The concept of smart cities is driven by the goal of using technology to create an interconnected, intelligent urban environment. It creates a synergy between technology and our physical environment, improving quality of life and encouraging sustainable growth.
The Internet of Things (IoT) promised to make this possible – a network of sensors and devices that exchange real-time data to facilitate decision-making. However, engineering a smart city is an incredible undertaking. While IoT certainly catalyzed progress, it fell short of the vision of what a smart city should be.
Smart city technology is expensive. It requires coordinating multiple stakeholders and retrofitting legacy infrastructure to be compatible with new technology. Watertight security measures that protect privacy and prevent data leaks or potential attacks are non-negotiable. The list goes on… As we know all too well in the blockchain industry, it takes overcoming plenty of backend complexities to create a truly frictionless system.
As a result, smart cities arguably never scaled to the level many had hoped. Despite the development of new technologies, few cities have implemented them at scale. Yet that is not to suggest that efforts were wasted. The principles of IoT created a foundational framework for new technologies like blockchain to be more readily implemented in city planning efforts.
Leveraging Blockchain to Bring Smart Cities to a New Level
Blockchain addresses many limitations hindering smart city technology, particularly the MRV (Measurement, Reporting, and Verification) problem: standardizing, reconciling, and ensuring data accuracy from IoT networks.
These challenges largely stem from data fragmentation, leading to interoperability issues, ownership disputes, and conflicting security standards – challenges blockchain is well-suited to address. Blockchain systems reconcile data from multiple sources and ensure data integrity, preventing data manipulation and fraud after submission. Simply put, the decentralization, immutability, and transparency provided by blockchain technology ensure trusted data inputs that are guaranteed to yield reliable and verifiable outputs.
The MRV problem can be solved by combining trusted IoT data with trustless processing, powered by blockchain, as every aspect of data collection and processing is transparent and verifiable. This will build trust between all entities involved, as well as enable better decision-making.
DePIN (Decentralized Physical Infrastructure Networks) not only incorporates blockchain technology into a smart city framework, but leverages its properties to introduce a community-based economy to sustain and expand the network. It reduces many of the upfront implementation costs that are often a rate-limiting step for smart city initiatives, and can act as a powerful coordination tool during early stage implementation.
DePIN is often supported by a network of individuals that are incentivized to share physical resources, making the network self-propagating and user-owned, bringing together the data from IoT infrastructure, the data integrity and transparency of blockchain, and a human component. Community members, service providers, and manufacturers are connected in a distributed ecosystem, where every party directly benefits as the network grows.
Source: Grand View Research
Real-World Impact, at Scale
Early DePIN and blockchain projects have yielded meaningful traction, proving its utility in smart city development. DePIN technology successfully decentralizes control and ownership of physical infrastructure in the real world, while simultaneously creating an interconnected network of community-driven solutions that benefit everyone – from data storage and telecommunications, to environmentalism and healthcare. Here are just a few examples emerging in the landscape:
The Helium protocol crowdsources connectivity by rewarding individuals who deploy network hotspots with cryptocurrency and connectivity. The Helium Network is powered by over a million hotspots (and counting), providing wireless coverage to IoT and 5G devices. It has since extended its connectivity and services to Mexico, worked with Google to bundle its smartphones with Helium services, and rolled out an extremely affordable 5G mobile data plan in the USA.
In conservation, Lilium auctions carbon credit tokens from producers with forest reserves, allowing companies to bid and offset emissions. Blockchain can enhance the reliability of carbon credit accrual by providing transparent and immutable records of environmental actions. Emerging Eco launched one of the first blockchain-native, digital-MRV, carbon credits, using blockchain to strengthen the credibility and accuracy of the energy efficiency of cookstoves.
In city planning, the Brazilian university, Universidade Federal Fluminense (UFF), is exploring how to implement secure IoT data reporting to enhance urban services like water quality, air pollution levels, traffic conditions, and energy consumption. Processing this data on-chain ensures data integrity when seeking to improve infrastructure and services.
These early examples are just the beginning of how blockchain technology can be applied to smart city infrastructure. Smart cities are a hybrid use case for blockchains in the way they can both leverage incentive mechanisms to deploy networks at low cost and develop blockchain-enabled solutions for specific business use cases.
Once regulatory clarity is established, new rules can be implemented directly into smart contracts to automate compliance, opening up the design space for more innovative solutions. They will be able to respond dynamically to legal updates without need for manual intervention. It enhances efficiency, encourages positive behavior, and introduces versatile, sustainable economic systems.
Overcoming Challenges to Accelerate Progress
Blockchain’s utility in smart city development is abundantly clear. However, certain challenges will need to be addressed before it can fully take off.
Regulatory frameworks cannot afford to be reactive. They must evolve quickly, providing proactive, clear guidelines that encourage adoption, protect users’ privacy, and don’t stifle innovation. The impact smart cities will have on society will depend on how receptive stakeholders are to new technologies and how efficiently they are tested and implemented.
Engagement is vital on every level, from developers and researchers to policymakers and individual contributors. Despite promising projects, we are still very early. Developing new solutions will require ongoing experimentation and collaboration between blockchain developers, city planners, and local utility providers.
Awareness-building and advocating for blockchain adoption will also be critical. The robustness of these systems will rely on a growing body of participants, to contribute data and keep it secure. Educating people about how these technologies benefit wellbeing, incentives to participate, and collective benefits, is crucial for expanding the network.
Building successful smart cities requires rethinking current systems, embracing technologies that address barriers, and creating opportunities for more innovation. Blockchain-enabled IoT technologies are poised to accelerate sustainable urban development, making cities more efficient, responsive, smarter, more equitable, and more livable.
Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.
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