Although the construction industry is undergoing continuous growth and development, it is still a bit slower than other industries when it comes to embracing new technologies. It’s been quite a while since Blockchain technology has been developed; however, it still hasn’t been completely incorporated in the construction processes. Construction projects are becoming more complex due to requirements like fire door widths, comfortable temperature without adversely affecting the environment, escape route signage, and energy efficient utilities etc. Over the years, governments have also set minimum standards that require certification from approved individuals and companies. Because of these increasing complexities and standards, the industry is still facing issues with verification of the completion of compliant work. The Blockchain technology has been introduced in the construction industry as a solution to these problems. There are many questions for blockchain technology which might be answered by your general contractor calgary.
The potential impact of Blockchain technology on the construction industry is being discussed everywhere in the world and these discussions are getting more and more intense with every passing day. It is very true that this technology can help the industry in several ways if used correctly. However, there are still a few measures that need to be taken before the industry incorporates Blockchain in the construction processes.
Before we begin with the discussion on how Blockchain technology could affect construction, let’s have a quick insight into what it basically is:
What is Blockchain Technology?
The Blockchain technology for first introduced in 2008, as a result of the attempt for creating digital currency. It’s most representative example is the cryptocurrency called “Bitcoin”. Blockchain is basically a new way to record and store transactions. In other words, we could define this technology as a peer-to-peer distributed transactional database. It is a digital register where various types of agreements including contracts, and financial transactions etc. are recorded and verified as complete.
The main difference between Blockchain database and traditional database is that Blockchain doesn’t need a central authority. There is no intermediary institution or middleman, such as a lawyer to verify the terms and conditions of a contract or a bank for transferring money.
Blockchain database contains various types of information, which can categorized as:
- Ownership Certificates
- Evidence of bank’s fiscal transactions
- Authenticity statements.
What makes Blockchain database better than the traditional one is its highly secure way of data storage and exchange. In Blockchain, every piece of information is linked to the rest by a digital signature. This allows for a more secure and quick data exchange. In simpler words, it excludes the intermediary parties in transaction processes which take place between two individual members of the same peer-to-peer network.
How Blockchain Technology could Affect Construction
Blockchain technology is becoming increasingly popular due to its remarkable versatility. It has the potential to help construction companies in various ways and add more transparency to all the transactions and agreements involved in a construction project.
Here are some of the major reasons why adopting Blockchain technology could be highly beneficial for the construction industry:
- Smart Contracts
Construction usually involves many disputes majority of which are linked with payments. The Blockchain technology, in this case, could serve as a reliable contract administrator by offering its error-free database on which contracts would be built and managed.
Smart contracts are just digital protocols built within the Blockchain database in order to implement the terms and conditions of a contract. The nodes of the Blockchain network contain all the important information about the contract or agreement and other conditions that should be fulfilled for the completion of the contracts. With the help of smart contracts, construction industry can easily get rid of intermediary parties and carry out more direct transactions.
- Optimization of Workflow
The Blockchain technology can help enhance collaborative working and improve workflow. By encouraging transparency in construction processes, it can push the project team to perform better. Improved transparency means increased accountability and more control over the project. More transparent construction processes will ultimately lead to better alignment between the construction industry and clients while minimizing risks and disputes. Moreover, Blockchain technology has the potential to speed up the construction processes by delivering real-time updates about the project to all the concerned members and allowing for more data-driven decision making.