Blockchain for AEC & FM

While Blockchain has immediate impact in economies where value can be virtual, we in the design, construction and building operation industry have a different set of problems. 

"We work in a world where our virtual value requires to be turned into a physical value."

How do we go about doing that ?  

I believe the industry needs to re evaluate "Value" and Blockchain can provide part of the solution for this.

Please note that some of this information on Smart Contracts on the Blockchain is original work by Flores FV (2016) and can be found at
http://blog.grantthornton.es/2016/08/31/bim-blockchain-smartconstruction/ and is sole authorship and intellectual property of Grant Thornton Spain – Grant Thornton S.L.P.
also Smart Contracts for Construction is Ref from: Robles DR (2015) with minor amendments Mathews (2016) Extracted from  http://www.naic.org/cipr_newsletter_archive/vol19_blockchain.pdf
Smart Contracts on the Blockchain


A significant function on a Blockchain is a Smart Contract.

In the context of blockchains and cryptocurrencies, smart contracts are:
  • pre-written logic (computer code),
  • stored and replicated on a distributed storage platform (eg a blockchain),
  • executed/run by a network of computers (usually the same ones running the blockchain),
  • and can result in ledger updates (cryptocurrency payments, etc).

A smart contract is some code which automates the “if this happens then do that” part of traditional contracts. Computer code behaves in expected ways and doesn’t have the linguistic nuances of human languages. 

Code is better, as there are less potential points of contention. The code is replicated on many computers: distributed/decentralised on a blockchain and run by those computers, who come to an agreement on the results of the code execution.

https://bitsonblocks.net/2016/02/01/a-gentle-introduction-to-smart-contracts/


An example smart contract on Ethereum. 

Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship or third-party interference
Source: https://www.ethereum.org/token

Companies such as Ethereum  promise to make smart contracts on public ledger block chains as easy to build as dragging and dropping puzzle pieces into a web page.
Smart Contracts for Construction (SCfC)

A “smart contract” is a decision executed by a computer
algorithm on a Blockchain. For example, if condition A and
condition B are triggered, then payment C is executed. 

What potential does this have for us in the design, construction and building operation industry ?

Answer:     LOTS 

An adjudicated smart contract is a smart contract whose execution
is contingent on a physical observation or judgment by a reliable witness. This can be also verified and validated by the construction of "as built" digital modeling with model checking against digitally signature and locked down pre-construction building models. Mathews (2016)

A planning model on a planning blockchain
A tender model on a project blockchain
A construction model on a contractors blockchain
An as-built model on the owners blockchain

An smart contract for construction (SCfC) is an adjudicated contract with the added requirement the adjudicator is deemed the most appropriate person to be performing the adjudication. These additional requirements mean a method is required to establish
the most appropriate adjudicator, and the method must likewise be insurable. 

The (SCfC) administrator must make decisions in physical space—not just digital data. The (SCfC) administrator must be able to be present or by use of technology have a "timestamped" presence in time and space, determine causation of an event and deal with any ambiguity in relation to the facts being observed. 

YouTube Video



The validity of the (SCfCis what establishes tangibility and invokes law— therefore, money and property. 

Securing the pool of decentralized (SCfC) administrators would be essential to insurability of such contracts on a blockchain. Digital Transformation will always see existing roles submerge and new roles emerge. We have examples of this in Ireland where statutory legislation requires design and construction to be "certified". The requirement is seeing a growth of "specialist certifiers" for the design and construction industry. 

The obvious question to be asked here is  "are Blockchains insurable?" 
The insurance industry is faced with both a dilemma and an
opportunity to build specialized insurance for blockchains. Dan Robles paper addresses this. Ref: Robles DR (2015)