Blockchain, Crypto & Smarter Buildings  - any synergies?

Nicolas Waern "The Building Whisperer" https://www.linkedin.com/in/nicolaswaern/ https://twitter.com/BuildWhisperer Contributing Editor

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I am writing this at the airport in Palma de Mallorca after 2 days of conferencing, learning about new exciting technologies, business models and how wonderful it is to network with new and exciting people! It’s in the cross-sections of disciplines where the innovations happen!

What is blockchain, and why is it important?

“Blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data”. [Wikipedia]

One of the more famous applications built on blockchain technology is the phenomenon Bitcoin which has grown, as well as faded in (mainstream) popularity in the last 5 years. It is a so-called Cryptocurrency.

“A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrency is a kind of digital currency, virtual currency or alternative currency”. [Wikipedia]

I first came in contact with Bitcoin during my studies at HSG St Gallen in Switzerland 7 years ago. A friend of mine wanted to write a thesis about this alternative kind of digital currency which only existed in a network of peers. It was a so-called decentralized currency where the power was allegedly in the hands of the people instead of large banks and institutions, also potentially avoiding steep fees and delays. You had the coins in digital wallets, and you could exchange them for money at exchanges, and that’s about it. During that time, I remember that 1 Bitcoin was worth about $15-20. And in May 2017, one Bitcoin was worth almost $20 000…

Quite a dramatic change. But according to the latest figures, the interpretation can be made that it’s less mainstream, but the trading volumes are up again to all-time highs. And it seems to be very similar to the work done in almost every other industry today in the sense that almost everything is mainly done in silos. The potential of industry-specific technologies are nowhere near what it could be, nor should be.

“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.” – Thomas Carper, US-Senator

And the block-ledger technology seems to have an additional important role except for just the underlying technology for cryptocurrency. It even might be applicable for smart building applications. But how? And perhaps more importantly, why?

Re-thinking value

First, let’s continue with the notion of a new form of currency that is introduced by a company. Think of it like member-only discounts. Imagine if Amazon should come out with a new sort of currency that would allow all of their customer to buy everything at a 10% rebate instead of using the US Dollar.

“An Amazon cryptocurrency wouldn’t just change the face of the world’s largest online retailer. It would change the world” Sam Town - Cryptobriefing

The block-chain technology is not really meant for people, it’s meant for machines. Right now, the currency is separated from the inner workings of the supply chain, and the monetary exchange only happens during the Point of Sale. If the Amazon Coin would come into fruition, then customers would immediately be integrated to their supply chain which most likely would allow customers to receive orders swiftly, with greater transparency. And it would also mean that goods were priced at the same price independent of local currencies and fluctuations.

The decentralised perspective and the possibilities for ownership of the ones in the block-chain allows for some interesting use cases. One of the most interesting ones were from Craft Beer Coin:

What they have done is that they have “introduced a new currency backed by the world’s oldest commodity – beer.”  And what does this have to do with smart buildings?

Driving adoption through new technologies

The whole building automation market is quite in a world of its own, and there’s no real marketplace for market comparisons as far as I know. And most of the products are still tied hard to manufacturers leaving very little to the imagination if any.

What a blockchain-based approach could mean is that it could radically open up the market and put the products in the hands of the users. For instance, let’s say a company like Contemporary Controls with their BASpi would introduce a BASPI-Coin, Conectric-Coin, Envio-Coin or Go-IoT with their Dingo or Digital twin companies like Zynka - basically anyone with a product that they want to get out.

Customers would buy coins that could immediately be converted into purchases that are 25% off market price, and it would also enable customers to become shareholders in the company. Either holding the coins themselves in the hopes of a bullish trend, wanting to take part in opening the BAS-business, or just exchange them for edge-gateways or DT’s at a reduced price. All the components, where the product is, when it will be delivered, all of this will be extremely transparent as well as pricing of the product.

This might sound a bit far-fetched, but it is happening right now in other industries. And it could work in getting adoption of new products out to a market that wants it, or at least needs it.

A path to value creation based on the Craft Beer Coin model

Taking a look at some of the underlying assumptions from the Craft Coin Company (CCC) pitch deck, and we’ll see if this could be relevant to smarter buildings and more sustainable cities.

Successful craft breweries need capital to expand

• High costs and inability to raise capital, often lead to selling out
• This leads to the destruction of the craft beer movement

Financing through the craft beer coin is the solution

• Breweries support the distribution to their clients
• Beer lovers buy beer with the coin and support the breweries
• Breweries give equity against financing for growth to the company
  

Additional benefits

The Craft Coin Company is registered in Malta. And as such, the Maltese Government and CCC have teamed up to ensure that the investment in CCC contributes to the EU residency and citizenship application.

Now read this again but switch breweries to new companies and products that want to make the world a better place through open-systems and ecosystems-thinking.

This approach could also be used in other industries.

• “Asset-backed”- coins enable digital business ecospheres to leverage modern distributed ledger technologies
• Facilitate transactions around real products, with a value understood by everyone

Would you want to be a part of a company that has great products that fulfil your needs, and extend the relationship of buyer-supplier to something more? Maybe even get some additional benefits that you can’t get anywhere else?

I know I would!

A lego world where all pieces come into play

It’s always interesting to talk to new people and find out new things on how to view the world. All of these insights into new tech is like building blocks that you have to put together for them to make sense. And sometimes, maybe even most of the times, we like to play with the Lego blocks we understand and are the shiniest to us.

After having listened to the talks in Mallorca, in and between presentations, I understand more. But far from all. What was interesting on the crypto side of things was the focus that it had to become more mainstream in order to... become more mainstream. I heard that in at least 4-5 talks. Both from the UI/UX side of things but in general that it needed a broader fan base. This is similar to IoT, wireless, digital twins, smart grid and all the “new” stuff that is trying to find its way.

I think the underlying tech of blockchain holds interesting avenues of innovation if it can be thought of as, yet another tool/technology fit for some use cases and be partnered up with other modern Lego blocks.

Could this be interesting for the building automation community? Yes, I think so.

Will it happen? If it doesn't happen by itself (nothing will) then I or someone in my network will make it happen. Speeding up the time to value creation and democratizing innovation at a global scale, that’s what I’m all about after all. But even if it doesn’t happen, it might lead to some additional insights that might lead to something!

If you have any questions on what you can offer to the world, or what the world can offer to you, reach out. And as always, just go out there and start something new!

Sincerely,
/The Building Whisperer