Construction is as important as any other industry. Yet the progress of construction is little slow. This is because in construction the perception is that implementing a new technology incurs cost and fear of that fact what if the technology does not support the construction operations. This industry faces a lot of challenges in terms of supply, demand, resource allocation, data transfer, record keeping, logistics, etc. Can blockchain technology in construction industry do wonders?
Blockchain Technology in Construction Industry
The existing challenges faced by construction industry have the tendency to delay the construction process even further. Construction industry is known to embrace changes very slowly. Blockchain technology in construction industry can bring the value that this industry misses. It also makes sure that the funds are transferred successfully. Thus, allowing the project to be efficient.
Blockchain-based construction contracts can make sure that the quality of the construction is top notch. This is possible with blockchain because it provides transparency, unrestricted and unlimited access to data and smooth transfers of funds. There is no wait time to get approvals and no network problem in fund transfers. This, in all, increases the efficiency of the construction project.
Benefits of Blockchain Technology in Construction Industry
Let us understand how enterprise blockchain development can help transform construction industry for better.
Construction projects can run for years and years. And hence, in construction industry cultivating the trust among the owner, stakeholder and constructor has always been an issue. This is because of the lag in work by any of one of the parties involved or delay in funds transfer or not accomplishing all set standards according to the agreement made. This might be due to various reasons like technological issues such as improper network or the person with the responsibility did not perform the given task. Since there is a lack of trust, the efficiency of the project downgrades too. Blockchain can help overcome this challenge with smart contracts.
Smart contracts are digitally verifiable agreements that is made by parties involved in a particular transaction or operation. The agreement is digitally made and the set standards cannot be changed as it operates and is stored in a decentralised network. With smart contracts the construction company can identify who is responsible for what and the status of the operation. As a reason, the assets can be tracked and made sure that they are not misused and used at the right time and place.
This helps the supply chain to a great extent and supply chain is one of the important tasks to be accomplished in construction.
For example, if a construction project requires steel and the supply has not been made, then with the help of blockchain the supply can be met easily by identifying local vendors.
This is can also be overcome by tracking the original supplier with the help or smart contract and making sure the demand is met effectively. In simple words, with smart contract, the whole process of every operation taking place becomes visible to everyone.
Digital ledger system
There is no central authority monitoring over the operations and transactions taking place. Thus for all verifications needed, the process is automatic and much faster than ever before. You no longer need a middle party to approve or verify. This increases the materials required for construction and funds needed to supply or support demand take place at a faster rate. Thus, allowing the project to complete successfully soon as well as completing it efficiently.
Blockchain operates by storing data digitally on a decentralized network. Hence, accessing information is easier and can be done from anyplace, anytime. One of the important perks of using blockchain in construction is that, no one can manipulate any data or misinform or change data.
This is because the decentralized network cannot be changed once something is fed in the system. The whole network hast to be changed in order to change something, thus all the data entered becomes honest and adds value to it making it a quality data.
Giving certification for evidence of proof for a particular data existence and maintaining a quality administration with blockchain by eliminating threats is another benefit.
Blockchain Technology Can Help Construction Sector, Hype or reality?
Companies like china construction bank, industrial and commercial bank of china uses blockchain to provide borderless financial benefits to many industries including construction.
This industry might require a little bit more of push to upgrade and update to the new technology changes and trends. They might require to be taught about what is blockchain and how it can help overcome their challenges and hurdles. There are more than one too many management and legal factors that can be supported by blockchain. With the help of blockchain, the opportunities to create a new market and complete a new project with efficiency is high. This reduces the costs, cultivates transparency between all users which adds value to the scope of the project.
Since the blockchain technology is new and still exploring its own markets, the construction industry might perceive the support of blockchain just to be a hype. But in reality, blockchain can make the operations more feasible and opportunistic. Blockchain potential is being realised and made aware to all construction sectors today. They realise the importance of smart contract and how it can make the operations much faster.
It is safe to say that today, blockchain technology in construction industry is not a hype. And, it is a reality which can help the construction sector breakdown obstacles and complete their projects successfully.