Blockchain is one of those technological innovations that promise to revolutionize anything it touches. While cryptocurrencies do appear to be surviving the test of time, the actual use of blockchain in the buildings industry has so far been struggling to match the hype that surrounds it.
Blockchain is essentially a decentralized database that chronologically and securely records transactions, but that simple definition hides a complex range of applications that can improve the entire lifecycle of the building. From design and construction to operation and maintenance, we try to push through the hype to explore some key use cases of blockchain in the buildings industry today and tomorrow.
The ongoing evolution of buildings is creating much greater interaction between building systems. Increasingly, such systems will no longer be a post-construction afterthought but fundamentally baked into the early design phase of buildings. Blockchain could be utilized to better manage the interaction between such systems and various partners within a building, helping to fairly and automatically distribute payment for channel usage. In doing so, these networks can change our design considerations and selections as we strive to develop increasingly interconnected smart buildings and campuses.
Consider modular buildings, for example, where prefabricated parts of the building are manufactured in factories, delivered to the construction site, and clipped together like LEGO blocks. Such a system will require a new level of accuracy and robustness in design data, which could be enabled by a blockchain that connects the supply chain from planning processes, construction contracts, and landlords through reliable design documentation. Similarly, as micro-grids emerge in campuses and complexes, blockchains can be used to enable the necessary design of energy and fiscal exchanges between systems and stakeholders.
Recently, there has been a growing discussion around the integration of blockchains with Building Information Modeling (BIM). BIM-led design incorporates all the necessary mechanisms to achieve end-to-end communication, data exchange, and information sharing between project actors. The 3D models generated in the BIM process are delivered as physical assets, for example, through IoT services. However, the orchestration of IoT devices in a highly modular environment with many moving parts and inter-dependencies between the stakeholders, all striving for greater efficiency and performance, creates issues that can be resolved by blockchain.
“Existing research has so far established that blockchain and BIM have great potential to enhance construction project performance. However, there is little research on how blockchain and BIM can support sustainable building design and construction,” reads ‘Blockchain and BIM for Sustainable Building Development’ a 2021 paper by Liu, Z, et al. “Blockchain can assist BIM to efficiently use data to objectively evaluate projects, simulate building performance and full-cycle usage to improve the overall construction project quality and achieve the goal of environmental protection and efficient resource conservation.”
The building construction phase is full of disputes, including differences of opinion over plans, specifications, and scope of work; varying interpretations of planning documents by contractors; as well as project access conflicts and construction defects. By acting as an error-free and trustworthy contract administrator, blockchain could reduce these issues by monitoring and managing the construction process through smart contracts, that act as universal agreements to protect legal or financial transactions, and reliably recording value exchange between all parties. The consequent benefits to the construction process are significant.
Smart contracts work on the “if/then principle” for administering and paying suppliers. So, for example, if a plumber repairs the pipes, he then requests an inspection, but only when the inspector confirms the work will the plumber get paid. Or, when buying parts, for example, a portion of the cost is paid when items leave the supplier then liability is transferred to the shipping company, the rest of the payment is only released when the parts arrive on the construction site. These smart contracts could be used for almost all interactions and are enabled by a trusted blockchain, thereby increasing efficiency, ensuring all parties get what they’re supposed to, while minimizing the numerous disputes that hold back construction.
“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, Robert Schwertner. “Blockchain and the construction industry is a natural pairing since there are clear deliverables. It won’t be long until it’s used not just in construction, but healthcare, all finance, and more.”
Operation & Maintenance
Smart contracts could also be used throughout the operation and maintenance phases of the building lifecycle by creating a Decentralised Autonomous Organisation (DAO). A DAO is a kind of virtual organization where all building arrangements and rules can be securely encoded as computer programs, using smart contracts. Utilizing the digital infrastructure established by new metering devices, monitoring technology, and the IoT as a whole, a DAO could autonomously manage rent payments, handle corporate fees, supervise insurance payments, and even control maintenance requests, fairly and efficiently.
“From energy management to billing, blockchain will eventually touch everything in buildings,” says Joseph Aamidor, of Aamidor Consulting. “Blockchain has the potential to disrupt facility management, just as it is positioned to fundamentally change the financial sector.”
Based on predictive maintenance or fault detection, for example, a blockchain-enabled DAO could order a new light fitting to replace a broken one, confirm delivery to pay the supplier, request and confirm installation, then test the fitting before releasing the payment to the installer. Furthermore, utilizing blockchain’s secure digital identification features, the identities of delivery and maintenance people can be recorded in line with verified company information, thereby increasing the safety of building assets and occupants. Using trusted blockchain technology, all identities and payments can be secured fairly at every stage of the process.
“With blockchain technology, a world of possibilities has opened and we now have a true peer-to-peer platform that enables personal economic empowerment. We can own our identities and our personal data; we can do transactions, creating and exchanging value without powerful intermediaries acting as the arbiters of money and information,” Alex and Don Tapscott, write in Blockchain Revolution. “The first [web] generation brought us the Internet of information. The second generation, powered by blockchain, is bringing us the Internet of value, a new, distributed platform that can help us reshape the world of business and transform the old order of human affairs for the better. But like the Internet in the late-1980s and early-1990s, this is still early days.”