By now, most people have heard of Bitcoin, the most notable current blockchain-based implementation; however, many do not realize that far beyond the realms of cryptocurrency, blockchain has the capacity to revolutionize the way the world does business.
Built on a framework comprised of encryption and distributed peer-to-peer sharing, the concept of blockchain is rather simple: a blockchain is a distributed ledger that contains a record of transactions or other content and provides a means to validate the content of those records without a centralized authority. In doing so, it presents a flattening of the sometimes-clumsy traditional processes that drive and underpin business and social relationships. Blockchain will change the face of many landscapes, from banking and accounting, to politics, to the production of goods—and the construction industry is no exception.
So, what is blockchain? Here is a short description of its key components:
- Encrypted “blocks” are created and added to a growing “chain.” The blocks contain information about transactions or other records, as well as metadata that describes their relationship to other blocks in the chain.
- The blockchain is shared publicly among a group of online users (called “nodes”), so exact duplicates of the chain exist. This provides a mechanism to ensure validity and identify when one copy has become corrupted or changed—all without the need for a trusted authority to verify.
- The metadata mentioned above includes a set of two key factors to substantiate a block’s content has not been modified: a “hash” (a digital summary of all of the data in the block—essentially a digital fingerprint of a set of data) and a “nonce” (a random number that when combined with the current block’s content produces the expected hash of the block).
As the blockchain grows, the computing power required to change a block and make it appear valid in context of all other blocks expands. This continuous growth and the publicly shared nature of the blockchain makes it essentially impossible to change block contents, all without the need for an authority to verify change has not occurred.
So, what are the advantages for the construction industry? How can blockchain make building things easier, safer, and/or cheaper?
To read more, check out Greg Ceton’s feature article, “Blockchain and Its Implementation in Construction,” on CSI’s website by clicking here.