How Blockchain Empower Smart City

Two of the key reasons why smart cities are garnering so much attention are the rise of societal concerns linked with increased urbanization and the growing need to decrease public budgets. The number of cities with populations of 10 million or more is predicted to rise from 33 to 43 between 2018 and 2030, according to the United Nations. While urbanization is supposed to deliver significant economic strength due to population and industrial concentration, it also has drawbacks, such as increasing congestion and environmental difficulties.

Expectations for smarter cities are rising, and the economic downturn induced by COVID-19 necessitates more efficient municipal administration than ever before. The smart city market, which includes energy, healthcare, and security, is predicted to increase at a 23% yearly rate between 2020 and 2024, totaling nearly $2.1 trillion.

Advanced technology, such as blockchain, can help to solve these societal difficulties and achieve effective urban management. Without the need for a single administrator, blockchain enables network participants to exchange data with high reliability and transparency. Cities have many stakeholders, and data interchange among stakeholders is critical for providing extremely convenient urban services.

For this data exchange, blockchain is planned to be employed. For example, Smart Dubai, which aims to make Dubai the happiest and smartest city in the world, is creating blockchain use cases across a variety of industries, including finance, education, and transportation. For example, a blockchain-based project is underway to streamline enrollment procedures for students traveling between emirates.

It is critical to note that having autonomous smart cities is insufficient for smart cities to contribute to societal challenges and run efficiently while enhancing service quality. Rather, ensuring interoperability and coordination among multiple smart cities is critical. Some efforts are already being made to reach this goal. In Japan, the cabinet office issued a white paper on smart city reference design in March 2020, citing interoperability as one of four essential concepts vital in fostering smart cities.

The World Economic Forum serves as the secretariat for the G20 Global Smart Cities Alliance, which brings together municipal, regional, and national governments, private-sector partners, and city residents around a shared set of core guiding principles for the implementation of smart city technologies, such as openness and interoperability.

Smart contracts, which are computer protocols that enable self-executing, believable, and transparent transactions, may be used for transport tickets at the platform layer. However, because different blockchain systems employ different languages for smart contracts, interoperability difficulties for ticketing may need to be handled. Because permissioned blockchains (those with an access control layer that allows certain actions to be performed only by specific identifiable participants) are typically used for data exchange across multiple transportation systems, the presence of proprietary components may pose a challenge in achieving interoperability at the infrastructure layer.

Other industries, such as real estate and energy, could benefit from a similar strategy. There are initiatives in the real estate sector to use blockchain to streamline property rent operations, however in order to streamline the moving process, the procedures connected to the original dwelling and the new residence must be coordinated and processed. In this circumstance, applications on various blockchains may need to communicate with one another. Efforts are being made in the energy sector to use blockchain to perform energy transactions within a region.