The Updated Blockchain Changing the Construction Industry in Time

Hitting the international market and making news for all the right reasons, blockchain is on the tip of everybody’s tongue.

You must already know what blockchain is. If you don’t, here’s a short lesson:

Blockchain technology is a system that acts as a digital ledger keeping track of agreements, financial transactions, and various other types of information, that is stored and shared through a chain of networks.

Consider it being so: One block can be considered to be a transaction that takes place at a certain point in time. When another activity is added to this ledger, an extra block is added to the previous block. Ultimately, this creates a chain of blocks that can be accessed, without confusion.

Considering the background and the basic function of blockchain, it is safe to speculate that it would fit perfectly in various business fields, especially construction.

How do Blockchain and Construction Fit Together?

Due to its feature of storing data and transactions chronologically, while making it accessible to various groups of people, the owner of a design project will have a so-called project wallet, that will include:

• Contracts with each participant of the project i.e. contractors, architects, engineers, etc.
• Payments can be made simple by dividing them into steps and paying up when each of them gets completed.
• Inspection can become easy with the crucial data available in one place.
• Project modeling, which gives a clear path that must be followed during construction, can be accessed at all times, making the agenda clear.

How can Blockchain Change the Construction Industry?

We’ve already established that blockchain is a force that can make various aspects of construction easy to follow through, considering they’re both deliverables. It becomes easier to hold each party involved in the transaction accountable.

Let’s take a look at the potential uses of blockchain in the industry:

1. Managing and Directing Smart Contracts– Functioning on the if/then principle, smart contracts are a computer-based program, that can be recorded on the blockchain in a secured manner.

-The trust factor increases with clients buying goods from the suppliers directly, and the payment option will depend on the number of steps completed during the purchase.

2. Digital Identification is Securely Backed up, Certifying its Existence– An identification and reputation system can be built on the basis of collecting and storing a huge database of information related to every person involved in each transaction carried out in the life of the project.

-Handling the government contracts, the ability of bodies to work, security clearance, etc. will all become easy.

3. A Decentralised Autonomous Organization (DAO) can be formulated by Combining the Smart Contracts– Smart contracts are taken into use here, along with computer programs run with rules that have been encoded to keep in check all phases of construction.

-By integrating the Building Maintenance System (BMS) and blockchain, the DAO of the building could conduct all procedures related to buying, accepting the delivery, installation, and payment.

What are the Challenges that Blockchain will have to face in the Construction Industry?

It would be impossible for any technology to just penetrate an existing industry with one try. The digital revolution, in the construction industry, is starting out so there will be challenges, like:

• A complex system will need to be built that can take care of the everyday operations, costing the installer in terms of money and human resources.
• Technology is tough as it is, it might be more so when we talk about contractors, in general.
• The market is still preparing itself to accept this new tech, understand it, and identify its advantages.

That being said, once blockchain hits the construction industry, it will become an integral part of the system on which the industry functions.

Since all the data on the blockchain is encrypted, it will become a major task to make changes in the system. The longer the chain, the tougher it will become to crack the code, making information safer.

Author’s Bio:

George Webster has been serving as a civil and a structural engineer at Shah and Talati. He has acted as an arbitrator and mediator in many construction deals. He is a music lover and holds a keen interest in history and politics too.