May 1, 2018
Blockchain Cities and the Smart Cities Wheel
After having co-founded a few smart cities startups and consulting with Latin American governments on their smart cities strategies, I came to realize that noone had a shared definition of what a smart city was (one could argue that consensus is still lacking today). So in 2012, I set out to build a graphical model to reflect the key dimensions I felt were important to enable a holistic smart cities strategy. While the first version, published in Fast Company was quite ugly to the eyes, I was lucky to have a colleague with strong design skills create a more elegant version.
Fast forward several years and I am now co-founder of IoMob which is building a blockchain-powered Internet of Mobility (IoM) solution for smart cities. I have been reflecting a lot about what blockchain can do to help cities become smarter, but also more citizen-centric too.
It ocurred to me it could be a fun exercise to return to the original wheel and then identify emerging blockchain projects that can contribute to a city’s ability to succeed in each of the six main dimensions: smart economy, smart environment, smart government, smart living, smart mobility and smart people.
- Smart Economy
I am very intrigued by cities which are actively courting and embracing a blockchain startup ecosystem. In fact, at IoMob we have been actively researching urban blockchain ecosystems in an attempt to determine the best location for our ultimate incorporation and, thus, our legal and financial headquarters. Many cities are starting to embrace the idea of attracting blockchain startups. In fact this year’s Startup Genome report (which is one of the definitive global studies of entrepreneurial ecosystems) dedicated a special section to highlight the cities that are currently leading in attracting blockchain startups.
Aside from embracing blockchain startups and their resulting impact on local economies, how else can cities contribute to their economies through blockchain? At the moment, the city which seems to have done the most to embrace the potential of blockchain is Dubai who seeks to become the world’s first blockchain-powered city by 2020 with an astounding 20 such blockhain projects in the works. One of them aims to help attract tourists and reduce dramatically the time and cost of the paperwork associated with tourist visas as well as other internal city processes, with some estimates suggesting Dubai could save $1.5 billion annually from the blockchain transition. Of course some of that savings will be through eliminating jobs which will become “redundant” in the transition.
2. Smart Environment
A big topic in sustainability and smart cities circles has always been how to allow cities to be more autonomous with distributed renewable energy. There is growing interest in the decentralization and transparency benefits of blockchain in facilitating the production and distribution (and track of) locally produced renewable energy in cities. Vienna, long a smart cities pioneer, is also actively exploring use cases for blockchain in the renewable energy space:
The aim of the project is to make customers partners in the process of product development. For example, innovative energy tariffs, which have not been on the market before or new solar power models, are being tested. All this in connection with new technologies like blockchain. Ideas that prove themselves in practice could then be rolled out to other neighbourhoods as well.
Through the pilot project an end-to-end solution for blockchain systems in the e-economy is tested for the first time. Blockchain hardware, such as nodes and wallets, is to be integrated into existing energy infrastructure. This makes it possible to harmonize the services of all applications such as photovoltaic systems, electromobility and storage. Wien Energie has the opportunity to develop new business models and test solutions. Among other things, it examines how new electricity tariff models that use blockchain technology and are based on smart meters work from a customer’s point of view.
While this is not an endorsement as I have had no prior interaction with this project, Swytch is a blockchain project incorporated in Crypto Valley (Zug Switzerland) which has its eyes on this space. The Swytch white paper states the following:
(Swytch) will continue to roll out pilot programs on a staged basis. These pilots will be targeted at specific infrastructure development projects and innovative global “smart cities” and “maker cities” and the next generation of “crypto cities” to test the platform and APIs to support and reward the generation of sustainable energy within cities.
Candidate cities with whom we have initiated negotiations and are seeking to agree memoranda of understanding (“MOU”) include: Amsterdam, Barcelona, Seoul, Ansan, and selected others...The goal is to establish a process that creates strong incentives for cities to onboard citizens, agencies, and businesses — not only to generate Swytch Tokens, but also to be part of a “circular” economy based upon sustainable, abundant clean energy. Cities may also build up large reserves of Swytch Tokens to fund or stake local initiatives or take part in local “oracle” development to inform allocations.
3. Smart Government
I must admit I have been incredibly impressed by Estonia, the little country that could, in its amazing transition to becoming a fully digitized, and blockchain-powered government. Their e-residency program is a first of its kind. Leveraging blockchain technology, Estonia, has created a blokchain-based identity system for citizens to digitally sign documents via their blockchain-based ID cards, access health records and even vote. Furthemore citizens can control which data they authorize access to. However, this nation took all this a step further. In an effort to appeal to the global digital and blockchain entrepreneurial community, Estonia created their e-residency program to allow any citizen of any country in the world to establish e-residency and to then found a digital company in Estonia, without ever setting foot in Estonia. In fact my company, IoMob is currently incorporated in Estonia, as all three of the founders opted to become Estonian e-residents. While Estonia is a country, not a city, its small size and population of just 1.3 million, equates it in many cases to a city-state with Tallinn, the capital nearing 50% of the country’s population.
Another aspect of smart government where blockchain is instrumental is in changing democracy in cities. pia mancini has been one of the pioneers in promoting the adoption of liquid democracy in cities whereby citizens could have the right to vote on regular city council matters, not just once every four years in what some refer to as continuous democracy. But furthermore, citizens could choose to delegate their vote on certain matters that are not within their core area of expertise. For example, if you were foolish enough to believe after reading this post that I am an expert on smart cities and you share my views about what our city needs to do, than you could choose to delegate your vote on any smart cities matter to me. Turns out a candidate in San Francisco, David Ernst is fully committed to liquid democracy and built United.vote to support its implementation.
4. Smart Living
The ultimate objective of a smart city and a blockchain city should be to increase the quality of life and happiness of its citizens. Blockchain can definitely play a role in this objective. Returning to Dubai, the city has embraced the potential of blockchain to support citizens in improving the efficiency of the healthcare system and ultimate to patient outcomes. Here is a great paper detailing all of the benefits and downstream impacts of transitioning Dubai’s healthcare system to be run on blockchain technology. In summary, the author Julia Kong addresses how blockchain will help Dubai streamline a range of processes, eliminating paperwork, accelerating information and service delivery, empowering patients with real-time and ubiqutious access to their health status, and supporting interoperability with fitness trackers, etc.
While I have yet to find many solid projects yet, another smart living opportunity with blockchain relates to citizen safety and transparency of policing. For example, some have suggested body cam footage could be immediately recorded in blockchain, reducing the risk of fraud in police coverups because the ledgers could indicate the precise moment a change was made to a video. Apparently a startup in Boston aims to leverage blockchain tech to enable police departments across a city to have real-time access to all relevant crime data regardless of which precinct initially recorded it.
5. Smart Mobility
As I have co-founded a blockhain startup in the smart mobility space this will come as no surprise I have a great startup example to share with you :) There is no doubting that the world is moving towards some form of aggregation of diverse public and private mobility services in urban areas. Instead of having dozens of competing shared mobility services in a city all building their own tech and all competing to build their own network effect, which offers a fragmented and efficient mobility experience for residents and visitors, cities are starting to embrace some form of multi-modal mobility on demand.
While most of these models are focused on the proprietary, and extractive approaches of Web 2.0, we at IoMob are convinced that the ultimate benefits to cities, citizens and innovators will be to embrace decentralized blockchain, web 3.0 approaches to intermodal mobility solutions. Blockchain will allow for more resilience to shocks to the system (from weather events or sudden peak demand events), democratizing access to network effects for mobility startups (even allowing for a single taxi driver sole proprietor, for example, to plug into the protocol and be visible to nearby passengers), and support something yet unseen, decentralized Mobility as a Service (dMaaS). At IoMob we are embracing the idea of a blockchain-powered Internet of Mobility (IoM) whereby all members of the urban mobility ecosystem can operate in an open marketplace and with smart contracts, trust that payments between providers will be completed, all while radically improving the efficiency of intermodal mobility on demand and Mobility as a Service.
6. Smart People
In recent years, it has become commonplace in smart cities conferences to hear conversations about how important it is for smart cities to have smart people. I fully agree with this assessment although how to measure smart people is controversial. One area of fascination for the smart cities movement has been the emergence of the maker movement. There is a growing understanding that the maker community in cities may become increasingly important and may provide an inclusive economic and educational experience for a broader range of the population who will likely have fewer traditional employment opportunities in the face of automation, AI, robotics, and other industry 4.0 technologies. Furthermore the maker cities movement, embodied by the Fab Cities movement which aims to support cities in a transition to the local production of energy, food, products and other things consumed locally while remaining digitally connected to the global community. Of course blockchain has obvious potential use cases for the global sharing of digitally produced content including digital files for 3D printing.
In Barcelona, where the Fab Cities movement began, Tomas Diez, the founder of Barcelona’s first Fab Lab, is working on an ambitious blockchain project. I reached out to him so he could explain in his own words what they are trying to build:
Enabling local processes of production to reduce the impact of the current industrial globalisation is crucial, but enabling mechanisms to incentivise, accelerate and scale this process is fundamental and urgent. This is where we propose the use of a local blockchain, that could be articulated between stakeholders in cities that are already contributing to a paradigm shift in terms of recycling, reuse, relocalisation of supply chains, and other practices that reduce the impact of the linear economy. This local approach will be globally synchronized and confederated with other cities that are part of Fab City project, and other follower cities.
Under the Fab Chain model, the makerspace or fab lab could make machines, spaces and resources that are not being used available under specific conditions dictated by a smart contract. The maker space could decide, for instance, to exchange machine use for space use, or to trade the use of its own machines with the use of other machines or services provided by other players within the ecosystem; it could exchange the use of the machines with access to a particular set of expertise, or perhaps simply exchange it for a particular amount of meals in the restaurant. When the two parties agree, they can code the terms in a smart contract to establish a public, anonymous and protected execution of a commercial relationship. The smart contract can establish the conditions of the commercial agreement in the blockchain, to ensure the automatic execution of the terms without the need for any third party enforcement authority…
By introducing blockchain-based tokens that can be used interchangeably for different products and services within the Fab City ecosystem, we create a positive feedback loop, a form of “coopetition” whereby everyone has an incentive to promote and contribute to the ecosystem, because the higher the value of the products or services it provides, the higher the value of these tokens will be.
While the early days of 3D printing have been mostly dominated by engineers and those with advanced degrees, as this technology becomes more accessible, there will be a growing amount of opportunities for children in schools, adults looking to retrain themselves and even senior citizens to join the maker cities movement. In Barcelona, for example, there is a whole network of maker spaces (called Ateneus) focused on inclusive access to 21st century maker skills.
Conclusion
As the smart cities space has evolved from technology-driven (smart cities 1.0), to technology enabled, city-led (2.0) and to citizen co-creation (3.0), the potential for blockchain to power smart cities in a way that is more decentralized, empowers citizens, and, in the words of Barcelona’s CIO, Francesca Bria remove proprietary software from the likes of Bill Gates and transition towards open-sourced solutions is becoming realized. Dubai has staked a claim as the world’s first blockchain-powered city and I believe they are well on their way. The question now, is which cities will follow their lead and how can the global blockchain community play an instrumental role in this transition.
