A smart city can be simply defined as “the effective integration of physical, digital and human systems in the built environment to deliver sustainable, prosperous and inclusive future for its citizens”. ~ The British Standard Institute.
Does blockchain matters when it comes to smart city development? If so, why?
While each city has a different vision for a smart, sustainable transformation, Blockchain has the potential to make the communities more collaborative and democratic.
Without transparency there won’t be shared prosperity. ~ Frederik Bussler, CEO BitGrit Inc
Imagine a smart city powered by data, artificial intelligence, and IoT.
If the city controls these means of production, then they control the value generation as well
If the city decides what to do with the data, AI, and IoT in an opaque system, then the citizens may not be helping good causes.
This is an authoritative system.
If we instead have citizens build the systems and set directions, then we have democracy.
Blockchain can be a way to account for contributions to AI systems, including data, computing power, and talent (code) provisions, while incentivizing good behavior
Blockchain In Smart Cities
How does blockchain play its role when it comes to smart city development?
There are at least 4 areas that blockchain can be used as part of the backbone technology for smart cities:
Reputation
One thing good about a well designed blockchain is its immutability instance. This makes it suitable to log things that could be useful in providing reputation, such as the ID of a person, a certification for education or quality assurance, and even asset ownership acknowledgement or devices identification as we are connecting more smart machines (big or small) through IoT.
We need to ensure that the other party we are interacting with are of good reputation and is genuine. For example, when we talk about connected vehicles or autonomous cars, or even the existing Firmware Over The Air (FOTA) updates, how can we ensure that hackers do not intercept in between and the firmware we are updating to our vehicles are originated from a genuine source?
Finance
Needless to say, the success of bitcoin and most of the alt-coins is a living example of how the blockchain technology can be used as a currency. The challenge now is to make it more stable so it fits the purpose as a medium of exchange as what most fiat money do well now.
Democracy
Another good use case leveraging the immutability of the blockchain is about the true democracy in our society or the city. We don’t need to have periodic votings and select our policy makers when it comes to matters related to the development or things that need to be done collaboratively through a democratic process.
Public voting can be executed via blockchain based system to decide on certain issues that affect certain communities in a certain area, if not the city as a whole. Every decision making process will become more transparent, real time, and theoretically, fair.
Energy
There has never been problem with resources, the problem lies within distribution. That was a good old saying pending a solution. With blockchain technology, a more liberalized energy market could be created. Peer to peer energy network can make the current centralized energy distribution model looks a bit autocratic and outdated in today’s world. The more efficient we transfer and distribute our energy sources, the closer we will be in reaching our greener goals.
From the successful implementation of smart grids starting with energy distribution, we could be finding more possibilities and opportunities to utilities and environmental related industry.
As such, I enclose this article for now. For further reading, check out
Blockchain Technologies: The Next Frontier of Smart Cities – Part 2 by Lily Maxwell posted in Bee Smart City on 20th August, 2018
Smart Cities and Blockchain: Four Countries Where AI and DLT Exist Hand-in-Hand by Julia Magas posted in Coin Telegraph on 17th June, 2018
Related Updates as at February 2019:
Finance and economic
Liberstad — a private, anarcho-capitalist city in Norway — has adopted a cryptocurrency native to its blockchain-powered smart city platform as its official medium of exchange, according to a press release published on Feb. 12.
South Korea’s leading telecommunications company, KT Corporation, has been selected to develop a local cryptocurrency in the South Korean city of Gimpo. The city plans to issue 11 billion won (over $9.7 million) worth of the currency per year, which includes budgets for various social services and development projects.
The Institute of Decentralized Economics (IDE) has opened in London, the United Kingdom on Feb. 14, 2019. The idea behind the IDE is to “help organizations better understand the economics that underlie the blockchain industry.” The IDE will also study the design and viability of stablecoins and how government policy and “crypto-economic” technologies interact.
Luxembourg lawmakers have passed bill 7363 into law, facilitating the use of blockchain technology in financial services, according to an official announcement published by the country’s parliament, the Chamber of Deputies, on Feb. 14.
The new law aims provide financial market participants with more transparency and legal certainty in regard to the circulation of securities with blockchain technology. The bill is also geared to make the transfer of securities more efficient by reducing the number of intermediaries.
Energy and Utilities
Dutch technology company ElaadNL has developed a Proof of Concept (PoC) for a smart power grid for electric vehicles using internet of things (IoT)-focused IOTA Tangle technology, according to the company’s announcement on Feb. 14, 2019.
Per the announcement, the PoC shows the ability of smart grids to not only consume power, but also generate it and autonomously redistribute it amongst community members. The initiative was based on IOTA’s Tangle technology, which purportedly lets the charging devices autonomously decide whether there is need to help balance grid load.
The global blockchain in energy utilities market was assessed to be $210.4 million in 2018, and is expected to reach $3.4 billion by 2024. Infoholic Research thus predicts the growth at a compound annual growth rate of 59.4 percent during the period from 2018 to 2024.
Tokenization of physical assets and the impact of IoT and AI
The European Union Blockchain Observatory and Forum released a report entitled “Tokenization of physical assets and the impact of IoT and AI” on April 10.
https://www.eublockchainforum.eu/sites/default/files/research-paper/convergence_of_blockchain_ai_and_iot_academic_2.pdf?width=1024&height=800&iframe=true
As reported by Coin Telegraph: https://cointelegraph.com/news/eu-blockchain-observatory-releases-report-on-tokenization-ai-and-iot
“From a cybersecurity perspective, AI technology is in the hands of both the good guys (white hats) and the bad guys (black hats). Companies are continuously collecting data about us from our cell phones, smart speakers, ubiquitous cameras, etc. and using AI to learn about our habits, objectives, and intentions through machine learning. While we should not be paranoid about big brother, we need public officials to demand transparency and accountability from technology companies that are trying to profit from personal data that is collected via smart city initiatives.”
https://cointelegraph.com/news/smart-cities-offer-promises-and-concerns-over-privacy