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Blog: Blockchain and its Implementation in Construction

By Gregory Ceton, CSI, CDT posted 05-31-2018 14:02

  

By now, most people have heard of Bitcoin, the most notable current blockchain-based implementation; however, many do not realize that far beyond the realms of cryptocurrency, blockchain has the capacity to revolutionize the way the world does business.

Built on a framework comprised of encryption and distributed peer-to-peer sharing, the concept of blockchain is rather simple: a blockchain is a distributed ledger that contains a record of transactions or other content and provides a means to validate the content of those records without a centralized authority. In doing so, it presents a flattening of the sometimes-clumsy traditional processes that drive and underpin business and social relationships. Blockchain will change the terrain of many landscapes, from banking and accounting, to politics, to the production of goods—and the construction industry is no exception.

So, what is blockchain? Here is a short description of its key components:

- Encrypted “blocks” are created and added to a growing “chain.” The blocks contain information about transactions or other records, as   well as metadata that describes their relationship to other blocks in the chain.

- The blockchain is shared publicly among a group of online users (called “nodes”), so exact duplicates of the chain exist. This provides a mechanism to ensure validity and identify when one copy has become corrupted or changed—all without the need for a trusted authority to verify.

- The metadata mentioned above includes a set of two key factors to substantiate a block’s content has not been modified: a “hash” (a digital summary of all of the data in the block—essentially a digital fingerprint of a set of data) and a “nonce” (a random number that when combined with the current block’s content produces the expected hash of the block).

The elements of a blockchain

As the blockchain grows, the computing power required to change a block and make it appear valid in context of all other blocks expands. This continuous growth and the publicly shared nature of the blockchain makes it essentially impossible to change block contents, all without the need for an authority to verify change has not occurred.

So, what are the advantages for the construction industry? How can blockchain make building things easier, safer, and/or cheaper?

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Use in contracts

The most immediate application is the use of blockchain to verify contract contents. Blockchain is already being employed in this way by other industries. The advantage to doing so is that a contract placed in a blockchain at the time of agreement and signing eliminates the chance that either passage of time or negligent recordkeeping made contract originals and/or portions of a contract unavailable. This has evidentiary advantages and makes arguing about the validity of a contract copy as compared with another copy unnecessary.

As blockchains can successfully process transactions, this also introduces the possibility of a self-executing contract. Details such as contractor draws can be established within the contract, and contracted-for amounts can be provided at the time of request by simply authorizing this transfer within the blockchain. As the practice becomes more commonplace, implementation of self-executing contracts should streamline the contracting process.

Other contract documents

Specifications and building information modeling (BIM) software can also benefit from the validation provided by blockchain.

One of the biggest fears surrounding the use of BIM for code approval or as contract documents relates to the depth of information that can be contained within a BIM combined with its ability to be modified after being written; however, when both the BIM and accompanying specifications are stored in a blockchain, any review or potential changes will have a firm and final basis against which they can be checked. There will be no reason to wonder if “Project125_2018-10-12FINALpostreviewFINAL2.rvt” is the file that should be referenced; rather, there will be single sources of truth. This does not mean changes in project execution cannot be made; only that the project team will have easy consensus on the starting point in regards to a discussion of needed changes.

Representations made by product manufacturers is another area that will benefit from being stored in a blockchain. At CSI, we sometimes get contacted by law firms, looking for a copy of a long out-of-date product catalog or data sheet. Often, this is a piece of evidence firms are seeking as they try to reconstruct what representations may have been made to a design firm that led them to choose one technical solution over another.

If project manuals will be contained in the blockchain at the time they are final, it makes sense for specifiers to include working process documentation in another block. This might include notes of conversations with product representatives, catalogs and data sheets, e-mails and text messages exchanged, and any other information that supports the product decisions made. Inclusion of this type of information will make it easier for an arbitrator or mediator to determine whether or not the choice was supported by representations, which will more clearly establish liability.

Finally, as facility management and lifecycle activities often become contracted-for and carried out by third-party firms, decisions made during lifecycle (e.g. building system modification, space change or renovation, or more expansive modification of the building) can be accompanied by a breadcrumb trail of reasons for decisions taken that support actions—and all of this will be captured as lifecycle documentation in the blockchain. This will provide a strong basis for assessing the role of each project participant should anything resulting in liability occur, and will also provide a meaningful and valuable record of maintenance should an owner decide to sell or otherwise transfer the building.

These examples are, of course, not the only use cases likely to arise for blockchain in the construction industry; rather, they are some of the easily foreseeable uses that will likely benefit CSI members.

For more information on blockchain — as well as some nifty animated and scripted examples of mining and other related blockchain activity — check out this site authored by Anders Brownworth.

Greg Ceton, CSI, CDT, is CSI Director of Strategic Initiatives and Special Projects. He lives in the D.C. area and likes disruptive technology, good food, and cats.

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Comments

So you like "disruptive technology" who knew?

This is huge and certainly at odds with a substantial attorney's retirement fund (but they adapt well)

Thanks for "Kick-starting" my brain this morning, this is very intriguing