The Radical and Interconnected Future Of Blockchain and Smart Cities

Justin Zipkin
Mar 6, 2018 · 9 min read

“Blockchain” and “Smart Cities”. Two independent buzzwords that are each destined to shape our future in different ways, but may also shape our future by working in tandem.

In this article, we will examine the applications of blockchain technology and how they will play a role in the development of smart cities (the cities of tomorrow). I will start by defining both blockchain technology and smart cities and analyzing our current efforts. After that I will dive into how they fit together and what efforts are currently being made.

The Future Outlook of Cities And Their Inherent Security Flaws

Since 1988, The Population Division of the Department of Economic and Social Affairs of the United Nations has been issuing biannual projections of the urban and rural populations of all countries in the world and of their major urban agglomerations.

They say that more than 50% of the global population currently lives in cities — a percentage that is expected to reach 67% in thirty years.

Cities already account for the bulk of a countries’ economy and are the focus of administrative, organizational, logistical, social and environmental problems. With a drastic increase in population size, the current problems cities are facing will only be magnified. To help combat these issues we will need create more liveable urban environments by using resources optimally, and creating new efficiencies. With modern technologies and interconnected devices we will be able to do all of that.

The significant advancements in the Internet of Things (IoT) and wireless communications have made it easy to interconnect a range of devices and enable them to transmit data ubiquitously, even from remote locations. However, these systems are more instrumented with open data. Thus, locations, personal, and financial information must be capable of defending against security attacks. With data flowing freely to help deliver an improved society, it comes at a big security risk. Cybersecurity experts at The Kaspersky Lab show that smart terminals such as bicycle rental terminals, self-service machines, and information kiosks have a number of security flaws. These devices can be exploited by cybercriminals who have been gaining access to the personal and financial information of the users. It is also worth noting that the implementation of traditional security mechanisms into a city’s critical infrastructure to make it smarter has failed. Thus, new solutions based on the nature of the data (private or public) and communication platforms have to be developed to provide privacy, integrity, and data confidentiality. At the very heart of developing smart cities is a gaping security flaw. This article proposes that blockchain technology could be the security framework that helps devices and entities communicate bits of information without compromising privacy and security.

What is a Smart City?

A smart city uses information technology to integrate and manage physical, social, and business infrastructures in order to provide better services to its citizens, such as ensuring the efficient and optimal utilization of available resources. With the proliferation of technologies such as IoT, cloud computing, and interconnected networks, smart cities can deliver innovative solutions and can offer greater collaboration between citizens and the government.

For instance, local businesses can gain access to valuable city data that could help grow their businesses. Citizens can also enjoy the benefits of improved efficiencies such as optimized parking, traffic lights, and changing infrastructures depending on the weather or amount of people on the road. In Miami, for example, the government has already been able to save 35% of costs on smart street lights, which only turn on when necessary. Despite a number of potential benefits, digital disruption poses many challenges related to information security and privacy, which is where we turn to the blockchain.

What is Blockchain Technology?

As a quick note, for those who do not know — blockchain is an encrypted database that is immutable, decentralized, and distributed. In layman’s terms, it is a database that is incredibly secure from tampering and hackers, while also being widely accessible to the public. As a digital platform with added security benefits, it is a great fit to be the solution for information security and privacy in smart cities.

Future Urban Developments & Current Practices

Before jumping into the current developments, it is important to understand what a future smart city could look like.

Many different technologists and entities have described future urban developments to be more interconnected than ever before. Building upon the most important aspect of a growing city, lets talk about energy and the way it’s distributed across people in a city.

Imagine a city where energy is distributed by interconnected devices that interact through micro-transactions in real time. As an example, you commute to work on a warm sunny day. You’re walking on the sidewalk, which is built to double as a solar energy grid — laced with sensors. Your phone and laptop interact with the grid, taking energy to charge, while simultaneously paying for such energy in the form of micropayments. All the while, your phone is providing meaningful information to help the city run. Now imagine driving (or you’re riding as the passenger in an autonomous vehicle) on the way to a concert later that night and your electric vehicle has been collecting energy from the energy grid nearby. While on the way, your car sends energy to the street lights to help power them, receiving some money along the way in the form of micro-transactions. Once you are parked at the concert, each car in the parking lot is helping to power the intense light show at the concert with all of their energy. You drive home and your car connects to the nearby grid and powers the lamps and lights in your house. The future that we will live in will be more interconnected than ever, especially from the energy standpoint. IoT devices and sensors will help transmit data, create efficiencies and adapt our living habits to our environment.

With the digitization of all of this information, identities and personal finances will also start to become digitized. In fact, many cities and countries have already begun this transformation with roughly one-seventh of our Earth’s population already having a digital identity. In India, the national government created a program called Aadhar, a form of digital identification, in 2009. Their goal was to register and identify a nation of more than a billion people with their own unique identification. Estimates as of August 2017 have recorded more than 1.17 billion unique identifiers under Aadhaar, with 99% of Indians over the age of 18 enrolled in the program. The Aadhaar card serves as a proof of address and positive identification for a number of important services and transactions in India, including opening bank accounts, obtaining a driver’s license, filing income taxes, applying for social services, and even filing a death certificate. Each Aadhaar member submits biometrics including: a photograph, scans of all 10 fingerprints, and an iris scan. These biometrics, tied to the individual’s home address and UID, are all stored in a centralized database, the Central Identities Data Repository (CIDR), which is managed by the Unique Identification Authority of India (UIDAI). India implemented this program with one of their goals being to make the identification process easy enough that most people in India, regardless of if they have been able to afford or obtain official paperwork previously, can easily obtain a card. In turn, residents can use their card to enroll in day-to-day services and products much more easily than before with much less bureaucratic overhead.

While this was mainly aimed at bringing the basics of identification and the basics of banking into the hands of the main populaces, we are currently seeing many more countries adopting similar digital strategies. For instance, programs led by Smart Dubai have created the goal of having fully digitized passports and payment systems that would be on the blockchain. These efforts are part of their larger goal, which is to be completely digitized as a city by 2020.

The city of Dubai unveiled a strategic partnership with IBM and Consensys as part of their bid to become the world’s first “blockchain-powered government”. As part of the unveiling, Smart Dubai revealed how it intends to oversee the migration of Dubai’s government processes to blockchain systems, a move that will find agencies as diverse as Dubai Tourism, the Dubai Health Authority and the Dubai Police leveraging the technology as part of a city-wide push. Beginning in 2018, Smart Dubai envisioned the launch of a blockchain-as-a-service (BaaS) platform that would enable startups to deliver services more effectively across the city. The full migration would then seek to be completed by 2020, a vision first detailed by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai, in October 2016. Aisha Bin Bishr, director general of Smart Dubai, a government office tasked with facilitating innovation in the emirate, adds:

“We have a very clear objective to make Dubai the capital of the blockchain industry. By 2020, we’ll have 100 percent of applicable government services and transactions happen on blockchain”.

The blockchain strategy has three main objectives: government efficiency, creating new specialised sectors, and achieving global leadership.

The Dubai Blockchain Strategy sees the Dubai government aim– among many objectives — to execute all of its transactions and place all of its documents on a blockchain by the year 2020. The ultimate goal? Dubai intends to become the world’s first city that runs on blockchain technology. The effort is now seeing wider recognition as The Smart Dubai Office was awarded for its Dubai Blockchain Strategy at the Smart Cities Expo and World Congress in Barcelona, beating competition from 308 other projects from 58 countries.

If you are still not convinced that the future is going to look more digitized and interconnected, look no further than Taipei. Taipei, Taiwan is seeking to become a smart city by utilizing the power of distributed ledger technology. The city has chosen to partner with IOTA, the inventors of the Tangle technology for the Internet of Things (IoT), to provide a number of new technology features for residents. The first project on the docket is the creation of citizen ID cards built on the Tangle technology. ‘TangleID’ cards, are designed to eliminate risks of identity theft and voter fraud, while at the same time providing a simple means for tracking health history and other data for government-related services.

The company is already working on a side project for the city to create a palm-sized card with sensors that would detect light, temperature, humidity and pollution. The design is intended to give the citizens of Taipei up-to-date information about pollution levels in real time. With all of these examples, it is quite evident that we are trending towards a new infrastructure of digitization and efficiency.

Why Blockchain Is The Perfect Fit For Smart-Cities

Incorporating blockchain into the development of smart cities will make it possible to have a cross-cutting platform that connects the cities’ different services, adding greater transparency and security to all processes. This technology can improve the following:

  • Government management
  • Urban planning
  • Sustainable transportation
  • Smart building
  • Public safety; and
  • The environment

All of which will underpin the collaborative economy and contribute to sustainability policies in the framework of smart cities. Many government records (laws, expenses, income, contracts, permits, properties, etc.) also correspond to other areas of service. With a blockchain record, they are naturally interconnected, reinforcing the value of cross-cutting coordination of the services.

Furthermore, in developing areas, blockchain offers a technology to establish this process, as one that is characterized as a neutral, non-hierarchical, accessible and secure information database, which is especially important in environments where there is currently no confidence among the actors. This makes it ideal for avoiding corruption and creating transparency in dealings with the government.

This might seem like a huge leap and complete rebuild in infrastrcture, but as El Kaissi of the Dubai government told the press:

“If we can address 10 to 15 experiences, not small services, and transform them via blockchain over the next two to three years, that would be huge.”

With all of that being said, blockchain as a technology will add major value to how smart cities are run on the back-end, which we won’t as visible on the surface level. As the blockchain and smart cities are independent projects, it is incredible timing to have these complimentary products being developed at similar times. Due to this great timing, the development of smart cities will be able to benefit from the secure and distributed nature of blockchain in the many aforementioned ways. In terms of timing, Rome wasn’t built in a day and nor will the smart-cities of tomorrow. Only time will tell how everything will unfold, but one thing is certain — we will be living in a very interesting future built off of the technology that we are watching grow before our very eyes.

Thanks to Briana Feng and Andy Walner

Justin Zipkin

Written by

Wolverine Blockchain

Michigan’s premier student-led organization dedicated to education and discussion around blockchain & distributed ledger technology. Previously Wolverine Crypto Trading.

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