In the US, transport departments are looking at new forms of revenue to fund road building and maintenance as a combination of electric vehicles and more efficient vehicles is expected to see money from gasoline taxes decline over time.

One solution involves replacing gas taxes with a general toll based on where motorists have driven.

This, however, presents several challenges. Whilst many residents are OK with paying for roads according to how much they use, few wish to have transport departments track where they drive. Courtesy of cost considerations, placing traditional tolling booths across all roads is not realistic. That different roads are maintained by states, cities and individual municipalities complicates matters further.

Now, a pilot project using blockchain hopes to address these issues. Under the program, data from mobile phones is being used to determine where individual vehicles travelled and how much they should pay. Rather than provide information about specific journeys, however, different agencies across states, cities and local municipalities receive an aggregated report about how many kilometres particular vehicles have travelled on certain categories of road and how much revenue each jurisdiction should receive.

According to Terry Walters, a technology evangelist in the United States and co-founder of startup Adequate Systems, this is one example of how blockchain technology will impact business and cities around the world.

Speaking at the Year in Infrastructure Conference hosted by engineering software provider Bentley Systems in Singapore last October, Walters outlined several examples showing how blockchain might be applied across industries including construction. Whilst his examples relate to America, Walters stresses that similar concepts could apply worldwide.

When it comes to blockchain, Walters stresses that understanding how the technology works at a technical level is not important. Many people do not understand the Transmission Control Protocol (TCP) or the Internet Protocol (IP) yet readily use the internet and understand its impact.

With blockchain, he says two features are important.

First, blockchain is a digital ledger. It involves individual chunks of data known as blocks which are mathematically linked together in such a way that each block is tied with prior blocks in an arrangement which forms a chain.

Because of how blocks are linked together, all data within the chain is validated against other data within that chain in a manner which ensures the chain’s integrity. Thus if data within any block is faked or falsified, this will be found out as it will not validate against other data within the chain.

As well, courtesy of the way the blocks are linked together, the blockchain is an appendable database. This means individual records cannot be changed but rather must be appended.

Second, blockchain is a protocol or a set of instructions. These can be loaded on one or many computers each of which runs the same set of code to interact with the blockchain in a decentralised manner.

When understanding how this works at a practical level, a useful explanation was given several years ago by Turner & Townsend associate director Rogier Roelvink, who performed research to identify blockchain uses in facilities management.

Roelvink describes the technology as a chain which holds information to which new records can be added incrementally to create complete records of particular events.

To illustrate, he points to an example of payments to a cleaning contractor. In this hypothetical example, seven ‘blocks’ of information are used. These include information which verifies that the cleaner held the necessary qualifications (block 1); the cleaner was employed by the contractor (block 2); the cleaner passed security checks (block 3); the cleaner attended work (block 4); standards of cleanliness were met (block 5); and that the cleaning company had paid the cleaner (block 6). Combined, these blocks create the prerequisite standards and checks for the building owner to pay the cleaning company (block 7). All this would be verified using stores of records at various stages in the process. These records include certificates of training completion, employment contracts, company HR records, tax office records, criminal record checks, security records, CCTV, supervisor inspections of work quality and bank transfers of payment between the cleaning company and the cleaner (refer article for a detailed illustration of how this works).

A real Australian example, meanwhile, can be seen through the trial of an app which used blockchain technology to help manage payments made under the National Disability Insurance Scheme (NDIS). As things stand, NDIS plans involve several budgets with different spending rules and limits for items such as core supports, capital supports (e.g. stair rails) and daily capacity building activities. Under the trail of an app involving CSIRO, Data 61 and the Commonwealth Bank, these budgets were converted into blockchain tokens which automatically understood and knew whether they have either been spent, were committed to future services or were available for new service bookings. The system made the tokens smart by attaching smart contracts which inform the tokens who they can be spent by, what services they can be spent on and which parties are eligible to deliver the services.

Such an arrangement delivered several benefits. Participants were afforded greater flexibility to select services/goods which are best matched to their needs, increased visibility over the cost of the services and the automation of payments as services are accessed. For the government, the arrangement prevented overspending or misspending of funds whilst delivering greater participant choice. For NDIS service providers, integration with a payments platform set up for the trial enabled payment to be received in seconds.

As mentioned, above, Walters in his presentation talked of several use cases for blockchain using examples from the US.

One example is smart contracts. Here, blocks within the blockchain can be programmed to look at other values within the chain and can automate decisions and actions based on the rules which have been written in to the blockchain.

Both the cleaning contract and the NDIS cases referred to above are examples of this. In the former case, the blockchain can be programmed to create an automatic payment to the cleaning company once earlier stages of the blockchain verify that the standards of cleanliness have been met and that cleaning staff had been paid. In the NDIS example, the blockchain was programmed to automatically enable participants to spend money (and providers to automatically receive payment) where earlier stages of the blockchain determined that service providers were approved and where the expenditure fell within the defined parameters of the individual’s plan.

In another example in the US, Walker talks of a special insurance policy under which holders receive automatic payouts under certain circumstances where flights are cancelled or delayed. Where the network detects that delays have occurred, the system checks the reason (mechanical issues etc.) and processes automatic payments to those whose policies provide cover for delays associated with the particular reason concerned.

In construction, Walker says blockchain can be used to track the providence of materials.

In the US, the Surface Transportation Assistance Act of 1982 requires iron, steel and manufactured products which are used on projects on which federal money has been spent to be sourced from within the country. In theory, this is tracked via a receipt number on a pour of steel that is supposed to track the steel from its original pour to its use as rebar. Traditionally, much of this has happened via paperwork, which has been entered into a digital database.

According to Walters, however, the process in many cases has simply been rubber stamped and there is a lack of accountability in the system.

Using digital ledger technology, everyone who touches the steel will be able to write their actions into the blockchain. This includes the manufacturer and anyone who converts it into rebar along with anyone who transports or uses it. When it shows up as rebar in the field, field personnel will be able to use a mobile application to see its history tracked back to the point of manufacture. This not only eliminates paper processes but offers a transparent means through which providence can be traced.

Another area is logistics. Here, Walters says several organisations in the transport sector are working on a standard to help operators move to blockchain.

According to Walters, merchandise going from manufacturers to consumers passes through several hands in a process which is supported by networks which involve hundreds of entities. Many of these are small players (average of fourteen employees) who each work on their own internal systems and whose interest in the goods is limited to a narrow time period. Few have the scale or resources to maintain overall databases to track products from conception to delivery.

Were this to be put on a blockchain, various operators could be given access via a mobile app for the point of time in which they would need to write to the blockchain and the entire process could be speeded up and automated. Not only would this create traceability through the supply chain, It would eliminate paper systems and speed up payment times.

Another area is titles and records. Here, Walters says numerous companies are looking at blockchain to register the sales of dealer vehicles with the Department of Motor Vehicles (in the US). As things stand, dealers are reluctant to move to a computerised system amid concerns that other dealers will be able to view their performance. Using blockchain, however, this information will be provided in a de-identified manner.

More Powerful When Added to IoT and Digital Twins

According to Walters, Blockchain will be especially powerful when combined with other technologies such as the Internet of Things (IoT) and digital twins.

On the first point, sensor technology or mobile phone tracking can be combined with blockchain to create traceable records of people, equipment and materials. On a construction site, data from sensors could be combined with the blockchain to identify the location of stockpiled materials or that of particular equipment which is used on multiple sites.

With construction staff, meanwhile, the movements and location of workers could be tracked using mobile phones or wearable devices and linked to a blockchain to determine where particular people have been at different times. This is especially useful on large projects where several hundred people could be on site at various times.

It could be used for billing purposes to verify that subcontractor personnel or labour hire personnel were in fact on site for hours which have been billed. It could also be invaluable in the event of a building collapse or site accident to identify who was where at the time of the incident and whether they are safe or potentially needed help.

All this is going to be easier to contextualise, meanwhile, when combined with digital twins. Often with data and databases, Walters says, making sense of information in a manner which is intuitive and comprehensible is difficult. With digital twins, however, streams of data can be more easily contextualised. Airports, for instance, will be able to create entire representations of their facilities and track where the movement and locations are aircraft, people and vehicles in real-time and view this on a 3D model.

As things stand, blockchain is in its infancy.

Going forward, its impact upon business, cities and construction will be significant.