Even though the blockchain has been consistently linked with cryptocurrency, the benefits of this public ledger extend far beyond Bitcoin and Ethereum. The truth is that there are plenty of industries investigating how they can apply the technology to their own endeavors—and they’re coming up with some very promising results.
The construction industry is not well known for changing with the times, but it’s made some impressive strides in the past few years. Considering just how much documentation is necessary on the job, it’s time to see if the blockchain can help things run more efficiently.
Underlying Technology
People who have never even seen a line of code can still understand the basics of the blockchain. This decentralized ledger records bits of data and then hides that data from anyone who would use it for their own gain. Theoretically, systems are supposed to do this already, but anyone who’s had a fraudulent credit card charge can attest to that fact that current systems just aren’t cutting it.
The blockchain can give builders the information they need to make better decisions on how and where to build. It can also facilitate money transfers, increase communication and encourage more collaboration between companies.
Smart Contracts
A blockchain is built primarily on smart contracts, which are a series of if/then scenarios that leaders can use to ensure all parts of the project are being completed according to protocol. So if a subcontractor has to paint certain rooms, they’ll only be able to commence with the task as long as the drywall has been hung up and inspected by the appropriate parties. If the right person hasn’t signed off on the drywall, then the painter knows they have to wait.
The blockchain helps ensure documentation is airtight, meaning no employee can go back in and alter the blockchain at any time. Essentially, the painter wouldn’t be able to claim they thought the inspector had already finished their job because everything would be time-stamped in black and white. The blockchain is particularly perfect for complicated supply chains that may not always be followed by all employees.
A Helping Hand
The blockchain won’t make anyone better at what their actual job, but it can speed up the rate of projects by quickly providing people with missing data. Every company and project has some version of this type of documentation, but considering the number of labor disputes, delivery errors and miscommunication on building sites, it’s clear that the construction industry could benefit from something more official and less corruptible.
The blockchain can even be integrated into building maintenance after a project is completed. So if an investor rents out the property and hires caretakers to do maintenance, there’s a way to keep up with the state of the property. It is believed that consumer demand for the blockchain will only rise because it provides complete transparency—something clients routinely complain they never receive.
Removing the MiddleMan
All construction companies have to deal with (and pay for) middlemen who may do everything from process payments to manage trust funds. The blockchain has the potential to eliminate the need for middlemen by providing proof of all transactions. Lien disputes, insurance payments and invoices can be streamlined to quickly and accurately meet the deadlines and requirements of the project.
If materials are delivered to a site and immediately paid for on reception, a smart contract would automatically alert the supplier to their next task. Supplier payments can be staggered based on when the materials have left the premises and when they’re delivered to the site. It makes the transfer of liability simple too, so the shipper will be the one to take responsibility if something happens to those materials during transit instead of the buyer.
Reputations and Collaborations
With more and more buildings being constructed using BIM, construction workers need a way to keep track of the many changes that may arise in a project. Whether the buyer wants the color of the paint changed or they decide they want three rooms instead of four, companies need a way to quickly adapt to new objectives.
The blockchain can be exactly what they need to stay on schedule and even to increase the amount of collaboration across the industry. It makes it easy to verify the identity of those a builder may choose to work with, even if the two entities have no prior experience together. The blockchain can inadvertently help people form partnerships and share ideas that they may never have considered before.
While this technology is still largely unknown to the average person on the street, it seems clear the blockchain has a place in the construction industry. There are simply too many moving pieces to discount the importance of proper organization and documentation of each task completed on a project. Builders that can adapt the protocol (or at least learn more about it) will be that much more prepared when the technology goes from being the exception to the rule.
