{"id":25526,"date":"2024-04-20T01:34:57","date_gmt":"2024-04-20T08:34:57","guid":{"rendered":"https:\/\/essential.construction\/news\/do-we-need-blockchain-in-construction\/"},"modified":"2024-04-20T01:35:00","modified_gmt":"2024-04-20T08:35:00","slug":"do-we-need-blockchain-in-construction","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/do-we-need-blockchain-in-construction\/","title":{"rendered":"Do We Need Blockchain in Construction?"},"content":{"rendered":"

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Blockchain technology claimed to have the potential to disrupt many aspects of how companies do business. And like other emerging technologies, I have been exploring its uses, benefits and assessing its potential opportunities in the construction industry. If like me, you have been wondering what it is and if its applications are limited to financial services and cryptocurrencies; you will be pleasantly surprised to discover that it has a lot more applications with exciting opportunities for our sector too.<\/p>\n

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Blockchain could have a significant impact on our industry.\u00a0 In writing this article I have discovered that the Australian government is full steam ahead, that many organisations are currently building their own blockchain networks and that it is something that businesses right across the built environment should be preparing for now.\u00a0 But more on that soon, first we need to define what blockchain is.<\/p>\n

Blockchain is a nascent technology that can simplify and secure transactions among parties. It is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, a car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a \u201cblock\u201d with its most significant benefits removing the need for a middle-man to \u201csecure\u201d the transaction, hence promising to remove\/or reduce the cost of brokers, bankers, lawyers, retailers significantly. This is because \u201cthe system\u201d acts as security, as it is decentralised and not stored in any single location. Participants in the network called \u201cminers\u201d confirm the transactions, or \u201cblocks.\u201d So there is no need for a trusted third-party intermediary. Blockchain can thus have powerful applications in all those transactions where we currently need an intermediary, such as payments, supply chains, voting and much more.<\/p>\n

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\u201cBlockchain is the first native digital medium for value, just as the internet was the first native digital medium for information.\u201d<\/p>\n

Harvard Business Review<\/cite><\/p><\/blockquote>\n<\/figure>\n

Blockchain is built on four main concepts:<\/p>\n

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  1. It is a distributed ledger, so every user of the network has simultaneous access to a view and verify the information stored.<\/li>\n
  2. Cryptographic functions ensure the integrity and security of the information.<\/li>\n
  3. Participants confirm changes directly with one another. This replaces the need for a third party to authorise transactions.<\/li>\n
  4. It can run additional business logic \u201cknown as smart contracts\u201d that allows the agreement on and automatic enforcement of the expected behaviour of a transaction or asset embedded in the blockchain.<\/li>\n<\/ol>\n
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    It all sounds exciting, and I am sure like me you are immediately grasping the potential of removing intermediary in the construction lifecycle aiming at simplifying the landscape as well as reducing costs, increase efficiency and reducing time to value. But how do we identify the need for one? How do we put this into practice? How can this new technology be of any use for the construction sector?<\/p>\n

    Late last year I attended MelBIM<\/a> in Melbourne, and I had the pleasure to finally meet in person another digital construction trailblazer like me Belinda Hodkinson<\/a>. Belinda did an excellent presentation on the uses of Blockchain technology in construction and the superb work Australia is doing in embracing the potential of this new technology. I had the pleasure of interview Belinda for this article \u201cstrickly following social distancing rules\u201d.<\/p>\n

    Q.What is Australia doing in terms of blockchain?<\/em><\/strong><\/p>\n

    Belinda: <\/strong>\u201cIt is an exciting time, the Minister for Industry, Science and Technology (Hon Karen Andrews) and the Minister for Trade, Tourism, and Investment (Hon. Simon Birmingham) have jointly announced the development of a National Blockchain Roadmap for Australia. This was announced in early February 2020, with the release of the National Blockchain Roadmap.<\/a> The detail of the roadmap has 12 signposts to reach from 2020 \u2013 2025 based on forming the National Blockchain Steering Committee through to enabling digital trade infrastructure. \u00a0This does not come without challenges, though, as we have noticed with our COVID-19 restrictions, a lot of Australian Law is not written to support technological advancements. The exciting part is the government agencies that have been clarifying and, in some instances, changing to enable the use of blockchain or more specifically crypto-currencies and DLT (Distributed Ledger Technology) which is helping to allow the growth within the country.\u201d<\/p>\n

    Q.What does this mean for the construction industry?<\/em><\/strong><\/p>\n

    Belinda: <\/strong>\u201cThere are many areas that this technology can assist in our industry; the easiest way to categorise them is by the type of blockchain;<\/p>\n