Could blockchain be the operating system of the cities of the future?

Servers, of the sort which you might need for blockchain, maybe. Look this is quite hard to illustrate, okay? Image: Getty.

Many trends on the horizon offer opportunities that could transform our cities. From self-driving vehicles and the sharing economy through to cloud computing and blockchain technologies, each of these trends is quite significant on its own. But the convergence of their disruptive forces is what will create real value and drive innovations.

Take blockchain and the sharing economy as an example. Bringing these two forces together can potentially disrupt established companies like Uber and Airbnb. The success of these companies is largely due to their ability to make use of existing assets people owned, that had been paid for, but from which new value could be derived.

Effectively, these companies set up digital platforms that harnessed “excess capacity” and relied on other people to deliver the services.

The same applies to other so-called “sharing economy” companies that merely act as service aggregators and collect a cut off the top. In the process, they gather valuable data for further commercial gain.

But can this business model be challenged and enhanced for the benefit of those who are delivering the service and creating the real value? Can technology be used to bypass the third party and allow direct peer-to-peer collaboration within a distributed governance structure? What could a “peer-owned” and “peer-run” marketplace look like?

Blockchain technology could just be the answer.

What is different about blockchain?

You can think of blockchain as the second generation of the internet – a transformation from an internet of information to an internet of value.

Blockchain allows suppliers and consumers – even competitors – to share a decentralised digital ledger across a network of computers without the need for a central authority.

The assets that can be described on the blockchain can be financial, legal, physical or electronic. No single party has the power to tamper with the records – sophisticated algorithms keep everyone honest by ensuring data integrity and authentication of transactions.

Image: Zenobia Ahmed/The Conversation.

But the impacts of blockchain go well beyond financial services and transactions. Its real value is in establishing trust-based interactions and accelerating the transfer of governance from centralised institutions to distributed networks of peer-to-peer collaboration.

The impact can be profound: a centralised institution acting as intermediatory in a transaction of value is now at risk of being disrupted because the same service can be provided on the blockchain through peer-to-peer interaction.

Blockchain gives service providers a means to collaborate and derive a greater share of the value for themselves. Smart agents on a blockchain could do just about everything provided by a service aggregator.

The technology’s trust protocol allows autonomous associations to be formed and controlled by the same people who are creating the value. All revenues for services, minus overheads, would go to members, who also control the platform and make decisions. Trust is not established by third parties, but rather through an encrypted consensus enabled by smart coding.

The transformation has already begun

We already have examples of this technology in action.

Arcade City, a global community of peer-to-peer services, is planning to offer a ride-sharing service on the blockchain. To catch a ride, the user buys digital currency (known as tokens), creates an offer and commits funds for the ride. A driver claims the offer, matches the funds to signal their commitment to provide the service, and picks up the passenger. The blockchain releases the funds as soon as the user acknowledges completing the ride.

Arcade City has a city council, which will overlook the system for three years until it is fully decentralised and up and running.

The same concept of using distributed public record technology can be applied to a wide range of urban applications.

For example, an energy startup in Perth is looking to trial a peer-to-peer technology solution that would allow consumers to offer excess energy, available through their solar panels, on the blockchain. Clever code matches the suppliers with consumers without the need to go through the energy provider.


Still more questions than answers

The blockchain technology and ecosystem around it are evolving rapidly, and are probably raising more questions than answers. How do we establish a system of transparent governance to ensure the longevity of the blockchain? What about security, speed, cost and, more importantly, regulations?

As with other disruptive technologies, there will be winners and losers. If the technology is successfully managed for scalable growth, it could very well disrupt established norms and transform our societies. Large layers of data generated by consumers today, which are controlled by hubs, can become public. In a world driven by blockchain, consumers can monetise their own data to derive greater value.

By knowing when and how to take advantage of this technology, we have an opportunity to transform the digital platforms for tomorrow’s cities. The blockchain becomes the city’s operating system, invisible yet ubiquitous, improving citizens’ access to services, goods and economic opportunities.

Today, the technology is yet to mature. It remains to be seen if the expectations can live up to reality.

But, in many ways, this is quite reminiscent of the internet in the mid-1990s. Not many people would have predicted its significance back then. Had we understood the impacts of the internet 20 years ago, what could we have done differently to create more value?

That is where we stand today with blockchain. The power of this transformation will become more compelling as the hype settles down and we begin to unleash the possibilities.The Conversation

Hussein Dia is an associate professor at Swinburne University of Technology.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Brexit is an opportunity for cities to take back control

Leeds Town Hall. Image: Getty.

The Labour leader of Leeds City Council on the future of Britain’s cities.

As the negotiations about the shape of the UK’s exit from the EU continue, Britain’s most economically powerful cities outside London are arguing that the UK can be made stronger for Brexit – by allowing cities to “take back control” of service provision though new powers and freedoms

Core Cites UK, the representative voice of the cities at the centre of the ten largest economic areas outside London, has just launched an updated version of our green paper, ‘Invest Reform Trust’. The document calls for radical but deliverable proposals to allow cities to prepare for Brexit by boosting their productivity, and helping to rebalance the economy by supporting inclusive economic growth across the UK.

Despite representing areas responsible for a quarter of the UK’s economy and nearly a third of exports, city leaders have played little part in the development of the government’s approach to Brexit. Cities want a dialogue with the government on their Brexit plans and a new settlement which sees power passing from central government to local communities.

To help us deliver a Brexit that works for the UK’s cities, we are opening a dialogue with the EU Commission’s Chief Negotiator Michel Barnier to share our views of the Brexit process and what our cities want to achieve.

Most of the changes the Core Cities want to see can already be delivered by the UK. To address the fact that the productivity of UK cities lags behind competitors, we need to think differently and begin to address the structural problems in our economy before Brexit.

International evidence shows that cities which have the most control over taxes raised in their area tend to be the most productive.  The UK is significantly out of step with international competitors in the power given to cities and we are one of the most centralised countries in the world.  


Boosting the productivity of the UK’s Core Cities to the UK national average would increase the country’s national income by £70-£90bn a year. This would be a critical boost to the UK’s post-Brexit economic success.

Our green paper is clear that one-size fits all policy solutions simply can’t deal with the complexities of 21st century Britain. We need a place-based approach that looks at challenges and solutions in a different way, focused on the particular needs of local communities and local economies.

For example, our Core Cities face levels of unemployment higher than the national average, but also face shortages of skilled workers.  We need a more localised approach to skills, education and employment support with greater involvement from local democratic and business leaderships to deliver the skills to support growth in each area.

The UK will only make a success of Brexit if we are able to increase our international trade. Evidence shows city to city networks play an important role in boosting international trade.  The green paper calls for a new partnership with the Department of International trade to develop an Urban Trade programme across the UK’s cities and give cities more of a role in international trade missions.

To deliver economic growth that includes all areas of the UK, we also need to invest in our infrastructure. Not just our physical infrastructure of roads, rail telecommunications and so forth, but also our health, education and care infrastructure, ensuring that we are able to unlock the potential of our core assets, our people.

Whether you think that Brexit is a positive or a negative thing for the UK, it is clear that the process will be a challenging one.  Cities have a key role to play in delivering a good Brexit: one that sees local communities empowered and economic prosperity across all areas of the UK.

Cllr Judith Blake is leader of Leeds City Council.