# A Blockchain-Based Auction Framework for Location-Aware Services
###### Abstract  
As a critical factor in ensuring the growth of the electronic auction (e-auction) domain, the privacy and security of the participants (sellers and buyers) must always be guaranteed. Traditionally, auction data, including participant details, are stored in a third party (auctioneer) database. This leads to a high risk of a single point of failure in terms of privacy and security. Toward this end, blockchain technology has emerged as a promising decentralized communication paradigm to address such risks. This paper presents a blockchain-based auction framework as a decentralized e-auctioning framework for location-aware services. In particular, the framework consists of three components: pre-auctioning, main auctioning, and post-auctioning processes with four algorithms. Our primary focus is on location-aware services, such as storage space rental, apartment rental, transport hire, and parking space rental. The trading volumes are expected to be high; hence, simplifying the design is a crucial requirement. In addition to the benefits of eliminating the centralized entity (the auctioneer), fees are redistributed among participants as rewards. Further, we incorporate a service quality monitoring method that ranks the services provided by participants. This ranking allows participants to determine the rank of other participants with whom they wish to trade. We have conducted several experiments to evaluate the proposed framework's cost feasibility and to ensure the ease of the business flow. Ethereum; e-auctions; blockchain; decentralized applications; blockchain oracle problem +
Footnote †: journal:  
0000-0001-5000-0000-0000-0000-0000-0000-0000-0000-0000-00000-00000-00000-00000-00000-00000-00000-00000-000000-000000-000000-00000-000000-000000-000000-0000  
administrative fees to perform the auction and play a crucial role in this business; however, they increase the risk of privacy concerns [4]. This is rooted in the need for storing business information in a centralized fashion and on several databases that belong to these agencies. Hence, this information sharing mechanism increases the vulnerability of the stored data in terms of manipulation, damage, and loss. In this direction, blockchain technology can address e-auction privacy concerns and improve the e-auction trading experience. This is due to the existence of blockchain-based auction systems employed to facilitate auctioning items that cost millions of dollars [5]. Thus, such reliance on the blockchain has eliminated the need for a central authority, ensuring the integrity of the e-auction business process. In addition, blockchain transparency and its promising decentralized features incentivize government entities to be involved as trading parties (sellers or buyers), since no single entity controls the entire auction process, improving the trading experience. Two bidding strategies in e-auctions are open bid and sealed bid auctions [6]. In the former, when a bidder places a bid, the other bidders are notified about the new bid price, and bidders can typically bid several times when the auction is in progress. In the latter, a bidder is unaware of the price submitted by other bidders, each bidder can place only one bid, and the auctioneer announces the winning bid at the end. Compared to open bid auctions, the sealed bid strategy further supports the bidders' anonymity since any bid information is not accessible to the bidders. Additionally, the sealed bid auction structure motivates the bidders to submit the best price they can offer since each bidder can submit just one bid price. These characteristics emphasize the benefits of employing a sealed bid auction strategy due to supporting the bidder's privacy further and reducing the number of bidding-related transactions. The roles of participants in e-auctions can be classified into forward and reverse auctions [6]. In forward auctions, sellers offer goods for sale, and buyers compete by outbidding each other, aiming to find the highest possible price.