Home Market Is blockchain technology set to shake up the construction industry?

Is blockchain technology set to shake up the construction industry?

The pace of change in the building trade is famously glacial. Construction professionals are always open to new ideas, but most of the industry’s advances have been evolutionary and implemented very slowly. Revolutionary advances, historically speaking, have been few and far between.

However, in recent years, digital-age IT advances have caught the eye of a large range of forward-thinking builders and architects. For example, drones and IoT tech, if used correctly, could speed up building projects dramatically, boosting safety and reducing risk. But some are starting to think beyond such hardware solutions, and are now investigating the way that blockchain technology might shake up the profession.

Construction-based developments and pilot initiatives are nowhere near as commonplace as they are in the worlds of finance and logistics, for example. But some are now positing that construction’s early blockchain adopters could well reap a range of long-term benefits.

Building with BIM

One fairly intuitive use for blockchain technology can be found in the relatively new field of BIM (Building Information Modeling). BIM first emerged in around 2002, and is a catch-all term for a range of software that allows multiple parties to access digital representations of projects’ physical and functional characteristics.

BIM is not just a 3D blueprint – it captures a project’s geometry, spatial relationships, light factors, building materials data, time and even costs. As such, it involves data input from not only engineers and designers, but also landscapers and other experts.

An increasing number of clients are now asking contractors to incorporate BIM, as they feel it gives them more control. This, in turn, means more and more contractors have to incorporate it. And this is where the blockchain could come in.

The nature of blockchain’s decentralized ledger system means that multiple parties could contribute to BIM models with ease. In doing so, clients could rest assured in the knowledge that the platforms they access feature immutable and tamper-proof blocks of time-stamped data.

Although many are excited by the potential for blockchain-powered BIM, some analysts claim not enough is being done to integrate the new technology. “The potential for [blockchain] use in the construction sector, especially in conjunction with BIM has been overlooked,” writes former Leeds University professor Jeremy Barnett.

Smart Contracts

Using BIM in conjunction with blockchain could also enable the use of smart contracts, computerized transaction protocols designed to carry out the terms of a project – in place of placing mutual trust in “middlemen” third parties. The idea of smart contracts has actually been around since the mid-1990s, a time when per a principal engineer at WP, “blockchain was not available to demonstrate the theory.”

Other analysts agree, saying that blockchain can function as “a useful tool for managing and recording changes to the BIM model throughout the design and construction phases by using smart contracts to negotiate editing privileges and storing an immutable public record of modifications.”

The principal of BNIM architects says BIM can make building projects smarter – and greener. He claims constructors are now “using BIM to maximize beauty, efficiency and functionality while minimizing or eliminating adverse impact on the environment.” And this leads on to the next, potentially groundbreaking benefit blockchain technology could bring to the construction industry – ensuring provenance.

Ethical and cost-effective

Contractors today are under increasing pressure to ensure their projects are clean, ethical and above-board.

With blockchain platforms in place, potential customers could “instantly check that projects are not assembled using child or forced labor.” And it is not just workforces that would be subjected to this stringent level of scrutiny. Used correctly, blockchain systems could allow the same watertight auditing for off-site facilities and construction timekeeping. They could even help verify the sustainability of the materials that contractors use.

Indeed, the ability to cut costs without compromising on labor practices or sourcing materials from unethical suppliers is perhaps the biggest conceivable benefit of incorporating blockchain.

Real-world project managers are starting to put this theory to the test. A Texas-based contractor has recently teamed up with a team of Chinese experts to launch a blockchain-powered funding platform, which the contactor claims will allow it to realize its goal “of bringing affordable homes to more families in North America.”

A company named Intelliwave Technologies, meanwhile, claims it is now using blockchain technology to achieve yet further above-board cost-reductions for construction transactions. Its SiteSense platform, it says, lessens the workload on project workers by reducing the amount of manual work required to log transactions.

For real estate customers, blockchain could prove very cost-effective indeed, virtually eliminating the need for third-party verification via escrow and title specialists, and saving them up to two percent of the total cost of buying a property.

Easing in the age of IoT

Possibly the most exciting new usage for blockchain technology in construction is as a catalyst for the safe introduction of IoT and similar advances.

Construction machine manufacturers like Caterpillar are already making IoT-enabled products, but blockchain could provide a way to integrate such innovations smoothly. Described by some as the “ultimate construction tracker,” blockchain-powered platforms (at least in theory) have the ability to ensure IoT data stays safe and cannot be tampered with in the future.

Builders can now use IoT-based platforms to identify problems or help speed up the construction process. Using sophisticated sensors, for example, workers can receive mobile push alerts when the concrete they have laid has dried, or get notified when on-site temperature or humidity levels rise or fall. If managed with blockchain-powered systems, all this data and more would be safeguarded, tamper-proof and accessible to multiple stakeholders, including building regulators and clients.

Not-so-distant developments?

Most constructors are still a very long way off from using blockchain on their projects. Even optimistic analysts admit that the technology is “mostly out of reach for independent construction companies at this stage.”

However, pilots are underway, and a select few pioneers are starting to look for realistsic ways to incorporate blockchain technology in 2017. More importantly, big multinationals are starting to produce white papers on the technology – while many IT service providers are looking at ways they can tailor their blockchain offerings to the construction industry.

Wide-scale integration remains a way off, but blockchain’s huge potential is appealing to both constructors and IT experts. As the era of IoT, advanced BIM and smart contracts begins to dawn, perhaps blockchain’s benefits will become indispensible to the industry much faster than first expected.

Featured image from pexels

The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.

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