6 Emerging Applications of Blockchain in Architecture and Construction
For years, it seemed that blockchain technology was a solution in search of a problem. As with anything revolutionary, its early days were marked by hype, trial-and-error, and plenty of skepticism.
Today, however, blockchain applications are finally finding their footing. They’ve moved well past speculative finance and are making a splash in industries where efficiency and trust are make-or-break concerns. Architecture and construction, long known for complex supply chains and costly inefficiencies, are quickly becoming some of the most compelling testing grounds for blockchain applications.
What’s driving the shift? As projects grow more complex and more global, even seemingly simple operations can comprise dozens of players. These linkages can lead to inefficiencies that raise costs and create a multitude of data security and legal risks.
Blockchain tech’s decentralized, tamper-proof ledgers are especially suited for overcoming these challenges. For instance, construction finance professionals working on sensitive projects might store assets in a private Monero wallet while simultaneously exploring blockchain-based solutions for supply chain tracking or smart contracts. Below are eight ways these technological convergences are reshaping architecture and construction:
1) Transparent Supply Chain Management
Building projects seldom depend on local sources. More often, they rely on dozens of suppliers from across the globe. Keeping a reliable track of origin, cost, and quality is a logistical headache, and often a practical impossibility.
Blockchain applications can consolidate all this data with a single, immutable record that verifies where materials came from, when they were shipped, and under what conditions. This makes it far harder for counterfeit or substandard materials to slip into the mix, reducing liability risks.
2) Smart Contracts for Project Milestones
Payment disputes are an unfortunate but exceedingly common fixture of construction projects. With blockchain-based smart contracts, appropriate funds can be automatically released when predefined milestones are met.
For example, when a structural inspection passes or a delivery arrives on site, payments can be triggered with a sign-off. This automation reduces the need for middlemen and shortens delays, keeping things running smoothly. For sensitive projects, payments can also be facilitated over blockchains through stable private coins like Monero.
3) Real-Time Project Tracking
Construction project tracking can be extremely difficult. Typically, by the time a report lands on someone’s desk, the data is at least a few weeks outdated, if not more. Blockchain tech solves this delay by letting stakeholders view a project’s real-time progress in its financials, material usage, and timeline progress in one secure dashboard.
4) Seamless Standards Compliance and Auditing
As a whole, construction is a heavily regulated activity. Even modest projects in permissive jurisdictions tend to come with numerous safety, environmental, and labour standards to uphold. Blockchain’s immutable ledger provides stakeholders with a built-in audit trail, making it easier to prove compliance during inspections or legal disputes. This saves time while also reducing the risk of fines and reputational damage.
This transparent, real-time tracking can even open new funding sources. For example, projects can now be set up so a blockchain ledger records every step of sustainability compliance, from the sourcing of materials to tracking on-site energy use. These verified records make it easier for project runners to earn sustainability certifications, which may not only help reduce legal issues but also open up “green funding” opportunities from governments and financiers eager to hit climate goals.
5) Tokenization of Assets and Investments
Tokenization, the splitting of ownership into digital tokens on a blockchain, offers project developers new funding models to explore. Investors can buy fractional stakes, spreading risk and opening opportunities to smaller players who couldn’t otherwise participate in massive property developments.
6) Digital Identity for Workers and Firms
Verifying certifications is absolutely critical on construction sites. Blockchain applications can be used to give workers portable digital identities that can be carried from job to job. This can significantly reduce paperwork while still ensuring only qualified professionals fill needed roles on-site. Firms can also build reputations on-chain, making tendering and subcontracting more transparent than ever before.
Where This All Could Lead
Architecture and construction are industries where mistakes can cost millions, if not more. The immutability of blockchain ledgers makes them suited to reduce the multifaceted risks that come with today’s projects. Creating tamper-proof records significantly reduces the odds of malfeasance and allows for faster but still-trustworthy automation in areas like payments and supply chain management. Indeed, the increased transparency enabled by blockchain tech may lead to a new era of trust and efficiency in future projects.
That said, adoption is unlikely to happen overnight. There is a lot invested in legacy systems, and middlemen are likely to throw up barriers to wider adoption. A wider conservatism in these industries is also likely to remain a hurdle.
Regardless, the benefits in terms of efficiency and transparency are hard to ignore. For anyone with any interest in infrastructure development, keeping an eye on emerging blockchain is going to be a smart move.
