The world is evolving at a rapid pace. Never before we have witnessed so many changes happening in a such short period of time. Economic, social, technological and political shifts are reshaping the world very quickly and new challenges arise for nations and particularly for cities. As governments are seeking to incorporate innovations within their cities, blockchain can offer something more.
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Global trends
Cities count for more than half of the world’s GDP thus are deeply concerned by global shifts and have to take in consideration every changes in order to become a better place to live and offer a wide but successful range of innovative services to its citizens_._ One of these changes is urbanization that has been accelerating in the last 15 years. According to the World Bank, more than 54% of the global population now lives in cities.
This phenomenon leads to a deep transformation: important demographic and social changes. Indeed, population is continuously growing with a part of the elderly dangerously high. Today, 9% of the population is above 65 years old. With 2030 at the corner we’ll reach 8.5 billion people: 1960’s baby-boomers will definitely make that elder category a matter.
The way we live today has also a terrible impact on the environment. Climate change is a true concern and resource scarcity has been identified as a global trend by the World Economic Forum.
But the most evident shift is the technological breakthrough that impacts in every aspect the global economy. Corporations are spending more and more money in R&D (some of them almost 14% of their turnover) as they identified innovation as an important key growth driver. Technologies have invaded our everyday life, making it more connected and faster than ever before. Every industry has been impacted by new production cycles, by new ways of consuming, by ubiquitous technologies and relentless communication between people, all of them triggered by disruptive innovations.
Due to these global shifts (urbanization, demographic changes, environmental issues and technological progress) making cities smarter has been a challenge for governments to offset the negative consequences and take the most out of these changes. Since cities are the primary environment for a nation’s development, making them smarter, more collaborative, more inclusive, more sustainable and more connected is an utmost goal in order to provide better services and a high quality of living for the citizens.
What is a smart city ?
Techopedia.com defines a smart city in these words: “A smart city is a designation given to a city that incorporates information and communication technologies (ICT) to enhance the quality and performance of urban services such as energy, transportation and utilities in order to reduce resource consumption, wastage and overall costs”. Put simply, it is a city using technology to enhance liveability.
“A smart city is an implementation of an advanced and modern urbanization vision” — Rakesh Kaul, Partner at PwC
Smart cities allow operational efficiencies, maximize environmental sustainability efforts and create new citizen services. Smart cities can become an enabler to counter downsides of urbanization and demographic explosion that impact the environment. Indeed, the ever increasing population jeopardize the basic needs such as a clean habitat, water, energy and infrastructure.
Pilots and projects undertook
We have seen initiatives across the globe to develop such kind of cities. India, the second most populated country in the world, therefore very affected by this topic has launched in 2015 its Smart Cities Mission aiming to develop 100 smart cities in the country. This five years program will cost $29.9 billion USD and is intended to promote sustainable and inclusive urban development that would match and secure India’s cities expected growth rate. To make this happen, a lot of use cases have been thought of. From medical services to transportation, every cities will have to improve its services and face urban challenges such as shortage of power, insufficient water supply, unaffordable cost of living, inadequate public transportation, and pollution.
Smart cities have to rethink the way they manage the ecosystem to provide better support and increase the quality of living.
The following areas can be enhanced to make a city smarter:
- Citizen identities management and citizen participation
- Payment system between people and organization
- Employment
- Health
- Culture
- Transportation
- Environment and space
- Energy and waste
- Land management
But concretely, if you had all the authority and unlimited resources to change your city, what would you do?
Several pilots have been conducted in some places:
👶 — Myanmar government partnered with Telenor to overcome laborious birth and death recordings by launching a civil registration system in which is integrated a platform updated by several authorized parties when birth and death of Myanmar’s citizens occur.
🏥 — In general, the healthcare system is a very complex structure with lots of actors and sharp ethics issues, thus a field where innovation can trigger some changes and make considerable gains in time and efforts. Remote patient monitoring with sensors can, as one example, detect blood and glucose levels in patients, and send the resulting data to doctors for analysis and prognosis. Healthcare professionals can analyze all of the data collected by sensors to prescribe highly personalized treatments and medications for patients. You may even be able to 3D print your pill to take at home with no interference at all to your day-to-day routine. This example will soon be experienced is the new innovation-driven health hub currently being built in Dubai. Tons of medical services powered by AI or 3D printing will be provided to patients from all over the world.
🚋 — With huge amount of data collected on citizens’ movements and travel, the transportation system could be improved so that it would match the population needs in terms of routes and schedules. Powered with big data, transportation optimization is not so far-fetched. The Joint Transportation Management Center based in New York (the largest transportation center in North America) is using hundreds of cameras, vehicle detectors and advisory radios to manage congestion on expressways, predict incidents, strengthen on-the-spot intervention and reduce delays.
Basically, thanks to innovation, anything can be transformed into a more efficient manner. With new enablers and tools like Internet of Things, 3D printing, big data, connected devices and wearables it is more easy for cities to transform themselves.
But one enabler can bring out something more: blockchain.
Blockchain goes hand in hand with the smart city concept
Think about it, in the 3 aforementioned use cases realized in Myanmar, Dubai and New York, several common characteristics emerge:
✔️ Data is shared between multiple parties
✔️ Data is updated by multiple parties
✔️ Data is centralized
✔️ There are requirements for verification
The internet has already brought a lot of possibilities for cities to become more efficient, moving manual services to digital services and storing information paperless. And although the use cases listed above are very effective for a smart city, one feature can be added to make it smarter. A feature which would bring decentralization and which would erase intermediaries. Above all, a feature that would bring security among the systems and interoperability between them. You have guessed, this feature is blockchain.
Blockchain, as a reminder, is a secured, distributed and decentralized database that multiple parties share transparently to ensure accuracy of information with no risk of alteration or clearance of the database.
Since blockchain is a pretty new technology, governments might not have seen yet the potential it can provide when building smart cities. It is indeed a new tool to help them secure and deal with information and transactions. Also, blockchain can decrease the risk of systemic issues related to data security, inefficiency, lack of transparency and corruption that will become more frequent in the digital age.
Governments that have taken the lead
Some governments have pioneered blockchain application and proved how powerful, cost-effective and timesaving they are.
Estonia 💊 : For this 1.3 million resident country, data integrity in medical records is critical. The Estonian E-Health foundation launched a project aiming to secure and store all patient health records and archive related activity logs. Estonia becomes the first country to implement blockchain for healthcare at a national scale.
United Arab Emirates 🏛: The UAE vice president announced that by 2021, 50% of the government’s transaction will be achieved through a blockchain, thus saving time and resources. The first step was taken by the Dubai Department of Finance who recently launched a blockchain-powered payment system intending to provide a more accurate and transparent governance process, as well as to enable real-time payments within and between government structures.
Sweden 🏡 : After 2 years of testing, the Swedish land-ownership authority has conducted a successful test between individuals to buy and sell properties through a specific blockchain. They are now working on scaling this pilot to a national production.
Smart Cities’ future looks bright
As you can imagine, we are still in the very early-stages of blockchain applications development. As stated by Gartner in their 2018 Market Guide for Blockchain, most organizations are in the discovery phase and experimentation with the aim of proving the viability of its use in their businesses. It goes the same for governments and smart cities.
While an extensive list of use cases can be thought of, a true implementation with a scaled, up-and-working application is quite hard to achieve.
Thus before technological progress will help solve in the coming years the scalability and interoperability problems usually encountered to move from a Proof of Concept to a full live production, governments have been thinking to a lot of applications. Let’s review some of them.
Voting system 📑
Citizen participation and more specifically the voting system is a perfect example of what blockchain can upgrade. The current system is too obsolete with numerous intermediaries and a high risk of corruption. By implementing a blockchain, thus a decentralized database, where each identifier would match a specific citizen, we could ensure that one person can vote securely, anonymously and uniquely. And we could think of it not only for big state decisions but for any development that can be brought to the city (for example a decision to build the local football stadium submitted only to the citizens of the concerned neighborhood). Moreover, we could encourage the citizen to participate in this civic life by incentivizing them thanks to a reward platform on which they could be offered specific services in return for their involvement.
Traceability of medicines 🏳
One specific hurdle (among much others) in the health system can be enhance with blockchain: the supervision of medicines. Blockchain can achieve the control of an efficient drug supply chain that would reduce illegal use of certain medicines and monitor the pharmacies stocks in real-time.
Education 🎖
Universities, colleges, high school and academies share a lot of information, sometimes inaccurate, on students. Processes are very centralized, increasing the risk that someone falsifies an information. A common ledger between all these stakeholders secured by a blockchain would ensure trustworthiness of the diploma and the educational cursus. As a sensitive information, it would only be shared to the authorized stakeholders thanks to a blockchain-based verification process.
Food and agriculture 🍴
From the farmer’s field to the consumer’s mouth, food is travelling a long way. Consumers complain more and more about the lack of information on the provenance of the food they eat. The need for a more transparent producer-to-consumer system is amplifying. Blockchain could enable a food supply chain entirely verified by authorized entities that would update adequate information in the database. If a sanitary problem occurs, it would be easier to locate where it comes from. If there is a flaw in the process, supervisory authorities could distinguish quickly the reasons of this flaw. For instance Walmart, Nestlé, Unilever and seven other companies has partnered with IBM to develop The Food Trust blockchain to improve the companies’ ability to identify issues involved with food recalls, such as tracing outbreaks more quickly to limit customer risk.
Energy ⚡️
The world’s energy grids get smarter and a new paradigm arises, where the passive user becomes an active producer and consumer. Distributed energy resources combined with smart microgrids provide an intelligent production and energy transfer within a community. Blockchain can play an active role in securing transactions between “prosumers”. Imagine an exchange platform where households and individuals could exchange their surplus of energy within a trading token-based system where the token serves as a mean of payment. The more electricity you produce and share, the more tokens you have. And as a sole consumer you get the advantage to pay only for what you consume. All of it being empowered by a secured, transparent and decentralized blockchain. That is exactly what a neighborhood in Bangkok is currently achieving. The system of this pilot allows 635 KW of energy to be traded through a platform between residents and across Bangkok’s grid.
Employment ✒️
One good feature of the employment system nowadays is that it’s very decentralized. The problem is that there is a lack of confidence among job seekers and companies. The perfect match between them is often hard to carry out and there is a lot of business around head hunting and recruitment. Currently, when HR firms review resumes presented by prospective employees they have no way of knowing if its contents are valid. A secured and transparent registry containing all citizens’ past experiences and skills could facilitate the job search. Of course, information would be stored safely and provided to authorized employers. Blockchain technology is effective at establishing accurate records in a distributed system not controlled by any one entity.
Insurance 🆘
How many papers are there to fill when you get sick? How many parties should you share your data with? The health system is quite a maze for patients, practicioners, insurances and pharmacies. Imagine that anybody could insure anything for any time. For instance, you could buy an insurance for any delay that your next flight may have. Blockchain-based smart contrats allow people to do just that. With an “IF/THEN” setting, smart contracts guarantee the outcome if the stated condition is met. If the flight is delayed, then you get a refund. Axa’s application Fizzy is the realization of this example: «Fizzy is a fresh new genre in insurance. It offers direct, automatic compensation to policyholders whose flights are delayed. If your plane is more than two hours late, fizzy will reimburse you immediately.”
Conclusion
Smart cities uses technology and infrastructure (systems, IT, physical, social and business) to provide higher quality of living for residents, good environment for businesses development, optimization of resource utilization and transparency for government. These goals can be outperformed with the use of blockchain that acts as a tool for decentralized and distributed ecosystems. The security and transparency provided by blockchain empower all smart cities’ use cases relying on shared information, common database upgrading, information verification and decentralized feature.
We’re at the dawn of equipping our cities with smart devices and technologies that’ll improve services, amenities and life living. India, UAE and the US are probably the most advanced country on the topic but we’ll see further development across the globe as economic, political, social and environmental shifts are inevitable.