From digital kiosks, to smart streetlights, to embedded sensors that alert people to available parking spaces, the Internet of Things (IoT) is transforming what it means to live in a city.
For its inhabitants, the benefits of a smart city are numerous: increased safety, improved infrastructure, more efficient energy usage, and reductions in congestion are all possible.
But where does blockchain come in? Below, we outline three reasons as to why a combination of blockchain and IoT technologies will transform urban planning.
Blockchain can secure data
By 2050, there will be over 50 billion “things” connected to the internet. The avalanche of data collected from these devices needs to remain organised and uncorrupted if it is to benefit companies and consumers. In the context of an interconnected urban environment, it is paramount that the data collected from IoT devices is accurate, secure, and reliable.
Blockchain has security embedded in its structure. It utilizes a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered without using a huge amount of computing power to override the entire network.
Blockchain can increase trust
The Estonian government started investing in blockchain technologies in 2008 – even before the whitepaper coining the term was written – and since 2012 blockchain has been used to protect national data, e-services, and smart devices in both the public and private sector.
Every Estonian citizen has their own digital identity that is secured by blockchain technology. They can use it to not only look at their healthcare, banking, and legal records, but they can see who has accessed that data and why.
An Estonian system applied to a city would increase the willingness of individuals to participate in a system that shares their data with urban planners. This will lead to smart cities become more robust, dynamic, and efficient.
Blockchain can boost local economies
While decentralized enterprises like Uber and Airbnb offer a local service while extracting the vast majority of profits elsewhere, blockchain technology allows for the flourishing of decentralized enterprises that are truly local – enterprises that reinvest back into the city.
For example, a blockchain based service called Arcade City came about after Uber was banned from operating in Austin, Texas. The drivers use the Ethereum blockchain to offer a transparent and trusted service.