Blockchain could help make cities more secure and generate new value. Gianni Minetti CEO, Paradox Engineering, explains how.
This article is sponsored by Paradox Engineering
At the recent Smart City Expo World Congress 2019 event in Barcelona, I had the opportunity to meet many city and utility managers and share interesting insights about the emerging uncertainties and pressures they face.
One thing is clear: a new approach to urban government innovation is required and smart technologies are essential for more secure, transparent, efficient and resilient communities.
I strongly believe blockchain should be one of the technologies that come into play. There are several reasons for this.
We tend to think of blockchain as a brand new technology, but it was actually a theory put forward all the way back in 1991 by the mathematician Stuart Haber and his colleague W. Scott Stornetta, who first described a digital hierarchy system called “block chain” to order series of transactions through digital timestamps.
The primary reason to endorse blockchain is cybersecurity.
In 2008, blockchain as we think of it today was conceptualised by Satoshi Nakamoto and implemented the following year as a core component of the cryptocurrency bitcoin.
Simply put, blockchain allows individuals and organisations to make instantaneous, secure transactions over a distributed network. As a new combination of mature technological concepts, including peer-to-peer networks, distributed consensus algorithms, validity rules, ledger technologies and cryptography, blockchain can be successfully applied in any domain where relations are based on trust and may be entirely disintermediated.
This is particularly useful for cities. Picturing a city as a smart network of connected urban objects (streetlights, meters, parking lots, waste bins, Wi-Fi hotspots, video surveillance cameras, etc.), blockchain allows all components and devices to be linked to each other by the same cryptographic chain of trust and enable accurate, secure, immutable information exchanges among them.
Therefore, the primary reason to endorse blockchain is cybersecurity.
Cybercrime is a risk that no city can overlook any longer. According to industry experts, more than 70 per cent of all reported ransomware attacks in the US in the last two years targeted state and local governments. Lloyds estimated that New York City alone could face over $2.3 billion in cyber-related losses in 2020.
Granting the highest possible levels of data integrity, validity and immutability, blockchain technology makes commissioning and operational procedures over smart urban infrastructures intrinsically secure. This means cities can move away from the conventional ‘bastion defence’ paradigm to benefit from security-by-design network systems, where vital services such as energy distribution, public transportation, lighting, emergency support, etc. can be safely hosted and managed.
That’s a huge step forward in mitigating cities’ vulnerabilities, and finally treating cybersecurity as a public good.
However, there is also another reason why blockchain should be on the agenda.
In smart cities, all urban devices connected to an Internet of Things network have the capability to receive and transmit data and execute commands, enabling remote monitoring and dynamic, adaptive control functions. Smart lighting is a popular example: by acquiring data from street lamps and correlating it with calendar occurrences, environmental conditions or vehicle transit, we can switch and dim lights exactly where and when required, thereby reducing energy consumption, optimising costs, improving quality of service and boosting citizen satisfaction.
But what if device-related data could be monetised and turned into a revenue opportunity?
Thanks to blockchain, data from streetlights, parking lots, waste bins, environmental sensors, and other urban objects can be transformed into tradable tokens. Think of the information a parking sensor generates about the car lot being vacant or busy. It can become a token and traded; parking operators can buy these “info-tokens” to design and offer their own smart parking services. These can fuel private businesses, while cities turn their parking sensor investment into revenue, at the same time as benefitting from lower traffic and pollution, and higher quality of life.
What if device-related data could be monetised and turned into a revenue opportunity?
“Info-tokens” can be derived from virtually any sensor in the urban network. Environmental data such as the density of PM10 and PM2.5 particulates, carbon monoxide, etc. can be used to feed traffic-mitigation applications and dynamically manage restricted traffic zones based on air quality.
Universities, start-ups and any other local organisation can design innovative applications and services by mashing-up different data streams.
It’s time to really change the game for smart cities: over-the-edge cybersecurity is in order, as is turning cost-saving into revenue generation and boosting new economies. Open and interoperable urban networks are the bedrock to implement blockchain-based applications and let information become a tangible value for the benefit of all.
What about your city network? Is it this open and cybersecure? Does it let you make money on top?
Join Paradox Engineering, AEM and SmartCitiesWorld for a webinar on how to bring the benefits of blockchain for smart cities to life (January 23). Find out more and register now.