical data to assess the socio-economic benefits and identify the main ad-vantages and risks of implementing blockchain technology in the public procurement management system. Smart contracts based on blockchain can provide financial stability, reduce the cost of storing and transporting documents. Thanks to the blockchain, it will be possible to avoid corruption. The blockchain ensures the reliability of the conclusion of the contract and guarantees its execution on the basis of smart contracts. Implementation of blockchain within public procurement system will require investments not only into software development and digital infrastructure, but also into cybersecurity.