Over the past several months, blockchains and block-chaining have made international news. Block-chaining is used in cryptocurrency or digital currency. Currently, the healthcare industry is looking into ways to use block-chaining in the access and creation of healthcare records. Blockchain and the construction industry are natural partners in this technological revolution.
What is a Blockchain?
A blockchain is a digital ledger that stores transaction data chronologically and publically. Each transaction is a block, with each new transaction the block is added to other blocks. This creates a chain of blocks. It was first introduced with bitcoin. One of the benefits of block-chaining is that it, in theory, prevents fraud or misrepresentation of the numbers. Any changes to an original block require that change to pass inspection by all other blocks on the chain. And any changes are made through the addition of a block.
Where Blockchain Fits in Construction?
Projects typically involve an owner, the architect, engineers, a general contractor, subcontractors, and suppliers. The owner holds contracts with some of the participants, but not all. Businesses like the subcontractors and suppliers will hold contracts with the general contractor rather than with the owner.
With block-chaining, the owner would have a project wallet. The project funds can be stored in this wallet which is used to pay everyone who works on the project. Payments can be tied to steps, so when one step of the project is completed and inspected the payment would automatically transfer to the appropriate person. It would streamline all payments and processing into the product delivery. And with payments tied directly to work, it would be hard to deny payment.
Blockchain and the construction industry is a natural pairing since there are clear deliverables. By spreading the data out to several companies and computers, it makes all payments clear and helps hold different parties accountable. It also can create saved ids (identifications) which would help many subcontractors win more work. While block-chaining is new, it’s showing real progress, and newer iterations require less energy and are less intensive while keeping the same level of safety. It won’t be long until it’s used not just in construction, but healthcare, all finance, and more.