fbpx

And if tomorrow the blockchain “disintermediated” the construction sector?

4 minutes of reading

Originally developed in finance, blockchain is a technological innovation filled with promise that arouses the interest of many players in various sectors. And especially the construction industry! Focus on the blockchain in the sector of construction.

blockchain, construction, innovation

Blockchain is a technology that stores and secures the transmission of information in blocks, between the different members of a network:
1. The “customer” performs his transaction,
2. The transactions are collected and stored in a block,
3. Each block is validated through decentralized links in the chain using cryptographic algorithms,
4. Then it is dated and added to the blockchain, accessible to all users (or even everyone, in the case of public blockchains),
5. The “supplier” receives the transaction from the “client”.
This technology was used in the beginning to manage cryptocurrencies, but it is developing in other sectors: insurance, banking, supply chain, energy, health but also construction and real estate.

What are the advantages of blockchain for the construction sector?

Blockchain is a new transaction validation mechanism that should simplify many of the steps in acquiring a building. A blockchain is unfalsifiable. As a result, the risk of transaction fraud is reduced, and fewer control and expertise operations are carried out. It is for example possible to consult the history of a transaction at any time and to know with certainty who the current owner of a property is.

The construction and maintenance of a building require good coordination of the various actors and require a multitude of data. Thanks to smart contracts, the blockchain allows automatic ordering and delivery of a product, once the life of a component has expired.

In general, tracing the contributions and interactions of each stakeholder within a building would not only allow significant savings on maintenance and litigation, but also the construction of new services from this data.

These advantages have already won over several governments, which are entering into partnerships with start-ups in order to transfer their cadastral registers to a blockchain register. This is particularly the case in Georgia, where the authorities are working in collaboration with the start-up ‘Bitfury’ to host their property titles, notarial services, loans, etc. on the blockchain. Similar projects have been launched in countries such as Sweden, Honduras or the United Kingdom.

Legal questions obviously do not fail to arise due to the opacity of blockchains and the impossibility of modifying them. How can the courts read smart contracts and identify all the parties involved? The legislator has not yet looked into the legal shortcomings of the revolution that this new technology will bring about.

By building on the blockchain, the real estate sector could gain flexibility, transparency and fairness.

Blockchain applied to real estate transactions:

Blockchain is starting to develop in the real estate sector. With more than 800,000 annual transactions, real estate represents one-tenth of France’s GDP. It’s a very tight market, which doesn’t always have the flexibility you would like. That said, it has known, since the 2000s and the advent of the Internet, many innovations that are now used by French Proptech :

– virtual tours,
– electronic signature of contracts,
– rental platforms between individuals,
– rental of remote garages with connected locks,
– crowdfunding, etc.

The arrival of the blockchain will bring a real revolution with fully secure transactions, realized outside ordinary processes (conservation of property titles, notary, etc.). The blockchain provides total transparency, instant and secure completion of transactions. All information is stored, verified, preserved and made public without any danger. Currently, legislation in France does not allow transactions without a notary, but it is likely that it will adapt to the development of technology.

The blockchain therefore allows data sharing and security between the different partners and stakeholders. It helps to reduce delays and to recognize everyone’s responsibilities in carrying out the project, thereby limiting litigation.

BIM and Blockchain:

“BIM is very data-centric and the best way to build trust is to trust the data itself, which is not the case today,” says Arnaud Gueguen, co-founder of Bimchain.io . The French startup is working on a web application to monitor communications and commitments among project participants in the complete design and development ecosystem. The app will connect directly to Autodesk Revit.
For Bimchain, trust means “everything on signed paper, not the 3D model”. “All legal documents signed. It was our entry point into the solution, trying to link the contractual paper base to operational digital data, “said A. Gueguen. Bimchain’s goal is to make the model a unique source of truth. “Today, BIM data is not contractual. There are many sources of truth: BIM, PDM, DWG, paper. “We are confident that using Revit as the sole source of truth will greatly improve the model.”
The first step of Bimchain is a proof of contribution module, in which contributions, agreements and validations are certified on the Blockchain and integrated into the BIM Revit model. “It’s proof of a handshake to prove that the BIM manager, the architect and others accepted the model,” said A. Gueguen. “We believe this will replace the multiple process of signatures and papers with an indisputable system.” Bimchain uses the Blockchain Ethereum, the second largest cryptocurrency by market capitalization and the first to introduce smart contract tools specific to the Blockchain ecosystem.
Maciel and Robert Aish, known by many to be the father of generative design technology, are working through CBC to launch three open source projects related to BIM and Blockchain. One for distributed financing, the other for smart purchasing and the “most ambitious” project related to the use of Blockchain, machine learning and BIM for design processes.

“Construction has been recognized for its inefficiencies and ineffectiveness, but also for traditionally importing innovations from other sectors and adopting them in an ad hoc manner,” notes Eleni Papadonikolaki, researcher at UCL Bartlett School. She predicts that Blockchain will be just one of many new technologies adopted. “The Internet of Things, Artificial Intelligence and BIM all promise to bring simplification, transparency and a chain of responsibility not only to transactions throughout the construction supply chain, but also to interactions between systems, physical and digital. ”

Trust, traceability, identity … the revolution led by the blockchain is at the center of all reflection. Tomorrow, will this revolutionary model dethrone the big digital platforms to go towards a generalized disintermediation of exchanges?