The coming smart city revolution – The Property Chronicle
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The coming smart city revolution

Technology

Sensors, data and automation will increasingly define construction projects – as well as cityscapes

There are more than 1,000 ongoing smart city projects around the world right now. Sensors, data and automation will increasingly define construction projects, as well as cityscapes. The emergence of the connected city leads to many new possibilities – and challenges . For example, how do you integrate and leverage smart features? How do you safeguard personal data? What about creating a seamless interaction between various systems, including individual buildings and city infrastructure (such as transport and energy systems)?

I advise several blockchain companies and follow the evolving ecosystem closely. From personal experience it is clear that blockchain is about much more than cryptocurrencies and payment services. By 2020, there will be 600 recognised smart cities around the world and blockchain can underpin many, if not most, of the processes that will make those cityscapes smart.

The question becomes: if blockchain is going to be the foundation of smart cities, what does that mean for construction and real estate companies?

The growing cityscape

More than half the world’s population now lives in cities. Before the middle of the century, that number will jump to two-thirds.

While cities account for the bulk of many countries’ economies, they also present administrative, organisational, logistical, social and environmental challenges.

Smart cities that involve the use of information and communication technologies (ICT), as well as the Internet of Things (IoT) and other related technologies, have been heralded as the way to mitigate at least some of these issues.

However, smart city technologies like ICT and IoT come with their own conundrums. For example, how the various systems that ‘live’ within a smart city environment interact with each other and individuals. How does a smart building, for example, ‘talk’ with a driverless car, or know you, the passenger, have the right to enter, and let the vehicle through the outer gates? Or how does one automate and democratise the use of energy in a building, so that inhabitants can choose if they only want to use locally produced renewable energy?

The answer is that without efficient, protected data transfer and proper use of data, most smart city initiatives and technologies will fall short.

Blockchain to the rescue

All of which brings us to blockchain. For the smart city revolution to reach its potential, it needs a horizontal integration of individual services that is a) highly automated, b) highly secure and c) allows for streamlined, accountable transmission of data. Using buildings as an example, they need to be able to collect data as well as exchange it with other buildings, power delivery systems, driverless vehicles and weather forecast systems. Some of this data will be personally sensitive, some financial, and some business-related.

One possible solution is for individuals to have a blockchain-based ‘self-sovereign identity’ (SSI) – a consolidated digital identity. The goal is to provide individuals with a wholly unique and safe ID that also helps store data, in place of the fragments that each of us currently have scattered across different public and private organisations, applications and websites, with little to no control over their storage, updating or sharing. (Not to mention the risk of losing control of data to hackers.)

Without delving too deeply into the technology, blockchain’s decentralised distributed ledger technology (DLT), distributed key management and peer-to-peer encryption technology is regarded as about the closest thing to unhackable we know today. It also enables the use of smart contracts with an if/then structure (if A happens then B happens automatically). In other words, blockchain could potentially automate many of the processes and interactions between systems that smart cities will rely on. Simultaneously, it could allow for secure logging of data and data transfers within and between systems.

Large corporations are already engaged in developing these aspects of smart cities. For example, the Chinese e-commerce giant JD has opened a dedicated smart city research centre with a focus on blockchain and AI.

Country and city governments are also backing the technology: Sweden, the UK, USA, UAE, to name but a few. Perhaps the best illustration of the potential public organisations see in blockchain-driven smart cities comes from China. The country, which has been solidly against cryptocurrencies, looks set to integrate blockchain in many smart city projects, including the $380 billion development of Xiongan.

The many uses of blockchain

While some of the above is a glance into the crystal ball at what the future may hold, the construction industry need not wait with integrating/trialling blockchain technology. It already has several uses that can alleviate current bottlenecks and inefficiencies.






Technology

About David Butcher

David Butcher

David is a partner in the Technology and Media team, based in London with over 15 years experience. David has wide experience working with both rapidly growing and large international and domestic groups reporting under US GAAP, IFRS and UK GAAP. He works with his clients to develop strong collaborative relationships while providing commercial insights and practical advice. During his BDO career, David has been on secondment to BDO’s Washington DC office.

Articles by David Butcher

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