Blog / Leadership & Transformation

Blockchain and Smart Cities

26 experts from all over the world are participating in the preparation of the report "Blockchain for Cities" (B4C). Thanks to the contribution of these experts, their knowledge and experiences related to blockchain and its applications, the report will highlight the potential of the Blockchain to contribute to a more sustainable world.In the near future, this report will serve local authorities as an evaluation framework for the design of public policies related to this technology. In other words, "Blockchain for Cities" can be considered as a basic guide, destined to help cities determine the optimal solutions for applying this technology."United 4 Smart Sustainable Cities" (U4SSC) is a global platform to facilitate the transition towards smart and sustainable cities through the promotion of the use of ICTs. With the publication of the document "Blockchain for Cities" they hope to provide cities and communities with the information necessary to learn how this technology works and cover everything from protocols to standards and regulations. Previously published documentation on blockchain and its applications to the city will also be included in the report, where all the interested parties can consult use cases that are already being carried out, application methodologies and recommendations.Blockchain is often described as a collaborative ecosystem that has the potential to resolve trust issues between all the parties involved. It is a technology that offers us a decentralized and distributed database with encrypted documentation to share information in a secure manner. On the one hand, the use of distributed ledger technology increases the transparency of government actions, automates bureaucratic processes and brings citizens closer to their leaders, that way strengthening democracy in general.On the other hand, Blockchain can also help the population address the challenges of urbanization through better implementation of the smart cities framework. During the years to come, most of the bigger cities will have to start combining new technologies and advanced urban planning, reconsider their current energy and transportation management and develop a new business planning framework. Since the needs and requirements of each city are different, it is up to each of them to define the best technological solution. That is where Blockchain can play a role, as it can easily connect the necessary technologies together. By linking together multiple technologies, the smart city could begin to automate basic city services and through that process, the value can be derived. Smart cities are highly complex and highly interconnected, or in other words, a truly smart city cannot function without digital infrastructures that physically link together dispersed sensors, devices and machines that make up public systems and services, so they can exchange information in real time. And when it comes to that, blockchain’s distributed ledger technologies are the best for handling information. In what follows some of the possible uses of blockchain technologies at the local and national level for better implementation of smart city framework are set out:Using Blockchain we can create new incentives to motivate sustainable behavior. Thanks to different types of compensations, cities or governments can instigate the citizens to make better decisions for the environment. For example, suppose that the public transport of the city uses blockchain and each user has a wallet on the phone that he can use to pay for his trips. If you, as a citizen, decide that you will use public transportation this week instead of driving to work every day, the city will see this action. Thanks to an intelligent contract, the city can automatically give a reward for environmentally conscious behavior. This could result in a discount on next month's electricity bill, free public transportation during the weekend, or anything else the city deems appropriate to motivate citizens. Recently, Universal IDs have gained the attention of many governments. It certainly is attractive to think that universal IDs could help counter terrorism, increase national security, deter ID fraud and make the lives of citizens easier. Using the blockchain, identity information could be stored securely using cryptography. Another advantage of this technology is that it could give individuals more control over their data. For example, in Estonia the citizens can use their ID-cards as a proof of identification when logging into bank accounts, for digital signatures, for i-Voting, submit tax claims, to check medical records and use e-Prescriptions. All these e-services are protected by KSI (Keyless Signature Infrastructure) Blockchain technology. An easily accessible record of land and property usage rights would be extremely helpful for citizens and governments alike. For instance, in Haiti a large earthquake in 2010 destroyed or damaged numerous municipal buildings that stored country’s land title recording, creating confusion as to who held title to what. As a result, even years later many farmers don’t have a way to prove that they are the rightful landowners. Use of blockchain based property registries might prevent those problems in the future. Such an interoperable, blockchain-based system could also speed up all the processes related to the housing and land permits. Automation and interoperability of smart devices have been at the top of the technology agenda for a while now. In a truly smart home or work environment the interoperability of all the connected gadgets is vital, and with only very few users currently controlling their many devices from a single point, there is plenty of room for improvement. The blockchain represents a single platform upon which a very smart individual or company will create a secure, interoperable control system for the massive and growing web of smart devices. Over the past 20 years, public transit ridership has increased 26%, and as the objective of smart cities is to incentivize greater reliance on public transport, we are in need of new reliable and user-friendly solutions. The blockchain technologies have been proposed as a single point of payment for the various types of public transport. The uniformity of the platform would plausibly allow the user to pre-load funds on a card and pay for all the rides (bus, train, subway, ridesharing) on the same trip via a single transaction. Above all, smart cities prioritize renewable energy, conservative water usage, and pollution mitigation. Data about each of these could be stored on an interoperable, regularly updated record that helps the city to make wiser energy decisions. We could also create a more resilient power grid by using a blockchain powered p2p energy market. This allows individuals to create, buy, sell, and trade energy while retaining value and cut out the rent-seeking middleman. Smart cities prioritize everything local. If both essential and non-essential services are in close proximity to one’s residence or place of work, the means of travel promoted in smart cities (bikes, buses, ride sharing etc. basically everything except a private vehicle) become more attractive. Therefore, it is important to find new ways to promote local ownership over nationwide and chain brands. Blockchain-powered marketplace and platforms have the potential to challenge even the biggest E-commerce giants like Amazon or Ebay and help to tip the scales in favor of local businesses. Blockchain technologies could be the silver bullet needed to settle scalability, privacy, and reliability concerns in the Internet of Things. Blockchain’s decentralized approach would eliminate single points of failure, thus creating a more resilient ecosystem for the devices. Smart cities IT systems store a sheer amount of data, which would be a gold mine for any hacker. The effort and computing power required to overcome the hashing power securing a blockchain network makes it the best way to guard our precious data. The costs of data breach are huge for companies and governments alike. Not mentioning the trust issues it could create among the population. All the data collected and interlinked in smart cities (sensor data, smart grid data, smart vehicle data, etc.) has to be stored in a decentralized data hub. The blockchain serves as the only suitable option to provide both interoperability and security to a universal data storage platform catered to live in smart cities. Information on funding and grant details, municipal budget decisions, new taxes, etc. could be logged on the blockchain and made accessible to the population through wide apps. Thanks to a single source of secure, verified information we could eliminate much of the confusion and misinformation that arises from the current system of information disseminated via the internet.With blockchain technology, the administrative costs associated with urban planning could be reduced, which in turn translates into immense savings for cities. And ultimately blockchain technology could foster greater community participation, for instance, through secure, easily-accessible voting systems pertaining to urban and regional planning decisions. Already mentioned in the first point as one of the solutions behind the wide functions Estonian id-card offers to its holders, KSI Blockchain technology also protects Estonian e-services such as the e-Health Record, e-Prescription database, e-Law and e-Court systems, e-Police data, e-Banking, e-Business Register and e-Land Registry.

Cristina Aldomà


Zigurat Global Institute of Technology