Think blockchain and you probably think Bitcoin or cryptocurrency. Blockchain is the platform which cryptocurrencies are based on and as unlikely as it may seem, the platform is ripe for the picking in the construction industry.
BIM (Building Information Modelling) is being touted as the process that’ll be the first to benefit from blockchain. But to understand how, we have to understand what blockchain is and what value it has in construction.
What is blockchain?
Blockchain is a decentralised ledger technology which runs off a network of computers that jointly manage a database. The blockchain is visible to everyone who participates in using it and all transactions are logged and stored in an ever-growing chain, hence the apt name ‘blockchain’. Put simply, Blockchain is based on peer-to-peer technology grouped with electronic signature data. By design, blockchain is never in one location with one central control (unlike the banks main serves for example) there’s no one location for a hacker to exploit.
Amongst all the madness and confusion with the Government’s mandate of BIM Level 2, Blockchains peer-to-peer technology will hopefully bring the architectural, engineering and construction industry into the future. Could this even be the start of BIM level 3…?
Nevertheless, Blockchain technology is changing and shaping the world as we know it, whether that be the transition of currency or the transparency of information, BIM is slowly moving into the fast lane of coordinated data sharing.
How does this relate to construction?
The key benefit of Blockchain in construction is streamlined contract processing.
Blockchain can help construction companies save money by removing the intermediaries involved in contract processing. This reduces data/ information hiccups and speeds up payments, streamlining the process to save money and increase productivity.
BIM gives architecture, engineering, and construction (AEC) workers a structured process for the planning, design and construction of buildings and infrastructure, but payments are a drag and there’s a serious wad of paperwork involved.
Blockchain could eradicate paperwork entirely with something called a smart contract. A smart contract gets the contractor paid immediately on work completion, automatically, without invoicing or payment submission.
For example, if a main contractor completes all their current tasks, on time and within, or on budget, this information can be verified within the blockchain for all users to comment on and agree. Once verified and agreed by all parties, this information is then automatically logged to all parties involved. From here, a mutually agreed certificate of payment is authorised to the main contractor which in-turn provides the end client with a continuing series of data updates for to the projects progress.
What this boils down to is very simple: blockchain has value in construction because it introduces automation and reduces admin and financial processes. These are known to slow construction projects down to a snail’s pace. Blockchain would be the first technology of its kind to step in, take the reins, and revolutionise these processes.