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.
“The distributed ledger technology enables the design of tools which can help streamline processes in project development and the management system attached to it. Also, by eliminating the need for intermediaries or third parties, it can lead to a reduction in expenses and greater empowerment levels to any business.”
How Blockchain and the Construction Industry Would Work Together ?
The process of blockchain and the construction industry would boil down to roughly four steps: project modeling, smart contracts, inspection, and delivery. The first step in creating a project is modeling. Project modeling would show what the final project will look like, and it sets forth a clear path of what needs to be accomplished. Once this is complete, the smart contracts could be drawn up.The project wallet would be created, and individual blocks would be linked with payments to each step of the project model. This helps create the budget. It also helps with accountability. Funds are technically available since the money has been set aside for each step. This provides assurances for anyone working on the project that they will be paid.
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.