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The AEC industry is already getting quite excited about the thought of blockchain bringing transparency and fairness to the early stages of a building project. Above all, they see it as an opportunity to decrease the administrative costs of digitalisation and a way to protect the licensing of their individual Intellectual Property Rights (IPR). In the complex world of collaboration within Building Information Modelling (BIM), blockchain offers better permissions and accountability, among other things.
As it stands, when a building operates well the credit goes to the facility managers and when things go badly, blame goes in the same direction. This may seem a fair balance for the facility managers but the AEC sector is largely left out of credit and blame when it comes to operational performance. Blockchain offers the chance to see the full picture of influence on the entire lifecycle of a building, thereby enabling true AEC reputations to emerge.
The influence of such a change cannot be underestimated. By bringing true accountability to the entire lifecycle of the building, you keep the sector honest, essentially leaving them nowhere to hide. AEC companies would no longer be able to take short cuts, knowing that their faults may cause problems years down the line. They will also receive the credit they deserve, even decades later, so they might better build their reputation. By safely recording all elements of the design and construction process, we can trigger improvements across the sector.
Much more tangible is the impact of blockchain on the construction supply chain. Blockchain offers transparency and speed of supply and payments, through smart contracts among other things. Blockchain also allows for a true and trusted measure of the materials required and of quality assurances, cutting cost and raising quality to the construction itself.
“By using Blockchain and BIM in tandem, along with other quickly advancing technology, there is an opportunity to create a leaner procurement method which better engages the individuals who make up a project team. This will result in reducing costs by removing intermediaries, where a client has more control and transparency of cost, time and scope on their project,” says consultant, Dave Hughes.
With blockchain we have the potential to allow people to buy a house or building with the click of a button. A report released by Saïd Business School, University of Oxford takes an expansive look at blockchain for real estate finance and other property technology. Findings within the 95-page report suggest that blockchain is fundamental to the dramatic changes facing the real estate industry today.
“Proptech came from FinTech (Financial Technology), which brought us online banking, peer to peer lending and the crowdfunding movement,” said Andrew Baum, author of the report. “So, why have we not seen a similar revolution in real estate? The answer is that real estate tends to be conservative and closed off to innovation. However, thousands of extremely clever people backed by billions of dollars of investment are working hard to change the way it is traded, used and operated. 93% of tech start-ups fail to last more than three years, losing millions in investment, but those who prosper will have a radical impact.”
In fact, blockchain can support the entire property purchase and sale transaction process. The technology helps buyers by improving the property search process, as well as with underwriting and financial evaluation. Then, by using smart contracts, it can improve purchase due diligence by using smart identities and blockchain-based title registry. In addition to execution of the sale and facilitating easy international sales. ‘It might be that in five to ten years’ time we will be using crypto-currencies such as Bitcoin to buy and sell our houses,’ he said.
For rental and leasing scenarios, blockchain supports the sector in similar ways, namely by enhancing the speed of payments and other processes. Automatic payments also encourage cash flow and provide the endless gift of advanced real-time data analytics.
Blockchain creates trusted identities for humans and Internet of Things (IoT) devices, thereby unleashing the power of the IoT in the building space. Primarily, by reducing the vulnerability that cyber attacks created when adding a plethora of digital endpoints within our buildings. Also by alleviating the security concerns of building occupants in this uncomfortable age of sensing and tracking.
“The coming of IoT, smart cities and smart buildings may bring benefits to facilities management that include cost reduction, more efficient systems, and better quality of life for workers, but flaws in security of networks and devices could prove catastrophic. Device identity and security will be a key factor in maintaining overall security of buildings and their systems against cyber attacks.
The IoT can be secured by; authenticating devices and data points of origin, securely sending data from devices to blockchains, maintaining data security on the blockchain, and sharing data securely with individuals and devices by using private and public keys. Beyond aiding privacy and security measures, these trusted identities can bring about a whole set of other smart building trends that have not quite been reaching their potential.
Take, Building Automation Systems (BAS) for example, central to the smart building movement. “A blockchain-based building automation system (BAS) may seem far-fetched, but it would enable a “pay for performance,” or “BAS as a service,” business model. Additionally, the building could improve operating efficiency by accessing trend data for similar peer sites,” says Aamidor. “Such a BAS would also be more resistant to hacks. For example, setpoints would be distributed in blockchain instead of being on a single server,” he added.
While researchers from Deloitte highlight co-working spaces, which have become central to the emerging ‘office of the future’ but is often held back by the complexity of managing so many short-term tenants. “As the framework illustrates, blockchain seems to be most applicable to dynamically configurable or co-sharing spaces, which have a relatively higher number of tenants and shorter duration leases compared to traditional property types,“ a Deloitte white paper states.
“WeWork may see blockchain as a way to increase demand for co-working space. Other co-working space operators may view investments in blockchain as a way to differentiate their offerings and capture market share,” the paper continues, highlighting the extent to which blockchain is changing the sector. “Blockchain has the potential to disrupt facility management, just as it is positioned to fundamentally change the financial sector,” echoed Aamidor.
Every now and then a technology emerges that has the capacity to change everything. The Internet, electricity, steam power, even the wheel and fire once upon a time. 10 years ago blockchain mysteriously emerged but it has taken almost a decade for us to truly grasp the full potential of this game changing technology.