The application of Information Technologies is a major driver in the progression and development of Smart Cities. Blockchain technology, which is considered relatively new, and consists of a multitude of underlying technologies and protocols, can be a significant factor and asset that contributes to the expansion of those cities. With the growing possibilities of blockchain and its many applications across multiple fields, the technology can establish a new level of comfort and security for communication and transactions between various stakeholders within a Smart City ecosystem. It can be defined as one of the most crucial and essential components in creating more secure, transparent, efficient, and resilient cities. There are multiple projects and incentives underway that aim to integrate blockchain into Smart City structures and systems. Let’s go over some of them and briefly look at the role blockchain has to play in the cities of the future.
Blockchain technology has an important role to play in the public and private sector
The technology took the digital world by storm back in 2009, when it made its official debut as a digital ledger book for the cryptocurrency Bitcoin. Ever since then, blockchain has been used to reshape the way businesses have operated and done things in various industries, ranging from finance to healthcare, manufacturing, and the government. At its core, blockchain is an innovative technology comprising an encrypted database that is decentralized, distributed, and unassailable. It establishes a digital record that is impeccably secure and can be easily accessible to the public.
Advanced technologies such as blockchain have an important role to play in solving various societal issues and achieving efficient urban management. It enables participants in a network to effectively exchange data with a high degree of reliability and transparency without the need for a centralized administrator. Cities that have a variety of stakeholders know that the exchange of data between stakeholders is essential for achieving highly convenient urban services.
On a global scale, Smart Cities have embraced blockchain as a fundamental block to urban planning that enhances the way citizens of those cities live. Various incentives and projects have already made global headlines, with Dubai being a prime example of a city that has established itself as a global leader in the smart economy and the first blockchain-powered government. The public sector is by far not the only segment of a smart city that stands to benefit from the many applications of blockchain technology. The private sector is further exploring the possibilities and potential that can be applied to business processes to aid companies of various sizes in competing on a more even playing field, advancing their ability to be strategic partners to Smart City projects.
How Blockchain is making cities smarter
Blockchain has come a long way from only being recognized for its association with cryptocurrencies. Nowadays, blockchain technology can be applied to pretty much every sector and industry where a high level of security and trust is needed. Let’s take a closer look at some blockchain examples and ideas that are reshaping the landscape of urban management and development.
It has been reported that Cybercrimes are on the rise as society moves towards a highly digitalized era where cities are growing more reliant on technologies for their daily operations. A recent publication by Embroker has suggested that cybercrimes will cost companies an estimated USD 10 trillion by 2025. Blockchain is thought to be extremely helpful in reducing the risk of cyberattacks occurring in multiple fields. A few examples of how blockchain can support and improve cybersecurity include areas such as IoT security where end-to-end encryption, secure communication, and authentication are made possible through the use of blockchain, aiding in improving cybersecurity with AI and IoT devices.
When it comes to software downloads, the authenticity of potential updates can be verified using blockchain as a method of preventing malicious software from being installed. In the case of identity protection, blockchain validation techniques, like cryptography, can be applied in the restraint of identity thefts like driver’s license identity theft or mail identity theft, for example.
Blockchain offers an extensive range of applications and possibilities when it comes to the healthcare sector and is already transforming the industry in various ways. Blockchain technology is being used to create a distributed system for patient health records, with transparent supply chains for medicines as well as managing the outbreak of harmful diseases. With the adoption of blockchain increasing, it will soon be possible for the entire process of diagnosing and treating patients to occur over blockchain, including secure financial transactions.
Additionally, blockchain can be integrated with other advanced technologies such as AI to further enhance the healthcare sector. For example, when combining blockchain technology and AI, it will be possible to diagnose patients through the use of wearable diagnostic tools which will then allow for the diagnosis to be shared with a medical professional via a secure blockchain link. After that, patients and doctors can set forward a smart contract for further treatment. Similarly, those smart contracts can be applied to insurance claims, and in the case of telemedicine, patients can be treated without the need for an in-person visit to a doctor.
Better Management Of Waste
Blockchain has shown great potential in enhancing the management capabilities of cities when it comes to maintaining a clean environment and high hygiene standards. When integrated into a city’s ecosystem, blockchain can provide real-time tracking of various aspects related to waste management. For example, it can offer transparent, immutable information regarding the amount of waste collected, who collected it, and just how the waste is being circulated through the network and recycled or disposed of. Additionally, governments could also incentivize waste management as a way to promote cleaner cities with the help of blockchain. This could motivate citizens to actively participate and contribute to better waste management.
A More Comprehensive Education System
One of the most useful and impressive applications of blockchain for Smart Cities has to do with simplifying processes within education systems. Educational institutes have to deal with a tremendous amount of student data daily, which often means transferring this data between multiple institutes which can in turn be incredibly time-consuming and often hard to do. Blockchain has the potential to solve this problem by creating a centralized, immutable database where different academic institutions can easily access and share information across the blockchain network. This will help tremendously with various administrative tasks. Furthermore, establishing secure networks of this kind will also help reduce fraud instances, such as creating fake mark sheets, as student data will be impossible to alter due to the immutable nature of blockchain.
An Increase In Energy Savings
The entire world is heading toward a greener and cleaner future thanks to innovations in various sectors such as technology and intelligent urban development. Minimizing our use of resources has become critical as urbanization is on the rise and the world’s population continues to increase. Conservation of resources has been a primary focus in the development of future Smart Cities which includes blockchain technology. There are multiple ways through which blockchain can help increase energy savings in smart cities. For example, a blockchain-based network could be implemented to monitor citizens’ energy consumption. Citizens would also be able to trade surplus electricity with other members in exchange for incentives.
Improved Efficiency In Mobility
One of the major hurdles for cities, especially those of large sizes, often has to do with the effective management of a transportation network. The concept of smart mobility was created as a means of improving access to modernized transportation systems that are efficient for residents of cities and sustainable in terms of reducing the impact that the transportation sector has on the environment. Blockchain technology can be applied alongside IoT devices and systems for continuous real-time tracking of vehicles and passengers. Various applications of blockchain technology can allow transport decision-making authorities to optimize how they strategize their routes and schedules, adapting to the different needs of commuters and achieving better results regarding environmental and sustainability goals.
Furthermore, an efficient transportation network that successfully leverages blockchain technology can allow users to pay securely for transportation services throughout the transportation ecosystem, regardless of which mode of transport they are going to choose. Blockchain offers a more comprehensive and in-depth understanding of a commuter’s profile as its capabilities of retaining and storing vast amounts of data allow for the maintenance of the entire commuter’s travel history, behavioral patterns, preferences, etc. It also lets agencies monitor the performance of employees such as drivers and other valuable resources. Blockchain can also serve as an enhancer for Mobility as a Service solutions, where a variety of additional services can be provided to citizens in the form of car-sharing, payments, insurance, and maintenance.
Blockchain has shown great potential in simplifying, enhancing, and securing various processes, and operations within a Smart City ecosystem, stretching to many sectors and businesses. Let’s briefly go over a few more examples:
- A reliable registry of local businesses – a business registration system that is based on blockchain can illuminate the lifecycle of a company from beginning to end, providing a highly trusted, 360-degree view to interested parties.
- A virtual “storefront” for every business – blockchain can aid Smart Cities in creating integrated solutions for local commerce. Virtual storefronts for retailers, service providers, restaurants, and lodging options of a smart city ecosystem can implement blockchain as a secure, distributed method for peer-to-peer transactions, payments, and identification services.
- Trade logistics and finance management – blockchain-based trade logistics and finance management solutions in a Smart City model offer the potential to enhance efficiency and create transparency through the removal of unnecessary layers of verification.
- Payments and money transfers – perhaps the most popular blockchain application is the ability to send and receive payments, something becoming increasingly useful for companies that have remote employees or are involved in the global marketplace.
- Smart contracts – a type of contract that refers to the autonomous exchange between several parties once specific, pre-set conditions are met. Blockchain is a great fit for storing smart contracts due to the technology’s security and immutability. It can further be applied to improve the cash flow of a small business, as smart contracts allow for the automatic, instant payment of invoices.
- Notary services – blockchain can provide affordable and convenient notary services for citizens of Smart Cities by allowing for notarized proof of ownership for digital creations.
- Fighting fraud – blockchain makes tracking and managing digital identities indisputable and highly secure through the application of digital signatures based on public key cryptography as opposed to vulnerable password-based systems.
- Supply chain communications/proof-of-provenance – blockchain technology provides a solution for digitally permanent, auditable records that show stakeholders the state of a product, at every step. It can also help streamline the operation processes of the supply chain by making everything transparent.
- Distributed cloud storage – blockchain can be used to establish a secure, encrypted, and decentralized cloud storage solution, with every aspect such as transport, processing, and storage of data being entered into the blockchain, reinforcing accountability and transparency.
Smart Cities and blockchain technology are still in their early stages of development so we’re sure to see many new developments in the sector as technology continues to advance. Both concepts provide many possibilities and a vast array of multitudes that can be incorporated by stakeholders, systems, and processes. Significant progress is predicted in both fields in the near future, with global leaders and officials growing more accustomed to adopting a Smart City model and exploring the prospects of blockchain technology.
Innovations in technology will further give way to new opportunities for applications in various ecosystems that help form Smart Cities, with blockchain taking the lead in this innovation. Urban planners and governments are gradually embracing blockchain technology as a cross-cutting platform that connects different services for the tracking of data, eliminating security breaches, providing seamless transactions, and offering reassuring transparency and safety for public services. Simultaneously, blockchain allows for many exciting opportunities in the private sector from fighting fraud to smarter contractual agreements, with multiple small businesses quickly catching up on the opportunity to leverage the technology and transform their business for the better.