A study on blockchain-based circular economy credit rating system

Abstract

Circular economy is distinct from the linear economy model in the past. Circular economy emphasizes regeneration instead of possession of resource, and proposes using shared resources to create new supply chains and new economies. When practicing circular economy, prior to collaboration, each economic entity must learn of each other’s credit rating. This study applies the blockchain technology to establish each economic entity’s transaction details, and then employs confidence level algorithms to calculate each entity’s credit rating; the method utilizes the concept of decentralization to reduce third-party broker fees, which, aside from decreasing transaction costs, provides effective credit rating of public economic entities.