Author: Dimitri Avakian, Associate
Building the case for blockchain.
Every year, Google publishes its ‘year in search’. It’s a list of the UK’s most searched-for topics, and offers a small glimpse into the public consciousness.
Surprisingly, last year “What is Bitcoin?” was searched more than questions about Brexit, GDPR, and the UEFA Nations league… cementing its position as the UK’s number-one topic of confusion. Is it any wonder we are confused? The last 12 months has seen the collapse of the crypto-bubble, ads for bitcoin at the Super Bowl, and rapper Akon releasing his own currency, the AKoin.
However, among all the madness, there are some real possibilities emerging for the construction industry…
This is because Bitcoin’s fundamental technology, blockchain (recognised by Gartner as one of the top strategic cross-industry technologies for 2019), unlocks promising potential approaches for tackling some of our industry’s most pressing issues.
4 steps to ‘get’ blockchain
The challenge with defining blockchain is that there are numerous ways to design a system, giving rise to different performance capabilities. This is the definition in relation to cryptocurrency.
- Blockchain is the digital equivalent of an accounting ledger; a file that records, tracks and verifies transactions.
- What makes most blockchain ledgers different from the one on your accountant’s desk is that they are usually decentralised. This means they aren’t controlled by one person or entity (e.g. accountant or bank) but by many individual nodes. These nodes are just individual parts of a larger data structure: the network.
- Each node holds a copy of the ledger, and each node must agree on the updates of that ledger. To randomise who gets to publish the update, each ‘block’ of transactions takes the form of an incentivised race to solve a cryptographic puzzle.
- Because each verified new block of transactions is cryptographically linked to all previous blocks, it is practically impossible to go back and change past transactions. This is what makes blockchain so secure and transactions fully auditable and (so far) immutable.
Blockchain and the built environment
Blockchain is likened to the internet of the 90s; the technology isn’t all that sexy and it largely operates in the background, but the potential capabilities it facilitates are truly exiting. For the built environment industry, imagine a future where questions like: “is this the latest version?” or “is this approved or compliant?” are a thing of the past.
Smart contracts (pre-defined transactional procedures programmed into code) could one day be used to automatically execute the multiple agreements encountered throughout a project’s lifecycle. The consequence would be the automated and traceable transfer of assets and payments during a project’s construction, automatic commissioning, and handover, as well as into operation and maintenance.
Sustainable supply chain.
The supply chain could soon develop smart contracts that are used to automatically transfer ownership for payment. We could also see transactions that represent both digital and real-life assets, which can be tracked, audited, and managed from manufacture through to handover – facilitating a circular economy of those assets.
Real-time digital twin.
In the utopian blockchain future, there is no disconnect between what we see and what we store digitally. A digital twin of a building can act as a live representation of its real-life counterpart. This unprecedented flow of data offers huge benefits to our industry, from monitoring performance and energy-use in real time, to predicting and automating the maintenance of building parts.
Back to business (with a dose of reality)
Like the internet of the 90s, the exciting possibilities above are akin to pitching broadband-enabled streaming when most people aren’t even connected to dial-up yet. There are many challenges to be overcome. Businesses are struggling with the challenges of blockchain, especially when it comes to demonstrating a business case. This is partly because there can be too much focus on ‘doing something with blockchain’ rather than on how it might be leveraged to contribute to a business’s vision. One of the first key steps (much like the internet of the early 90s) is establishing the network first; that’s where the value lies. A single entity cannot develop a solution alone and can’t fully benefit alone either. We need partners across the industry supply chain to collaborate on establishing such a network.
So, regardless of what we’re Googling in 2019, let’s make sure it’s the year we no longer think of blockchain technology as confined to the finance industry. It’s a key element of a new future in engineering.