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    Blockchain: making smart cities smarter

    How blockchain can help city services function more effectively

    This is the age of the platform, and blockchain and the smart city are two of the most powerful platforms we have.


    They’re also intertwined with each other, or they will be. Blockchain is a distributed ledger technology best known for its role in providing secure, instantaneous, and efficient data exchange and storage to the cryptocurrency ecosystem. It promises to deliver benefits to the smart city in much the same way. In doing so, it will help the smart city fulfill its potential as a safe, sustainable, and user-friendly location that promotes business success and citizen well-being.

    A step up in sustainability

    The future will almost certainly be more urban, and urban areas are going to have to get a lot greener to keep ahead of climate change. Many cities in the developing world are growing at a startling rate, but cities of all kinds will have to adopt sustainable practices. The need to do so is urgent, as incremental progress over a long time horizon will inevitably fall short.


    Blockchain can help cities become sustainable more quickly.


    Consider sustainable smart mobility solutions. By making them more efficient, blockchain can make them more popular. Many city bike programs, such as Paris’s Vélib and New York City’s Citibike, have made urban life less congested, less polluted, quieter, and greener. These enterprises now accept payment via cards and apps, but blockchain-based payment solutions promise to be faster, simpler, and more secure, encouraging usage.


    Blockchain payments will also likely drive adoption of similar sharing and mobility-as-a-service solutions that offer alternatives to automobile use and ownership. Blockchain can support legacy urban transportation systems as well, helping to make fare calculation and collection more efficient. Transit systems in many major cities have already switched over to touchless digital payment systems. By removing payment processors from the equation entirely, blockchain can make these systems cheaper.

    Blockchain can also flawlessly record maintenance and accident data on buses, railcars, and other rolling stock, making upkeep economical and efficient.


    The automobile isn’t going to vanish from city streets anytime soon—and even if it does, trucks will still be a necessary presence in urban neighborhoods. But blockchain can make it easier to live with these vehicles, in part by serving as a repository for driver safety and accident data. That data can then serve as the basis for individualized insurance policies, making insurance more responsive and less costly for everybody. 

    Making smart energy smarter

    Blockchain promises to have a powerful effect on state-of-the-art energy solutions that are so important to smart city ecosystems.


    Blockchain can securely and reliably track transactions that occur across a two-way smart energy grid—as when, for example, excess power generated in one location is shunted to another location that requires it.


    Even more intriguingly, blockchain can create a safe space for peer-to-peer energy trading systems. “Prosumers” presiding over green microgeneration facilities and microgrids will be able to sell the excess energy that they generate. Blockchain will record the process, keeping it honest every step of the way, and providing verification that the energy is actually as “green” as advertised.

    More secure systems

    Most industry observers agree that blockchain has the potential to transform cybersecurity in connected city systems.


    Effective smart cities rely on an ecosystem of connected systems—street lighting, parking, emergency response, meters, public broadband access points, and so on. These systems deliver their true potential only when they are open and integrated sufficiently to share data and commands. For example, street lighting and traffic signaling can instantly and automatically respond in the vicinity of a roadway accident at night, if the systems are able to notify one another of events that sensors in the system can detect.


    Through consensus algorithms, ledger technology, cryptography, and other capabilities, blockchain allows different systems and devices to exchange information in an accurate, secure, and unfalsifiable way. This ensures not only interoperability among different systems and system components, but cybersecurity at every point along the way.

    “Thanks to blockchain-powered applications, cities can . . . benefit from security-by-design network systems, where vital public services can be safely hosted and managed,” says Gianni Minetti, CEO of Internet solutions company Paradox Engineering. :That’s a huge step forward in mitigating cities’ vulnerabilities, and finally treat cybersecurity as a public good.” 

    More effective services

    Good provision of citizen services is fundamental to the smart city. Blockchain can help make it happen, and without cumbersome and expensive oversight from regulatory agencies.


    With programmable functions that trigger automatically, blockchain can render obsolete the government offices preside over pension, welfare, and other payments. It can also eliminate the need for the financial institutions that mediate these payments, along with the fees they impose.


    Blockchain can make tax collection and real estate registration more transparent. More importantly for sustainability initiatives and green audits, blockchain can comprehensively track and improve regulatory compliance. With blockchain-derived data in hand, cities will finally have the means to enforce emissions standards, and to evaluate different technologies and solutions to see which ones are performing well and which ones need to be adjusted or replaced.


    Blockchain can also support city sustainability in less obvious ways. With secure blockchain voting in place, for example, citizens can cast unfalsifiable ballots electronically, all but eliminating the need to run voting locations throughout the city and radically reducing voting day traffic.

    Not just an opportunity—a transformation

    According to research conducted by PwC Global, the total worldwide impact of blockchain could exceed US$1.75 trillion by 2030, and could create or affect upwards of 40 million jobs.


    According to Lucy Gazmararian, Crypto and FinTech Advisory, PwC Hong Kong, “Blockchain has the potential to cut costs, speed up transactions and promote greater financial inclusion by streamlining cross-border and remittance payments. These powerful innovations will transform payments infrastructure.” Blockchain’s ability to provide provenance—to track and trace materials, products, and services—promises to transform supply chains and logistics in retail, manufacturing, and other key business segments.


    How can you be certain that the lithium battery in your EV has been ethically sourced? How can you make sure it will be disposed of in an environmentally safe manner? How can a city quantify energy savings and emissions reductions from smart street lighting and related technologies? How can enterprises that conduct business within a city be held accountable when they disregard sustainability regulations?


    Blockchain promises to answer such questions—comprehensively and flawlessly.

    About the author

    Jonathan Weinert, IoT Lighting, Signify
    Award-winning writer Jonathan Weinert has been been researching and reporting on LED lighting, connected lighting, and the IoT since joining Signify in 2008.

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