Construction Monitoring and Blockchain

Hong Kong Patent

Blockchain Means a More Efficient Construction Industry

Blockchain technology is a revolutionary tool used to record transactions and link them together to form a “chain” that’s known as a distributed ledger. Companies are using blockchain to take control of supply chains and contracts in ways that weren’t possible just ten years ago—but how realistic is the widespread adoption of blockchain in construction?

The three principles of blockchain define it as secure, decentralized, and scalable to any size project.

Secure: Multilayer encryption using mathematical functions hides data in a coded string of characters that are difficult to crack
Decentralized: Connections called “nodes” automatically check transactions, leading to a digital paper trail of verified records
Scalable: Because the information isn’t stuck on a central server, blockchain can be scaled to fit very large projects

Because blockchain projects are spread out, they take away the typical hierarchy of information in a project. This improves project transparency, reducing the need for back-and-forth communication over simple objectives. The result is that any project can be made more efficient with blockchain technology.

Communication between builders, vendors and laborers can delay completion timelines. Blockchain adoption is a trend that will help the construction industry become more efficient overall.

There are six immediate benefits to the construction industry that blockchain technology provides:

Predictive asset maintenance
Smart contracts that stay on track
Proactive third-party oversight
Accelerated payment processing
Instantaneous collaboration
Streamlined supply chains

Leading construction solutions and services firm Aon estimates that 95% of information about a construction project is lost in the transition to the completed project’s first owner. The distributed ledger in blockchain can store lifecycle information about every asset in a building project, like warranties, certifications and replacements. An immutable, digital replica of the construction project is set up within the blockchain. This acts as a model to ensure the project is within scope, but also as a virtual home for assets so they can be easily searched and quantified.

When dozens of subcontractors are hired to complete tasks, additional oversight is needed to ensure a complex project will adhere to local standards and regulations. This might be legal consultation to comply with government regulations, safety management to monitor worksite processes or union representation to advocate for site workers.

Accelerated Payment Processing

Processing payments via blockchain is free in most cases. No authorization or processing fees mean faster payments and less back-and-forth. Blockchain’s strict boundaries, enforced with smart contracts, ensure payment is received for work that’s done according to the project framework.

Instantaneous Collaboration

When dozens of subcontractors are hired to complete tasks, additional oversight is needed to ensure a complex project will adhere to local standards and regulations. This might be legal consultation to comply with government regulations, safety management to monitor worksite processes or union representation to advocate for site workers.