Master Building New Communities Through Blockchain Technology

Nov 08 • Nicky Redl

Community construction

Looking throughout history, community development both from an immediate construction standpoint as well as a long-term, societal standpoint has always been important for society. Smart, well-built communities are not only a boon to residents, but they can encourage renewable practices that will be essential going forward. Typically in the past, construction companies have spent little time considering the long-term effects that their design decisions make in the communities coming years. It’s only recently that the concept of sustainability has become a big talking point within the community development/urban planning ecosystem, with an increasing number of community projects striving to incorporate the newest innovations in this field into their design philosophy. 

 

 

With these things in mind, community design and development might have finally reached the stage where newer technological advancements in the field of blockchain technology as well as other innovations can finally be integrated into how we go about building our communities. Indeed, we’ve seen much of this already with the advent of so-called “smart cities.” The idea that through the Internet-of-Things (IoT), traffic, public services, document circulation, etc., can become fully automated. It’s this combination of IoT, big data, and blockchain technology that’s making this trend possible today. Community development is only going to further innovate in light of these advancements, making the entire process more straightforward, more accessible, more efficient, as well as producing a better outcome for the residents of the neighborhoods we end up creating for the future. 


 

The Unison of Blockchain Technology, Big Data, and the Internet of Things

 

Internet of things

 


Blockchain Technology

 

Originally created with digital currencies in mind such as Bitcoin and Ethereum, Blockchain technology is quickly becoming a backbone for a new type of internet along with its potential to record almost everything of value. Invented as a peer-to-peer system in 2008, blockchain technology is an open, distributed database that maintains a growing list of ordered records (called blocks) recording all manner of information, most commonly including transactions. These blocks contain a timestamp as well as a link to the previous block in the “chain,” and once this

Ledgers in one form or another have been the heart of commerce, recording the flow of money, property, and more. As such, it’s not too much of a leap to see how new distributed ledger technologies such as blockchain can play a significant role in how we do business. At the same time, there has been much speculation from industry experts on how blockchain technology can contribute to a more efficient, less-costly, construction industry. These improvements can take place both on a ground-level - the actual construction process dealing with contractors, suppliers, and the on-site building process – as well as the more conceptual, planning stages of any project.

 


Internet of Things (IoT)

 

The phrase the Internet-of-Things is one used to describe any object or machine component that has built-in sensors to monitor its operation conditions, performance levels, or physical states. These various components can record information as well as transfer it to a central database. In the construction industry, this also is known as telematics.

This growth of “intelligent machines” as some describe them has been quietly happening for several years, with incremental changes leading to better-operating systems over time. Leasing or buying a new machine from Caterpillar or Komatsu, for example, would include a package of telematic sensors and some sort of software where you can see the data being gathered. It’s not hard to imagine a plethora of construction machinery and tools being built with their own internal sensors, transmitting data wirelessly and automatically without the involvement of other people to check on these readings.

Other examples of IoT implementation include street lights that light up when someone walks nearby, automated traffic lights that detect cars, and much more. It won’t be long before homes will be built with IoT enabled technologies included in them by default, serving to verify both that they have been installed correctly by builders but also to help residents live more efficiently.

 

Big Data

 

So-called “Big Data” is becoming a growing source of analyzable information for evidence-based decision making. As new community developers, urban planners, and sustainability proponents worry over the question of how to accommodate more people in our cities, along with the traffic that comes with them, making decisions backed by this big data can be a turning point in making our neighborhoods more sustainable.

Through analyzing population density, foot and vehicle traffic, along with the efficiency of existing public transportation, even aged urban areas can see drastic improvements that otherwise wouldn’t be possible.
A recent Moscow-based initiative focused on improving the livability of the cities 10,000,000 plus residents is one of the more recent examples of big data analysis in community design. The undertaking – known as Moscow’s My Street project – saw the largest urban development project in the world, renovating over 230 streets, embankments and squares throughout a three year period – a total investment estimated at USD 1.6 billion. The results were unanimous, with overall traffic speed in the city reduced by 10 percent and accidents down by almost 40%, with pedestrian traffic going up by 70% on redesigned streets. While these types of projects require revamping existing urban infrastructure, community builders today have the luxury of having these tools at their fingertips at the very start of their project.

 


Impact of Blockchain Technologies

 

While these three developments have all been a great boon to urban planners, it’s the recent development of decentralized technologies that truly promise to revolutionize community development. The advent of the “smart city” concept, where blockchain technology is integrated with IoT as well as big data in order to optimize the efficiency of our communities, is quickly become a model for urban planners to mimic (and many countries are doing just that).

While the scope of this idea has been limited to only communities for now, McKinsey analysts estimate that by 2020 the number of smart cities globally will grow to 600, and by 2025 it’s predicted that 60 percent of the world’s GDP will be produced in these areas. It’s clear that the future of our economies correlates with how well we lay out and develop our future communities, and these technologies will play a massive role in doing that.

 


Planning and Approval

 

For one, blockchain technologies will help make the planning and design processes of new communities simpler, freeing up people to engage in actual value-adding tasks, as opposed to going through mundane technicalities in order to proceed. At each stage of the planning process there are steps that could be automated through decentralized technologies. Smart contracts, digital signatures, and other tools all play their role in making this possible. For example, before purchasing a land site, a buyer could find a much clearer picture of whether the site can attain planning permission by inquiring into a standardized database of policy relating to that particular site. This would also help with financial feasibility assessments as well as any other necessary alterations or contributions that would be important to know in advance. While this planning process will never be simplified into a mere tick-box scenario, information regarding prospective sites can be made much more readable, whether the area is a flood zone based on past data, traffic metrics, environmental hazards, etc.

A vast array of issues can be dealt with immediately and quickly through a decentralized database powered by blockchain technology.

Another advantage of using distributed networks such as blockchain for the planning stage of community development is that it would let all relevant parties, along with their relevant information, consult each other almost instantaneously. Local, regional, national, as well as historical and environmental authorities can all contribute to approving an application through blockchain technology much more quickly than would otherwise be possible.

 

Fundraising

 

It’s easy to take advantage that community development projects often have local, regional, or national government backing behind them. However, in other parts of the world, community development that’s oriented around sustainability is hard to justify financially. Third-world and developing countries often struggle to find the funding to support these initiatives. In this way, construction projects can use alternative methods of financing back by decentralized technologies.

 

Planners can offer ICO’s, or initial coin offerings, as a way of raising money for specific projects, and ownership in the future for specific buildings can be auctioned off in this way.
This also would double as another method of testing the viability of a potential project by the amount of interest and funding in garners from local communities. Projects that are promising can hold ICO’s to a neighborhood, region, or city, and if it meets certain funding thresholds, the project can move ahead.

There are only a few blockchain powered projects taking this route as of yet (the Seafaring institute being one of them, which we’ll cover more on later), but it can be a compelling alternative for project managers to consider, especially for more grassroots type organizations looking to get momentum behind their plans.

 

 

Improvements in Sustainable Development

 

 

sustainable development

 


Energy Consumption

  

Among the most significant concerns for sustainable development among new communities is energy consumption. The smart city concept is already integrating IoT and blockchain technologies in such a way as to empower local residents to produce, store, and transfer their own energy in ways society has never seen before.

The idea of trading excess energy through decentralized technology isn’t a new one, with one of the most notable examples in blockchain history being the touted Brooklyn Microgrid. Traditionally, the flow of energy between end-users and their utility providers has been one-directional; from producers to consumers. However, with growing interest from “green” oriented homeowners and citizens, there is a sufficient market to justify a new type of solution. As these people began to install rooftop solar panels, these homes were able to send some excess power back to their providers and reduce their bills. While a good first step, it has a long way to go before creating a truly efficient system for the two-way transfer of energy.

Urban planners and community developers are embracing the concept of people trading energy amongst themselves.
Peer-to-peer energy trading has traditional had plenty of regulations hampering any real progress n this direction. The National Electricity Market (NEM) in the United States requires all energy vendors to have a generator larger than 5 megawatts, which is the equivalent of 50 million dollars worth of solar panels. This restriction has put conventional P2P energy trading out of reach for most people.

However, a decentralized solution that has a combined energy output 50 megawatts would be sufficient. As such, blockchain powered, community-oriented independent microgrids that connect neighbors is one idea that is quickly being embraced by community developers. The 2017 experimental project called the Brooklyn Microgrid saw a test community of Brooklyn residents who had solar panels on their rooftops trade energy amongst themselves. Participants installed smart meters that tracked the quantity of energy they produced and consumed, and through smart contract powered technology, automatically distribute any excess energy to other local residents through their mobile app.

While large-scale decentralized solutions remain quite difficult to implement as of now, it’s not difficult to see these community-oriented microgrids pop up in the new communities of the future. These solutions also wouldn’t be particularly expensive for construction companies responsible for implementing them.

 


Waste Solutions

  

Another prominent example that community developers can look towards are decentralized waste management solutions. Currently, communities drop off empty batteries, electronics, chemicals, and other substances at designated drop off locations, whether that be fire stations, chemical plants, or otherwise. Blockchain solutions can be made to compensate community members for contributing these used goods. Recereum is one blockchain project that’s tackling this issue, incentivizing participants through tokens that can be exchanged for fiat currencies or other benefits.

The Plastic Bank, created in Haiti, Peru, and Columbia, is yet another blockchain project tackling waste management in communities. The basic premise sees community members drop off collected plastic at the processing center and receiving payments in the form of tokens for their contributions. These tokens can then be exchanged for certain household goods or commodities.

In either case, the idea behind these solutions is to help incentivize community members to take a more proactive role in recycling and waste management. For those responsible for community design, planning, and construction, implementing facilities beforehand that integrate these types of solutions is a smart way of encouraging sustainability for future generations.

 


Revolutionizing Ownership and Transparency

  

Blockchain technology would also let residents of future communities have a clear track record of every change, renovation, and any other detail that took place regarding their homes. Blockchain technology can store these details in an easy to access, unalterable manner, letting future homeowners and related parties know everything about a particular unit. This would be useful as well for renovation projects, as they can easily pull up a record of all information concerning a unit, as well as what previous owners and renters have thought about them.

At the same time, ownership can easily be transferred through blockchain technology, even through digitized tokens. Ownership of property in the future can be tokenized, which would not only reduce transaction fees, but make it easier for community development projects to sell residential units to prospective buyers.

 

 


The Future Possibilities of Blockchain-Community Development

 

Building communities, optimizing urban areas, and improving our cities through blockchain technology is something that’s already taking place throughout the world, but the possibilities are truly endless. For more ground-to-earth examples, numerous cities all over the world are integrating these technologies.

In the United Arab Emirates, Dubai is quickly approaching its goal of turning the city into the first global blockchain-powered metropolis by 2020.

Automated sensors, unmanned trains, solar panels, wi-fi benches are all in development, along with the use of big data and analytics to help better design future communities. The hope is that these measures will reduce traffic and improve individual interaction in their communities and streets. But over the long term, even more wild possibilities emerge. Another significant example of building a community from scratch while utilizing decentralized technologies is the famous Blue Frontier’s Seasteading project.

 

Backed by notable members such as Peter Thiel, the idea behind this project is to create off-shore, floating communities that would let humans have permanent residences on the oceans year-round. As an idea, it would be one measure to deal with the growing global population and potential overcrowding. Linking together floating, modular structures that would have homes and buildings built on top of them is undoubtedly too futuristic for some, but that hasn’t stopped the floating island project from continuing to gain traction throughout the years. Most recently, blockchain technology has been integrated into these communities as a form of payment while also using a token crowdsale to help finance the community’s development.

 


sustainable floating island-1

Sustainable floating island  built by Blue Frontiers                                                                © https://www.blue-frontiers.com/en/

 

What makes this concept even more innovative is that these so-called “Seazones” would be considered special economic zones under international law and would be subject to different regulations. What’s more, the project has already begun integrating decentralized-legal solution systems, powered by a start-up called Klero’s, in order to help automate disagreements on these off-shore communities.

According to the Varyon whitepaper, the project states that “Promising solutions can branch off at any time by physically separating to create new Seasteads – enabling a high level of evolvability and quick rate of adaptation. Mimicking nature’s time-tested method of variation and selection, the process of decentralizing governance through seasteading will spark the creation and evolution of new advancements in civilization.” Time will tell whether this is mere hyperbole, but its undeniable blockchain technology is playing a significant role in both the construction and social development of these seasteading communities.

While these kinds of communities might remain a futuristic possibility for most companies and professionals involved in the community development ecosystem, they do underscore just how varied blockchain-powered possibilities can be.

 

Addressing potential concerns

 

That’s not to say there aren’t hurdles that can hold back this process from taking place. While all these ideas sound great in theory, implementing them can be challenging.

For one, the exact logistics of how blockchain would practically be implemented needs to be worked out. The impact of widescale blockchain implementation, especially if done quickly, could be devastating for the industries existing “middlemen,” leading to a dramatic change in the workforce (albeit, most experts are not worried that the construction industry will change so rapidly). A slow, gradual implementation would be less dramatic for the industry and give it time to adjust.

Another worry along the lines of sustainability is that running complex blockchain systems could require a large amount of energy. Tokens such as Bitcoin and Ethereum need substantial computing power in order to verify transactions. This process of information verification, also known as “mining,” is computationally intensive, with the current energy demand from bitcoin mining equalling the expenditure of the entire country of Ireland!

However, older cryptocurrencies rely on more dated consensus algorithms that are in turn more energy intensive. Proof-of-Work (PoW), the first mechanism and the one Bitcoin uses, is the oldest and most energy intensive. Other systems such as Proof-of-stake (PoS) and delegate proof-of-stake (DPoS) are superior to older consensus algorithms in terms of efficiency, with future advancements in this area likely reducing the energy consumption even further. At the same time, blockchain technology can still operate on more centralized platforms. Decentralized solutions on a community level involving specific areas can use Proof-of-Authority (PoA), an extremely energy friendly consensus algorithm that’s used commonly for private blockchains.

Other concerns relate to the regulatory issues concerning these systems. Who sets the standards and regulations for these systems if they are going to be integrated with our public communities, and how will they be monitored? These are all issues that need to be addressed sooner or later.

Conclusion

 

Blockchain technology has a lot to offer for those involved in community development at all levels of the decision-making process, with many urban projects as well as entire cities themselves undertaking massive projects to integrate these advancements. Urban services, public infrastructures, environmental concerns, and general liveability in our communities can all be dramatically impacted by the use of this technology, and it’s only a matter of time before these innovations become commonplace.

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