Banking at present has significant application for blockchain technology. However, there is potential for it to go way beyond the financial sector. As the world of distributed ledger technology grows, so do discussions around its utility in other sectors; for instance, how it can be applied to areas such as engineering.
Before any action takes place, the need for implementing a whole new technology over simply improving current technology needs to be assessed. Since engineering is so different to the financial industry, in the sense that it deals with significantly more ambiguity than finance, which is focused on the transaction of value, how does blockchain offer a better technology? How does blockchain plan to deal with the contracting process? How does it plan to deal with insurance policies? Finally, how does it benefit the engineering profession?
Firstly, execution of contracts. The process of construction consists of a long and complicated series of events that all must be contracted, negotiated, ordered in time and verified in a secure way whilst also prompting payments to stakeholders. Types of contracts used in the engineering industry such as Fixed Fee/Lump Sum, Cost Plus and Unit Price contracts are a time-consuming and costly process. If this was automated using blockchain technology, there would be an efficient and simple way to exchange contracts that would save money and significantly reduce the amount of paper used in the contracting process. Because of the immutable nature of the blockchain, there is an audit trail of secure contracts that can’t be tampered with and are forever stored in that location. Additionally, since the signature and stamp of a professional engineer are used to establish a trail of responsibility in an engineering project, a professional engineers stamp could be cryptographically hashed, which would authorises them to open and close relevant contracts on the blockchain. This verification tool will also allow for authorisation of project proposals made by other professional engineers, essentially automating the paper-heavy process.
Furthermore, ‘Oracle contracts’ have been developed based on the idea of smart contracts. ‘Smart contracts’ themselves, can only make decisions based off assessing digital data. ‘Adjudicated smart contracts’, on the other hand, have an added individual to judge and make decisions in physical space that can’t be based only off digital data and deal with significant ambiguity in relation to the facts being observed. The ‘Oracle contract’ has the extra assurance that the adjudicator is the best person for their role, therefore meeting insurability requirements. This further emphasises safety and security of the decision and clearly outlines the ways in which blockchain can develop the standard of contract systems in engineering at present.
Secondly, keeping track of data. Bruce Cahan, a consulting professor at Stanford’s Civil and Environmental Engineering Department in the School of Engineering, is leading a project that collects lifecycle data and quality-of-life measures for construction projects using blockchain technology. Blockchain is used to reduce the volatility in pricing, maintenance, fiscal history and therefore, property valuation. During the lifecycle of a building, the design and construction records become part of a set of documents that describe the asset. Keeping track of all this data is prohibitively expensive and time consuming with current database structures. A lack of data for an asset lowers its value. Therefore, blockchain technology would resolve this issue as it provides a simpler, immutable and decentralised data storage platform for records such as these.
With these aspects considered, it can be concluded that engineering is a new field in which blockchain technology can potentially be implemented. It has been clearly stated that applying the technology would be beneficial to professional engineers as it would increase cost-efficiency and simplicity by reducing time, cost and manual efforts of particular processes that were previously predominantly paper-based in nature.