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Blockchain for Smart Cities: 10+Practical Use Cases

  • 7 November 2018
  • Sam Mire

The modern smart city already constitutes a massive web of interconnected technologies, and that web is expected to grow rapidly, with Gartner projecting that 9.7 billion IoT devices will make up the typical smart city by 2020. This includes 10% of smart cities using streetlights as wide area networks to connect computing devices, the result being an unprecedented collection of data that must be protected from hacks and leaks.

The introduction of technology doesn’t stop in the streets, as 30% of ambient care applications in smart cities, including medical care, are expected to have robotics and smart machines introduced into nursing operations by 2030. This introduction of some of our most sensitive data into the Internet of Things is one of the primary aims of smart cities, which means that securing that data is of the utmost importance. With 1.3 million people moving into urban environments daily and 65% of the world’s population expected to live in cities by 2040, concerns about what these cities will look like and how contingencies will be planned for are indeed legitimate.

The blockchain is not only a platform on which the mass of new data derived from smart cities can be safely stored and accessed by those who should have access to it. The chain also may serve as the interoperable platform that gives residents of smart cities greater say in the decisions affecting their hyper-local communities, from budgeting to elections, etc. It may also serve as a reputation management tool, as these cities tend to be chock-full of citizens who demand a certain standard from individuals and businesses when it comes to communal and environmental care.

Blockchain for smart cities - Practical use cases


Universal ID Cards

Blockchain use cases in smart cities - Practical use cases - Universal ID Cards

A universal ID may sound a bit dystopian at first, but the term simply denotes a more convenient way of storing the information that makes us who we are within a single entity. Countless scenarios require us to prove that we are who we are, which in turn means we spend far too much time scrounging up our personal identifiers time and again. A single, easily verifiable method by which we can prove that we are who we say we are would be an invaluable time and effort saver, and the interoperability of the blockchain increases the odds that such a system is plausible. The security aspect of the blockchain is also a critical component of such a system which, if it were hacked, would be a treasure trove for identity thieves.

Companies Trying to Solve This Problem

  • Civic  Self-Sovereign and secure identity solutions. 

Prioritizing Local Commerce

Blockchain use cases in smart cities - Practical use cases - Prioritizing Local Commerce

Smart cities are all about local. Providing both essential and non-essential services in close proximity to one’s residence and place of work means that means of travel promoted in smart cities — bikes, buses, ride sharing, really anything but individual vehicles — become more reasonable. Part of this vision includes establishing a uniqueness of neighborhoods within these cities, eschewing nationwide and chain brands for local ownership. Some are establishing platforms on the blockchain by which local business leaders and residents can communicate, file complaints, give rave reviews, or share general musings about how the local business climate could be improved. 


Land, Property and Housing Management

Blockchain use cases in smart cities - Practical use cases - Land, Property, & Housing Management

The highly localized nature of smart cities means that mixed use neighborhoods and buildings will be the norm, not the exception. In order to make informed decisions about where one should live, work, shop, etc., an easily accessible record of land and property usage rights would be extremely helpful. Such an interoperable, blockchain-based system could also speed up the permit issuance process, as it would serve as an authoritative record to be referred to when granting or denying permissions. 


Energy / Water / Pollution Management

Blockchain use cases in smart cities - Practical use cases - Energy, Water & Pollution Management

Naturally, smart cities prioritize renewable energy, conservative water usage, and pollution mitigation. Data about each of these could be stored on an interoperable, regularly updated record by which businesses would be held accountable for their practices with respect to these considerations. This system could also be employed on the neighborhood and individual levels — not to shame, but to make people aware of their own usage and consumption patterns so that they may react accordingly. 

Companies Trying to Solve This Problem

  • LO3 Energy – Blockchain powered smart meter to help monitor utilities usage and distribution. 

Improving Public Transit

Blockchain use cases in smart cities - Practical use cases - Improving Public Transit

In 2016, 7.6 million workers got to their jobs using public transit. In 2015, 58.6 billion total passenger miles were logged on the railways, buses, and other forms of public transport, a significant increase over the 49.7 billion miles logged ten years prior. 31 new railway systems were added during that same ten-year interval, and in 2015, $65.05 billion was dished out for public transport-related expenses. Public transit ridership has increased 26% over the past 20 years, and the emergence of more smart cities and their highly localized economies has been predicted to incentivize greater reliance on public transit.

The blockchain has been proposed as a single point of payment for the various types of public transport, including bus, train, and subway tickets, with the possibility that payment for ridesharing services could be included. The uniformity of the platform would plausibly allow the pre-loading of funds on a card, and a person who utilized both a train ride and a Lyft on the same trip could pay via a single transaction. More uses for the blockchain in public transport are almost certain to arise. 

Companies Trying to Solve This Problem


Interoperability for Smart Devices

Blockchain use cases in smart cities - Practical use cases - Interoperability for Smart Devices

Interoperability is an essential feature of smart devices, with 75% of surveyed consumers stating that it is essential that their smart devices used within the home connect seamlessly to other products in their home electronic network. Currently, 32% of U.S. households with access to broadband own at least one smart connected device, and over half plan to purchase one in the coming year. Brand loyalty is less important to consumers than the demand for an interoperable network of smart devices, and with only 22–23% of households currently controlling their many devices from a single point, there is plenty of room for improvement for the interoperability of smart home-connected gadgets. The blockchain represents a single platform upon which a very smart individual or company will create a secure, interoperable control system for the massive and growing web of smart devices. 

Companies Trying to Solve This Problem

  • Chain of Things – Bridging the gap between blockchain and IoT hardware interoperability. 

Security for IoT Devices

Blockchain use cases in smart cities - Practical use cases - Security for IoT Devices

The global cost of cybersecurity crime is anticipated to hit $6 trillion by 2021, and the heightened interconnectivity of devices comprising the Internet of Things in smart cities could make this damage exponential in nature. That’s why 47% of IoT developers cite security as their primary concern, and IoT security spending is expected to increase by at least 73% by 2019.

The quandary at hand is quite simple: the more data we collect, the more difficult it becomes to secure the ever-growing store of potentially sensitive information. Because a hacker has to compromise 51% of the cryptographic systems to overcome the hashing power securing a blockchain framework, the effort and computing power required is often not worth the trouble for bad actors. Considering the sheer amount of data that will be utilized by IT systems in smart cities, this data gold mine — and potentially city-crippling vulnerability — must be protected by a technology worthy of these high stakes: the blockchain.

Companies Trying to Solve This Problem


Rewarding Citizenship

Blockchain use cases in smart cities - Practical use cases - Rewarding Citizenship

10 percent of all children and 15 percent of poor children in the United States live in mixed status families, meaning that proactive, outside-the-box solutions to solving an immigration and legal status debate currently lacking nuance should be welcomed. Though refugee families are one non-citizen demographic protected by the welfare system, the 1996 attempt at “reform” led to declines in refugee benefit participation, including a 53% drop in food stamps, a 78% drop in the use of temporary assistance for needy families (TANF), and a 36% decline in Medicaid.

Quite simply, the reforms had seriously negative unintended consequences, so some are looking to the blockchain as a new, incentive-driven approach to attaining citizenship. Programs in which citizens can trade data about themselves and their needs are being launched to cater smart cities to the lives of their citizens. These programs also require strong personal identification aspects, meaning that presumably only citizens would dictate which projects are undertaken. This say in community projects may serve as a carrot that many non-citizens may eventually covet, deciding that a path to citizenship is worthwhile. 

Companies Trying to Solve This Problem

  • DECODE – EU project exploring ways to empower citizens to exercise control over their data.  

Urban Planning

Blockchain use cases in smart cities - Practical use cases - Urban Planning

With 35,310 estimated employees populating the urban, community, and regional planning workforce and an average annual wage of $74,000 for those planners, the costs of publicly-employed planners can become staggering. Particularly in coastal cities, where the greatest concentration of planners operate, the cost of employing a single planner — typically a tax burden felt by local and state residents — is nothing short of exorbitant. San Francisco leads the way in annual wage for a planner, shelling out an average of $104,820 for their services. San Jose ($103,710), Anaheim ($102,670), Los Angeles ($94,530), Washington, D.C. ($87,900), Seattle ($87,710), and the New York–New Jersey urban center ($82,750) are all cities where the cost of urban planning carries a hefty tab.

The possibility of blockchain technology reducing the administrative costs associated with urban planning could be an immense point of savings for cities. And ultimately blockchain technology could foster greater community participation through secure, easily-accessible voting systems pertaining to urban and regional planning decisions. 


Departamental Transparency

Blockchain use cases in smart cities - Practical use cases - Departmental Transparency

While 37% of internet users report using the Web to find information about their federal government, just 5% say that their government is effective in sharing information with the public. However, 66% of American respondents held hope that a greater network of open data will improve government accountability. Meanwhile, nations such as Dubai are working on implementing the blockchain to provide greater insight into government processes.

Information to which the voting public should be privy — funding and grant details, municipal budget decisions, new taxes, etc. — could be logged on the blockchain and made accessible through widely accessible apps. A single source of secure, verified information would eliminate much of the confusion and misinformation that arises from the current system of information disseminated via the internet.

Companies Trying to Solve This Problem


Universal Data Storage Platforms

Blockchain use cases in smart cities - Universal Data Storage Platforms

Data storage has come a long, long way since the IBM 350 disk storage unit, which weighed about a ton, was 68 inches tall and 29 inches wide, had to be transported with a forklift, and stored only 5 megabytes, which was cutting edge for its time. Today, terabytes that weigh barely a pound can hold 1 million megabytes. But what we have gained in terms of convenience and storage capacity has come at a cost — namely, security. The average cost of a data breach for a U.S. enterprise in 2017 was $1.3 million, and $117,000 for small and medium-sized businesses.

Nearly 5 million data records are lost or stolen everyday, constituting 58 data records every second. The confluence of data that will be collected and interlinked in smart cities — sensor data, smart grid data, smart vehicle data, etc. — cannot be compromised by being stored on a centralized, easily assailable data hub. The blockchain serves as the only suitable option to provide both interoperability and security to a universal data storage platform catered to life in smart cities.

Companies Trying to Solve This Problem


Keyless Signature Interface (KSI) for Hosting Government Services and Records

Blockchain use cases in smart cities - Keyless Signature Interface

In 2016, there were 30,899 information security incidents pertaining to the breach of government data, 16 of which qualified as major incidents. Incidents included the breach of a Navy contractor’s laptop, resulting in 134,386 current and former sailors’ social security numbers being compromised, and similar instances abound.

Keyless Signature Interface, or KSI, is a form of blockchain established in Estonia and put to use by the Estonian government. It provides permanent records of timestamping that render the data immutable, whether attempts are made by hackers or system administrators. This means a high level of transparency and permanence for government records, which is a valuable asset in any setting where government accountability is required, including smart cities. The combination of data accuracy, permanence, and privacy — the system is not vulnerable to passkey theft or mismanagement, as other blockchains can be — make it a logical means of storage for health records, land permits, court records, and all other government-related records that will be necessary in order to maximize the potential of smart communities.

Companies Trying to Solve This Problem

  • Guardtime  Implementing keyless signature infrastructure for federal and local agencies. 
About Sam Mire

Data journalist and market research analyst focused on emerging technology, trends, and ideas.

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