Blockchain Technology Will Change The Construction Industry
The construction industry is often claimed to be unsettling at the same time criticized for being slow going. The construction industry still goes in an old fashioned way; it desperately deserves a chance. There has been relevant research against it, that the industry is a foul mix of interracial culture and practical barriers that as historically disrupted the change. However, the rising action has been started, and the tide is turning.
Construction is one of the most economically sustain an industry of all; many times while recession Government use the construction industry to kick-start the economy. In the USA, the construction industry generates over 1.3 trillion dollars per year in revenue, which is accounted for about 7% of the US GDP. The sector consists of 10.6 million employees working in over 297,000 net jobs.
But the industry faces many challenges; one of the biggest challenges is the complexity of the infrastructure. Over the years, the government has provided the least standards requiring certification from approved companies and individuals. Due to the complication of the work and number of regulations and standards, there are still several issues that disrupt the work-
In this article, we are going to put blockchain salvation to those problems.
What are the problems in the Construction Industry?
As we mentioned earlier, the construction industry goes through many challenges owing to complicated infrastructure, fragmented supply chains, and many others. The supply chain includes contractors, designers, materials, suppliers, equipment manufacturers, and transport providers.
The process is very confusing because of all the regulatory requirements the job needs. The contractual frameworks deal with risk allocation, project management, along with performance and security insurances. This results in higher bid costs, project delays, contractor claims arising from the risk allocation under their agreements. Sometimes unfortunate risk transfer makes single-point accountability more difficult for project performance.
Also, the additional layers of design review, quality assurance, and contract management reduce sector productivity. Over the year’s industry, experts are trying their best to overcome these challenges, improve efficiency, and deliver projects on a decent time and budget.
What are the technical solutions for these problems?
In the recent past, we’ve witnessed the construction industry focusing on new-age technology to solve their problems. The new age initiative includes drones, 3D printing, Building Information Modeling or BIM, also robotics, virtual reality, and IoT’s to lift the project productivity. The improvement of information transparency and industry approach traceability can be only possible by the digitalization of the data. However still unsure, so the question stands up …
Can Blockchain Technology help?
In this pivotal moment, we should say that blockchain is being developed and used by several industries, including banking and agriculture. The blockchain is a distributed ledger technology that enables storing records and using the data to improve processes. The technology allows stakeholders to access the complex layer process of design review, quality assurance, project management, transaction, and payment records. Because of that, the number of intermediates is reduced, resulting in speeding up the whole process.
So, were can Blockchain provide support…
· Payments: One of the foremost challenges faced by the construction industry is timely payments. In the old age infrastructure, the regulatory frameworks and primary requirements such as payment security, defects bonds, retention trust, and projects bank accounts follow a number of rules and sections which degrade the speed of payments to workers and subcontractors. Blockchain technology will improve the decency and accountability in the payment process enabling secure and traceable transactions. This will also help the government and superior bodies to monitor transactions and contraventions.
· Smart Contracts: The creation of Smart Contracts is only possible because of Blockchain technology. These are self-executing digital contracts that can automatically transfer currency. Smart contracts can be used for automated payments, intellectual property rights, and ownership transfer of materials and equipment. It helps to reduce the headache of paper shuffling between peers.
· Supply Chain Management: As I mentioned earlier, the construction industry supply chain is full of complexities. The blockchain technology allows the stakeholders to all stages of supply chain management – from design to materials procurement, incorporation, and construction.
· Health and Safety Management: When controlled by Blockchain, the site events such as safety incidents, malfunction of equipment or materials, and weather conditions can be logged manually or via IoT sensors. Blockchain technology provides a source of WS and site information with better accountability.
· Building Information Modeling: The combined technology of BIM and Blockchain will allow stakeholders to collect a high volume of data from design packages. Presenting the information in a dashboard format. Additional perks include a progress report of the project that can be updated and monitored, work hours can be registered, and above all, everything can be securely shared between peers.
In the end, blockchain is undoubtedly a promising technology regardless of any industry. When it comes to building efficient two-way communication channels, it is proved to be very useful. However, only after considering crypto technologies for the construction industry we can be sure that we can make the most of it.
We’ve presented five different applications of blockchain technology in the construction industry. If you think we miss out on something, please share your idea on the comment section below!