Blockchain and Construction
Date Posted: November 15, 2019
Posted In: Ideas,
From Constructech: Whether you’ve bought a Bitcoin or not, you have probably heard the term “blockchain.” A blockchain is a decentralized, distributed, and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks. In theory and by design, transactions on a blockchain are secure, both from hacking and from changes made to corrupt the initial data.
According to consulting firm KPMG, blockchain technology holds great promise for increased efficiency from transparent records and a single source of truth. By creating one version of a ledger, for example, that is synchronized across computers, blockchain can help eliminate out-of-sync ledgers and, therefore, the need for reconciliations.
In the world of construction, two elements can benefit from blockchain: contracts and supply chains. In the latter area, immutable records that are visible to everyone involved allows blockchain to improve data accuracy and security and show compliance through an audit trail. For example, when supply chain information is put on a blockchain, companies can potentially reduce fraud and errors, improve inventory management, identify issues more quickly, reduce delays from paperwork, and increase trust among all parties.
One of the biggest developments underpinned by blockchain technology has been that of smart contracts. A smart contract is essentially a computer code, which can self-execute as well as self-enforce the terms and conditions laid out in a legal agreement.
Due to the decentralized nature of blockchain, a smart contract can bypass expensive middlemen such as financial institutions and attorneys. In the commercial real estate industry, smart contracts are already being used to conduct property transactions such as buying, selling, leasing, and financing.