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The Rise of Bitcoin and Other Cryptocurrencies in Construction

With Kodak recently confirming that it would be launching its own cryptocurrency to support digital photographers to sell their work online, now is a good time to explore the possible role of cryptocurrencies in construction.

With most contractors and subcontractors still preparing their payment applications and lien waivers by hand and using pen and paper, how can any cryptocurrency improve industry efficiency and productivity? Below is a list of ways that blockchain technology can have a positive effect sooner rather than later.

Building Information Modeling (BIM)

There are several ways that blockchain can dramatically improve the security and reliability of BIM. They can log infinite amounts of data about a particular BIM model component and ensure that it cannot be changed or, if changes are made, instantly communicate who made them. If an issue arises, there will be no confusion over ownership.

Supply Chains and Scheduling

The construction sector has experienced challenges in increasing its productivity and efficiency because the supply chains to build infrastructure assets and buildings are fragmented. Materials can be specified by a designer in one country, sourced in a different one, and then installed by a subcontractor under the guidance of a construction manager.

Blockchain has the potential to streamline the supply chain. When a piece of equipment is delivered to a job site, the transfer of digital cash could automatically trigger a connected obligation, such as the supplier shipping a pallet of materials. These obligations would be coded into the intelligent contracts in this form of the blockchain.

Structural Defects Insurance

Intelligent Contracts

Intelligent contracts could use blockchain technology to enforce the terms of the contract. Each obligation could be added to a blockchain and connected to automatic outcomes such as payment of digital currency. There will be no room for disputes because things are black and white: the condition was fulfilled, or it wasn’t. The result is a more efficient way of creating and administering contracts.

Payments

All payments and receipts can be tracked in a blockchain ledger. If the conditions for payment are satisfied, the software will automatically make the payment and instantly return any required digital document, such as a waiver of lien or any other required digital document.

Insurance

Blockchain technology can make a dramatic difference in the way that insurance policies are created. For example, there have already been talks of ‘temporal’ insurance policies that will only be in effect while work is being performed on a construction site. This ability would reduce the cost to the owner and increase the efficiency of markets in general, especially in combined with IoT (Internet of Things) technologies that could provide the blockchain with data about real-world conditions such as the weather.

By using cryptocurrencies in construction, along with other rapidly advancing technologies, there is an opportunity to create a more efficient and profitable industry.

Specialists in Construction Insurance

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