Blockchain is a much-discussed but little-understood technology, at least for the general public. Professionals in many sectors, such as construction, have a deep understanding of blockchain and its capabilities, however, and the software is becoming standard for modern construction applications. Let us quickly examine what blockchain technology is and why it works for construction projects.
What Is Blockchain Technology?
At its core, blockchain technology offers a secure way to store data. Every data block added to a blockchain password-protects every previous block, making hacking effectively impossible. Blockchain technology does not rely on servers, such as those operated by Facebook and Google, from which data can be easily stolen. Bitcoin uses blockchain technology to store financial transaction records, but any data can be kept this way. The tech has many other characteristics, but these alone make it perfect to use for transferring contracts, storing data, facilitating exchange, and more.
Why Blockchain Works for Construction
Construction projects are complex. Project managers must work with financiers, contractors, tenants, buyers, and agents of all kinds. Recently, the data of these collaborations have been stored on servers and within vulnerable applications such as email. By bringing all of this data into the blockchain, nothing is lost, and nothing can be stolen. It removes endless guesswork and miscommunication from the system – either the contract was delivered to the chain, or it was not.
Blockchain systems have been called “trustless,” as users do not have to “trust” that an action has been completed by a collaborator. In blockchain apps for the construction industry, all steps in the building process can be absolutely “known” to have occurred or not, because there is no way to game a blockchain system like one could with server-based or cloud-based models.
Propy’s Transaction Management Platform has demonstrated how blockchain can bring new efficiency and security to the real estate space. Within a single platform, all contracts, communications, and financial transactions can be facilitated between all parties. Through the Propy platform, several properties have already been bought and sold in California and other locations. With so many opportunities, it is only a matter of time before this useful technology changes the real estate construction industry.