# A Blockchain-Based Auction Framework for Location-Aware Services
## 4 Discussion
### Auction Fraud and Blockchain  
Auction fraud is a challenging problem; hence, we discuss how the proposed system can address such a challenging task. [PERSON] et al. (2018) classified outline auction fraudulent activities into 10 types. Table 2 summarizes these types and maps them into the context of the proposed system in the paper. The proposed system uses a sealed bid reverse auction strategy. In the presented system, bidders are not aware of each other's bids, and each bidder can place a single bid. Accordingly, concerns regarding shilling and bid shielding fraudulent activities are eliminated, as is the possibility of manipulating the auction price. Additionally, any bid that exceeds the buyer-specified upper limit will be disregarded. The auctioned items in the proposed system are logistics services. Fraudulent activities such as misrepresenting the traded items or/and the possibility of trading stolen (or damaged) items are not applicable in our case. However, in the proposed system, the seller might violate the QoS constraints to gain financial benefits. In such cases, the violation dispute component works to penalize the violator. This also will be the outcome if the seller did not provide the service (failure to ship) or if the buyer (or the seller) submitted an untruthful violation claim (buy and switch). In addition, the use of the service index aims to reduce the probability of service violations by highlighting the historical QoS provided by the auction party. In the proposed system, the auction processes are enforced by using smart contracts. Such processes limit the impact of having participants with malicious behavior who try to act honestly to gain trust and increase their service index (shell auction). The violation dispute component depends on facts, and the service index for the sellers or the buyer has no impact on the outcome of this process. Once the auction is closed, the buyer may reject the winning offer. Furthermore, the buyer may attempt to avoid the payment (failure to pay) or even may attempt to avoid closing the auction. Rejecting the winning offer is acceptable since, in this case, the seller will receive the buyer's participating fee. Hence, the auction participation fee must be determined while considering the expected price for the service. Increasing the participating fee value may reduce the number of participating buyers and sellers, whereas reducing this fee may impact the quality of provided service and the behavior of the participants. In the experiments section, a sensitivity analysis is performed to highlight the factors that must be considered while specifying the participation fee amount. After the auction period, if the buyer does not close the auction, any participating seller might initiate the closing request. The reason behind adopting such a strategy is to support the decentralization of the proposed system. Transactions are time stamped and once the pre-specified auction time is over, any participant has the right to close the auction. At any stage, if the violation dispute functionality is called, the agreement number, along with the claim details, will be passed to the witness group members. Accordingly, once the members of this group cast their votes, the violators will be penalized as described in Section 3.3.4. The process of distributing the rewards among the participants is designed to ensure that sellers do not join the auction just for the sake of the reward. To ensure winning the reward, the seller has to know the winning offer and statistical information about the entire list of submitted offers. The inherited characteristics of the sealed bid reverse auction model help to avoid such a situation, since bidders are not aware of each other bids. In addition, if multiple bidders collude to increase the chances of a specific bidder winning the reward, the set of colluding bidders will lose a proportion of their rewards. Thus, sharing bidding information between sellers to manipulate the rewarding mechanism is not expected to occur.