There was an urgent need for a secure ‘digital’ ledger for owners and operators in the construction industry that provides ease in the supply chain, paperwork, building components, etc. Blockchain was the answer to all this! It is a decentralized and tamper-proof digital ledger of transactions that can create, validate and audit contracts or agreements in real-time without third-party intervention.
This technology was first encountered in 2009 along with the launch of Bitcoin and was the ultimate answer for many people who asked ‘How to create a digital asset that cannot be copied?’. This technology allows two or more parties to transfer monetary and other representation of value, exchange information, run smart contracts such that it doesn’t have to rely on a third-party representative like banks, private companies, or notaries.
Blockchains, if implemented correctly, can bring greater transparency and efficiency in the construction industry. In the life cycle of construction, this database is a solution to major challenges like reliability and integrity by eliminating intermediaries to attain success in the management and planning of the project.
To support my statement, let me present to you 5 revolutionary uses of blockchain that will be a game-changer. Hop down to know-how!
Building Information Modeling (BIM)
BIM and blockchain is a highly-effective combination but highly effective during the implementation of construction projects. Both can work together to enhance the effectiveness of smart contracts.
How BIM and blockchain is a highly-effective combination?
In the BIM process, the model itself is taken as a contract between the owner, the sub-contractor and the general contractor. Here, if the physical construction doesn’t match the 3D model, then the contract will be pulled out or needs to be fixed accordingly. Using BIM into smart contracts can help in building a project as per digital plans.
BIM and blockchain can bring transparency among the parties. It uses peer-to-peer networks for information sharing, but with blockchain, the updates are obtained in real-time. Access to constant monitoring and feedback enables better communication and improves the quality of work.
Automated contracts are the future of the construction industry and are said to reduce the requirement of middlemen, saving time, money and effort. Blockchain aids in updating and recording transactions, thus bringing transparency and ease of working efficiently. These lines of code that are stored in a blockchain execute when predetermined terms and conditions are fulfilled.
For instance, if a raw material was not delivered on time, then the blockchain will impose an appropriate action as per the predefined rules. This will resolve disputes and improve efficiency.
Supply Chain Management
It is defined as the systematic management of goods, services and all the processes involved in preparing the final product. There should be a continuous flow of material supply to keep the project going in good shape. If not, then be ready to face a grumpy owner who complains about poor productivity, cost overruns, etc.
Incorporating blockchain into the process will help in tracking all the items and raise voice as soon as the problem is detected. It keeps all the parties on the same page and infuses transparency throughout the project.
It uses digital-specific identifications to verify vendors, suppliers and sub-contractors before they’re hired. The technology also helps in growing the reputation of the individual
Construction projects work mostly on capital. Getting timely flow of payments is very essential and challenging too. Failure in paying on time can adversely affect the operations and can also lead to disputes. Blockchain is a savior here too.
It makes the payment process easier by increasing security and creating traceable information. With the help of its streamline payment processing, payments are received and transferred easily. The technology ensures that the suppliers and contractors are paid on time, which fosters good relationships.
Blockchain can portray the entire journey of carbon from its origin to purchase and retirement. Now, it is also a solution to the global challenges faced by the whole world. The construction sector produces a sustainable amount of carbon each year.
The members of the Paris Climate agreement have incorporated carbon credits to keep a check on carbon footprint. This is a certificate that allows a country to produce a certain amount of carbon emissions and can also be traded if the allowance is not used.
Looking forward to a ‘Bright’ Future of BLockchain
Blockchain tech is adopted and implemented by almost all sectors, be it, healthcare, banking, governance, technology and not to forget construction. Such advanced technologies give us a chance to look forward with effective and secured communication and also helps in preventing malicious acts during data transfer.
About The Guest Author:
George Webster has been serving as a civil and a structural engineer at Shah and Talati. She has acted as an arbitrator and mediator in many construction deals. She is a music lover and holds a keen interest in history and politics too.