How Does Blockchain Technology's SMART CONTTRACTS Could Affect The Construction Industry?
With the exponential growth of knowledge and technology in today's generation it seems that Construction Industry is somehow a little bit left behind. Some of the cause of this might be a lot of builders or contractors are feared to embrace innovation or changing the way how they usually or comfortably do things. Although there are quite few inventions that could help the construction process fasten its progress but only few were capable of integrating them within their companies or system, for example ***Laser Scanning Point Cloud*** which could help the surveying phase a lot more efficient that the traditional one. Some more examples are the softwares that helps engineers, architects or designers to design and plan the building itself and manage the design and construction process much efficient than ever. What I'm trying to point out is that this inventions are all good but it could turn from good to great with the intervention of the ***Blockchain Technology*** which would be the main topic of this article.
Potential Uses Of Blockchain In Construction Industry
Construction brings together large teams to design and shape the built environment. With technology and in particular Building Information Modeling (BIM) becoming more widespread, openness to collaboration and new ideas is increasing across the industry. This momentum could be leveraged to bring the use of Blockchain technology to the fore.
Blockchain is hailed even in this era of exponential growth of technology not only because it can secures data chronoligically through a decentralized database but the mere concept of it amazes me. Big companies who uses and incorporating the blockchain technology are multiplying in numbers as time flows by. If I would define ***efficient*** it is completing the task faster along with quality in it and that statement alone means you could also do things with lower cost right? In our country or I think even most part of the globe transactions between contractors to suppliers and contractors to clients is still traditional or what we have used to encounter or witnessed for a large part of the recent history. And again it is because of the fear that it could greatly affect their system and might lead to a failure, well that kind of fear is pretty common to a large percentage of human beings. As a civil engineer myself I'm excited how blockchain would play out in the long term and how can it affect more the economy that said let's continue to the main agenda.
SMART CONTRACTS COULD PLAY A MAJOR ROLE
One of the potential aspects or part of the blockchain that could make things faster or as I redundantly mentioned "e-ffi-ci-ent" in the construction industry is none other than ***Smart Contracts***. Smart Contracts is one of the best characteristics that we love about the blockchain. It nullifies or cancel out the need for mediators slash intermediaries slash middlemen which is more secure, much safer and saves you a"LOT" of time and money.
The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations.
If Smart Contracts runs through a computer programme and it is describe through the if/then principle then it would really be a big help in the construction industry. Take for example ***if*** the contractor or builder finished the construction of a certain phase the building ***then*** he will request for it to be inspected. ***If*** the Inspector/Client or whoever the person that is responsible for inspecting the work approves ***then*** the contractor gets paid. This could also be use in supplier(construction supply) and builder relationship which again doesn't need a third party to exchange materials with money. Again ***if/then*** scenarios could be effective and efficient again for example delivering the necessary supplies right from supplier down to the client(builder). If the client pays the initial payment then the shipping starts and after the materials were delivered in the site then the supplier received another portion of the payment, now if the client commisioned after installing the materials delivered then the supplier received all remaining balance.
All these stages can be stored on the Blockchain and provide more opportunity for direct transactions without the need for middlemen.
To effectively and efficiently build a structure could save even billions of dollars and smart contracts is one that could play a major role.
Image Sources: 1, 2, 3, 4
Sources/References: A, B
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