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We are seeing the emergence of a second digitization revolution that could be centered around the new blockchain technology.

Chapters
0:00 Introduction
0:37 First revolution
1:16 Second revolution
1:34 What is blockchain?
3:13 Smart Contracts
3:50 Sponsor
4:27 Skilled Labor
4:57 Payments
5:36 Supply Chain Management
6:28 BIM
7:13 Drawbacks
9:13 Conclusion

Blockchain is a digital ledger that stores information in records called blocks. Each block has three main components: data like timestamped transactions or agreements, a hash which is a digital fingerprint or unique identifier and the hash of a previous block. These blocks are linked together chronologically, like a chain of blocks. You cannot make a change to the information in a block, instead you create a new block, chained to the last block.

Cryptography makes the blockchain ledger secure. Each transaction is recorded using encrypted data. If someone tries to tamper with data, the change will result in a new hash. By comparing the two root hashes, users can see that the data is compromised.

Another key advantage of the blockchain technology is trust. In order for business transactions to be executed, trust must exist between management and the employees of an organization and between an organization and its partners or customers. Trust isn’t built into the current version of the internet and we don’t trust each other.

The current media attention and hype around blockchain is mainly due to cryptocurrencies like bitcoin. But that is just one way of using blockchain technology. Let’s look at some other practical applications in architecture and construction.

SMART CONTRACTS
Construction projects usually involve a large number of companies. You typically have to wait to get contracts, change orders and addendums from all the parties. You have to pay all the companies involved and wait for their status reports. Blockchain allows us to set up smart, digital contracts with a centralized tracking system. The companies involved define the rules, deadlines, and penalties before the project starts. The blockchain automatically enforces these rules during the project.

SKILLED LABOR
Through blockchain, vendors and suppliers can use unique identifiers to record their performance and grow their reputation. LinkedIn listings and resumes are self-reported and unchecked but the blockchain is the “source of truth”. It can be easier to verify a company’s credentials and check their past roles before hiring them. You can vet candidates and identify recruits more easily.

PAYMENTS
Late payments and cash flow issues are continuing problems in the construction industry. Transactions between parties usually include invoice errors, payment errors, bank holidays, currency conversion fees, etc. The average payment time for small and medium sized companies is over 80 days. This can put the whole supply chain at risk.

SUPPLY CHAIN MANAGEMENT
The fragility of our global supply chain has been exposed over the last two years. Blockchain systems can improve their robustness because materials are logged and traced, delivery time is easier, quicker and less bureaucratic. Dispute resolution is faster. You have better control of inventory and you can order and receive goods as needed which reduces waste. This can lead to lower costs and faster schedules.

BIM & SMART ASSET MANAGEMENT
Building Information Models can act as a single source and dashboard of all information. All the parties would be working to match the physical construction to the BIM model. Any deviation from the model would result in penalties. BIM models can contain supply chain information, source of materials, payment details, revisions, etc. By combining BIM and blockchain in smart contracts, you can make payments, send out material orders, hold subs accountable and improve transparency, communication and workmanship on a project.
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SOURCES




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Disclaimer: This video was created for educational/informational purposes and qualifies as Fair Use. If you are the creator or own the footage featured in this video and have reservations please notify me via Youtube comments or email and I will accommodate you
#blockchain #bitcoin #cryptocurrency #construction #technology #disruption

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47 thoughts on “Youtube video -How Blockchain is Disrupting the Construction Industry”
  1. I've spent the last 4 years being very skeptical about blockchain and crypto. Since then, it has become a self-fulfilling prophecy as the "future of work". What do you think about it?

  2. I see all these comments in here about how blockchain will not fit the construction industry. And I laugh! It will! By itself and in its current evolutionary state, of course not. But the merge of AI with blockchain, the need for human input will be greatly diminished. Just remember what was said about email when it first arrived! Industries will bend or break and be reborn. I think you did a great job on covering blockchain technology and its possible use cases. Keep up the great 👍 work!

  3. I'm going to make a wildly blanket statement here that so far has turned out to be true. Blockchain is never an answer to anything. There is always a simpler solution that already exists. Blockchain is a neat thought experiment looking for a problem it can be a solution to. Unfortunately neat thought experiments never really work in the real world.

  4. I can't see how any of this needs the blockchain. Not that I disagree that the areas you named will change and are about to change, but I think it is a little naive to think blockchain will be the solution. It is in the end nothing more then a very convoluted way of encrypting things. Let’s ue the contract example. Essentially the attempt is to replace Lawyers as the trusted party with the blockchain. While tempting it seems short sighted and also ignorant of the fact you still need lawyers to draw up the contract. So instead of reducing the cost you now increased it to use a new tech instead of using a “normal” contract that your lawyer encrypted with one of the many other encryption that are far less redundancy based. What I see for the future is that lawyers will start having “trusted” servers where contracts can be encrypted and stored. You know like they do right now just digitally. This also removes the biggest weaknesses of block chain(like with paper and mail) the people using it being dumb.
    Also let’s also not forget there is other systems to do what blockchain does just not linked that are far less energy intensive. Hashes aren’t new, encryption is not new, the idea to store both to be save is not new. The fact that linking them in a way that is mathematical complex is new and well it is just that a showy way for do the same thing. A XTS-AES 128 encryption will also hold, not as long as blockchain? Dunno?´Both are currently out of the realm of our computing by a long while.

    So not to sound rude, but we won't juggle a block chain trail. The points above combined with the amount of energy and money wasted every time a project needs adjustment make that idea dead on arrival. Imagine a mega project needing to spend energy and cash that could be used on the project just to set up a new contract for new lights and add them to the chain. It is extremely inflexible and in direct opposition to the idea people try to sell with block chain. We got good encryption, we don't need this stupid gimmick for that. What will change is the adoption of digital infrastructure and services. Some are already in places and others need building. Non of them will use the blockchain as the market has shown time and again it is not aiming for the most secure, but the most effective and blockchain is many things but most effective it is not in many many cases.

  5. Of course! Nothing is always good or bad.

    Everything can be used for both good or bad!

    Blockchain is currently being used mainly for bad IMO, but can be used for good if employed correctly

  6. I think in the end, it ( blockchain) will make us weaker. Everytime we digitise something, we loose a realife actual skill or knowledge. Its a very easily collapsable thing, and we wont be able to , or at leats will strugle to go back, when needed.

  7. As someone who has witnessed the Cad revolution in the architectural field, i can tell you that it did not lead to efficiency. The budget for the planning stage remained the same, it is just that we invented a lot of information that should be communicated. When you consider a hand drown plan from 30 years ago with a comparable plan today, you will see a lot more black ink now. Most of this information is only there to please project management proces control surveyers and other people of that sort. Burocracy has grown exponentialy, partly due to the more complex technology, but also because jobs could be created.

  8. The reality is that the relative global peace has lulled nations into to relying externally for more and more fundamental and vital components of commerce and production. This relative peace will not last as Russia, China, and events in the Middle East are showing as well as pandemic related supply chain disruptions. Self-reliance as far as possible is a key to the sovereignty and strength of a nation Blockchain just further erodes sovereignty thought few, except the money launderers who use it, understand this to date.

  9. All to often blockchain is a solution in need of a problem. It's only real benefit is that changes are logged…but at the expense of seems of data, and processing power. It is getting more efficient, but right now it is a huge energy sinkhole, and there are cheaper ways to accomplish the same task.

  10. Thank you for covering key concepts such as the blockchain and smart contracts so neatly! I made an in-depth explanation of how blockchains work, and I can appreciate how this was a much more concise summary of what was a 15 min video :p

  11. Very cool and informative. Thank you. I see technology improving the precision and accuracy of the construction industry so that there is less and less disparity between the plan and the reality. Also perhaps blockchain can be harnessed to manage the discrepancies. It can be used to track what is actually built. Cryptocurrencies may be the latest Dutch poppymania but blockchain is a very useful concept.

  12. You didn't actually go over any of the downsides to blockchain besides "it's a new technology". Anyone can lie to it, there is no built in enforcement mechanism, its grossly environmentally unfriendly – where is the critical evaluation we subscribed for? This is a big disappointment.

    I loved this channel when it was "shipping container homes are a scam" – Yes, finally a video that says it all! And now the biggest scam of the last two years – you're falling for this? Next you'll be making videos about NFTs!

    Videos like this encourage the mindset of "believe the computer, it cannot lie" – this is not the case. Cybernetic systems merely leverage human ability and investment. 95% of blockchain applications are scams. Smart contracts have yet to work.

  13. Too much hype about blockchain. It is a useful technology but it is not a solution for every single problem in the world. And even for the problems it can actually solve it is not always the best solution in comparison with other more traditional technologies.
    Plus blockchain is currently used a lot by B.S. companies and other scammers. It makes me suspicious about every company claiming that they use blockchain in their product.

  14. I prefer the new thumbnail but the title doesn't feel quite right? I'd change the word Disrupting as that's what put me off before i got a notification saying it was one of your videos, though to what I'm not sure?

    Its a good video though, I use crypto regularly myself but I didnt see blockchain technology actually working for or seriously Improving anything else untill this video, I think blockchain could have finally found a problem to solve.

  15. Interesting concept, but I don't think it will be widely accepted in the construction industry. Every project is unique in construction, and I think this is just adding another complication to the process. Perhaps it would work for larger residential projects where there is a lot of repetitive operations, tight timeliness and sub trades need to be coordinated constantly.
    To me it seems like block chain is being over promoted, and it is the latest miracle fix to solve problems that are not being addressed properly within the construction industry.

  16. I used to work in innovation in construction for a major actor in the US, and I have given this same presentation 3 to 4 years ago. Problem is, digital ledgers have been around for a while now. As long as blockchains are not recognized by governments as legal tools between entities, it doesn't make enough of a difference to be worth risking implementation and trying to onboard other partners. Sorry, but nothing new here. Move along, move along.

  17. Smart contracts might work for smaller parts of a project, but it would require all parties to act with integrity and honesty – in which case you would not necessarily need the blockchain or smart contract. I would imagine some parts of the automization of large complex projects will occur where they reduce costs, and those automated contracts will naturally accrete to become smart packages of contracts. Its going to take some very smart and flexible programming to overcome perceptions of whether a particular process is 100 percent complete – or 95 % complete.

  18. I disagree with statement that “BIM is not single source of truth”. It absolutely is, if you set the project up that way. The problem is that this source stores whatever designers put in it. It’s garbage 🗑 in garage out 🚛. Single source of truth doesn’t guarantee that there are no errors in the model. It guarantees that there is no confusion about the reference point. Designers putting all their design decisions in a single place and builders know where this place is.

  19. As others have observed, blockchain seems a solution in search of problem. It's like when personal computers were beginning to be sold: it would transform people's lives, but today they are mainly used to play games, surf the internet or watch movies. Of course, I'm no expert on any of these subjects, so I really hope I'm wrong.

  20. One issue that came to my mind was a human factor corrupting the blockchain. I don't see how putting performance reviews on the blockchain would be any different than LinkedIn. You still have to trust whoever is writing that review to be honest.

    And let's pretend a mistake was made on the blockchain due to a human factor. You cannot revert it and the inaccuracy will be on the blockchain for all time. You'd have to ammend it or misinformation would hurt someone, but if one party disappears or is not cooperative then is it even possible to ammend? If it is possible then you have the same issue of an authority able to ammend the record as they'd like.

    Another issue with decentralized blockchains is the smaller ones are at risk of someone creating many nodes to obtain a majority and then rewriting large chunks of the blockchain in their favor. The consequences if the blockchain has any legal or financial trust is frightening.

  21. There is no question that software and technology is changing every industry but whether blockchain is that crucial technology must be proven

  22. Blockchain as you describe it is not the solution to anything. The same can be achieved by using a "trust worthy" party (such as the government or a large bank), managing the whole ledger by itself, and publishing all transactions to whomever requests it. It can publish periodic (yearly, daily, or even per-second) hash of the whole database, allowing anyone to verify that the sum of the transactions between the previous update to the next, is exactly what explains the new hash. This allow anyone to verify everything, just like blockchain, but without the overhead of finding random hashes to satisfy some arbitrary mathematical rule. The only advantage of blockchain over this system is when that central ledger is so untrustworthy, that many of the parties check each and every hash, even though they can sample any point of time, and prove that after 99.999% testing, the next one is also correct. The whole blockchain idea is a solution looking for a problem, and that problem never shows up.

  23. Most construction companies and property developers don't even regard a fibre network in a building or any development for that matter as being critical to the optimal efficiency of that particular building or development. We are a good quarter century from seeing Blockchain properly integrated into the construction industry.

  24. To understand why blockchain is valuable, you must first awaken to the knowledge that we live in a world full of thieves.

    People who sit between point a and point b and charge a fee.

    Politicians are pretty good example of this, as are banks.

    We have an almost unlimited number of flawed implementations out there right now. There are new people getting it wrong every week.

    Anyway the word for removing the middleman is disintermediation.

    From an engineering perspective a significant number of profound improvements to life become possible through blockchain.

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