Though blockchain technology may be beneficial, the engineering industry is yet to embrace it like finance or even the supply chain world. Its complexity has seemed to discourage the necessary change that it would bring if it were implemented in the engineering world. This piece will help to unravel the possible impacts of blockchain in engineering.
Use Cases of Blockchain in Engineering
- Efficient Procurement
A key principle of blockchain is transparency. Procurement is an important aspect for engineering firms, and may easily be exploited if controls are not put in place. With blockchain, the risks linked to procurement are reduced because the identity of those bidding to supply products to the firm won’t be hidden. It is easy to review the records of previous procurement, find out those that authorized the purchase, and much more.
- Seamless Interaction
Before a typical project is completed, several engineering firms will get involved from the beginning to the end. It is common to see tasks being subcontracted to other companies. Usually what happens is that the major contractor may subcontract parts of the project to other firms, which are the subcontractors.
The process may come with hiccups in the areas of interaction, payment, misunderstanding, and so on. To solve this issue, a blockchain-based platform with an interface that shows the tasks of the different subcontractors, their payment schedules, and so on, could create seamless interactions between the different teams, thereby reducing the chance of misunderstanding.
In developing countries like Nigeria, it is difficult for engineering firms to partner with one another or with other parties because of the issue of transparency. The different participants may worry that they may be cheated, and this impedes development in the engineering space. In the future, it is expected that different engineering companies can collaborate with each other since everything will be transparent.
- Building Information Modeling (BIM)
Dr. Stephen Hamil defines BIM as “a process for creating and managing information on a construction project throughout its whole life cycle. As part of this process, a coordinated digital description of every aspect of the built asset is developed, using a set of appropriate technology.”
In the engineering space, BIM is used to assemble information concerning a project. It houses the information that will be used in the construction and implementation stages of a project. Though it may be effective, it is plagued with issues.
Information is usually collected from different sources, making it susceptible to attacks. Recorded data could be altered by malicious actors, which may be disastrous to the project. The immutability concept of blockchain can solve this, as the time that information is added to the distributed ledger will be recorded. Details of those that added the data will also be imprinted into the network.
There is the issue of a slow data collection process, which could be hastened with blockchain. Real-time data is more valuable if it is implemented quickly.
Future Implementations of Blockchain in Engineering
The engineering world has issues that blockchain can solve once they are implemented.
- Smart Contracts
When an engineering firm is contracted for a job, it comes with lawyers from both parties, drafting agreements and contracts which have to be signed. Once they are signed, it is expected that both sides keep to the end of the deal. Humans drafting the contracts could lead to errors embedded into them. If the agreement is broken for any reason, it may worsen into legal battles that drag out for months, and even years. Usually, the loss linked to this can run into tens of millions of dollars. There is the need for a smart contract infrastructure tailored for the engineering industry, which curbs the issues discussed above. Instead of having to head to a court during a dispute that may spend time and accumulate debts, a clause could be added to the smart contract code that automatically deducts an amount from the defaulter and credits the other party. It may take the form of a breach of contract fee.
A smart contract is filled with codes, which are stored in the blockchain. Once they are added to the blockchain, they become immutable, and may only be altered with the consent of every party involved.
Conditions can be incorporated into the smart contract, and enforced automatically, removing the need for human intervention. Middlemen may be important in a traditional transaction, but they come with issues. Once an intermediary is involved in a transaction, they have to be paid, and there is the risk that an error may occur.
Smart contracts are more efficient than their paper-based counterparts, which is common in the engineering field. They are self-enforceable, meaning that once an embedded event occurs, an action is triggered. Apart from the aforementioned, smart contracts are fed with data from both on-chain and off-chain sources, allowing them to make effective decisions in real-time.
- DAO
The concept of Decentralized Autonomous Organization (DAO) will become a thing in the engineering space in the future. Engineering firms partner with one another for different reasons. It could be that they want to create an efficient project, which would have been difficult to achieve if they did it individually. Over the years, speculations of smart cities being built have pierced the air, yet very little progress has been made. The concept of the smart city will move from being a theoretical concept to being a reality if DAO is accepted by engineering firms. If a mechanical engineering firm decides to form a Decentralized Autonomous Organization with other necessary firms, it could be successful.
What is a DAO? According to Wikipedia, “a decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC) is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO’s financial transaction record and program rules are maintained on a blockchain.”
Ethereum.org adds, “DAOs are an effective and safe way to work with like-minded folks around the globe.
Think of them like an internet-native business that’s collectively owned and managed by its members. They have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organization has a voice.
There’s no CEO who can authorize spending based on their own whims and no chance of a dodgy CFO manipulating the books. Everything is out in the open and the rules around spending are baked into the DAO via its code.”
As a DAO, the entire process is run transparently with smart contracts. The smart contracts are filled with terms and conditions, which have to be followed to the end. If there is a breach by any participant, the clause is triggered, which has an already chosen line of action for such a breach.
With the presence of Artificial Intelligence and the Internet of Things, this could be earlier than is expected. With the sensors implemented during the construction of the smart city by the engineering firms, the city can be run as a DAO.
In Conclusion,
- Blockchain’s use cases are effective in many industries including the engineering field.
- With this technology, the procurement process of engineering firms will improve tremendously by plugging the loopholes that once existed.
- It will create a hub of seamless interaction between different engineering firms working on a project.
- Blockchain is injecting efficiency in Building Information Modeling systems (BIMS).
- Transparency will become the order of the day with this innovative technology.
- With blockchain, it is expected that DAOs will be set up by engineering firms to oversee the running of different projects.
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