The Blockchain of Cities: Two Experts Share Emerging Trends
Today’s cities are being profoundly impacted by the accelerated pace of technology. All of this comes at a time when the number of urban residents globally is expanding at a pace of nearly six-million a year. Moreover, it is predicted that more than 66 percent of the world’s population will be situated in cities by the year 2050. As a result, today’s urban centers are experiencing a host of challenges related to economic development and demographic inclusiveness.
Ensuing from this growth trajectory is a spate of new technological solutions that hold great promise for advancing the overall efficiency and connectedness of cities and regions. One of the more widely talked-about is called the “Blockchain,” the rapidly developing Internet-based protocol that could be best described as a highly sophisticated ledger of online transactions. It features a highly robust set of capabilities that can be applied to a wide swath of civic sectors, including transportation, housing, telecommunications, and power utilities.
Given its relative newness, the blockchain is still a bit esoteric to most municipal leaders. It is currently best known as the supportive, online infrastructure that fuels bitcoin and other new forms of digital currency. Yet as it evolves in its application, it will become an integral element of what are becoming known as “Smart Cities,” a concept that supports the use of information and internet technology to impact prevailing urban challenges.
The transformative impact of blockchain technology has emerged on the cusp of the widely discussed Internet of Things. This IoT ecosystem involves a network of physical infrastructure, whether devices, vehicles, or utility stations, which capture and exchange data for the effective functioning of critical systems. Applied to cities, this model involves nerve centers of interconnected networks which fuel the efficient functioning of commercial districts and neighborhoods.
At present, a small number of public/private partnerships are initiating blockchain-related projects worldwide in response to requests for real-time, data intelligence that support urban infrastructure connectivity. An example of this is in China where a collaborative relationship between Factom, a blockchain based record verification and auditing infrastructure company, the consulting firm iSoftStone, which focuses on smart business and information technology services, and the Chinese government is currently ramping up.
Peter Kirby, co-founder and CEO of Factom, says that the focus of this initiative is about ensuring trust and integrity of the data being produced by China’s various economic stakeholders — a quality that blockchain technology is exquisitely good at. Said Kirby in an interview with BTCMANAGER: “I think of a smart city as basically comprised of a whole collection of sensors. The challenge though is in how to prove that the sensor data hasn’t been altered somewhere along the way. So blockchain addresses the crux of the problem which is how do you prove that, say, pollution data is correct or that the traffic data that’s been captured is right. In this sense, the blockchain could be viewed as a means of providing audit trails for sensor data.”
Fueling the Next Frontier of “Smart Cities”
Alex Tapscott, CEO and Founder of Northwest Passage Ventures, and co-author of the upcoming book The Blockchain Revolution says that in the not-too-distant future, billions of “smart” things in the physical world will be sensing, responding to, communicating with and sharing important data. He says that this will translate into everything from protecting our environment to charging our homes and managing our health. Given this trend, Tapscott believes that cities and regions will be profoundly transformed by this revolution, as public transit systems, healthcare, power-generation and other industries stand to be disrupted. And all of this he believes will be increasingly powered by blockchain.
“Imagine each household having the ability to generate and store electricity by entering into peer-to-peer transactions with neighbors or by selling at a market rate back into the grid. Millions of homes could become autonomous agents, contracting power automatically with the highest bidder. Blockchain technology is critical to all of this,” says Tapscott, who provided BTCMANAGER with some exclusive insights in advance of his new book scheduled for release in May.
He goes on to note that in the same way power generation stands to benefit, transportation networks will also be transformed by blockchain-enabled decentralization. It’s a well-known fact that transportation is one of the largest expenses municipalities must incur to maintain healthy livable cities. Yet, when you consider that most cars sit in garages, on driveways and on the street when they could be put to better use as an affordable transportation option for commuters, the question now becomes “how can that excess capacity be put to work and what role will blockchain play?”
There are a number of cities and regions that appear to be talking the early lead in terms of examining the return on investment of blockchain technologies. Perhaps unsurprisingly, given how blockchain applications can be found at the intersection of finance and technology, global cities like New York, London, Toronto, and San Francisco are all seeing a Cambrian explosion of blockchain innovation.
“Though much of this has been driven by the private sector, the government also has a role to play, both in advocating for its use and in implementing the technology to deliver critical services to citizens,” says Tapscott.
In the end, the blockchain holds great promise in terms of fueling the overall efficiency, cost savings and connection of cities. As this innovative technology continues to show proven advancements in its applications, look for growing numbers of public utility officials, transportation planners, regulatory commissioners and other civic stakeholders to push for its adoption in ensuing years.