This article explores the use cases and value of blockchain for AEC and Real Estate Industries.

Let us have a look at a few definitions in the context of the article.

• Blockchain – “A distributed database, that maintains a continuously growing list of ordered records, called blocks”
• Computational Design – Computational design is a field involving use of computer algorithms, simulations and data analysis for production of design.
• Tokenization – “Tokenization is the process of creation a digital representation of a real thing”
• RWA – “Real world assets” (Like real estate, or carbon credits etc.)
• Smart contracts – “Smart contracts are digital contracts that are stored on a blockchain, that are automatically executed when the predetermined conditions are met.

Some key ues cases of blockchain for AEC and Real Estate that are being already developed by blockchain enthusiasts and developers:

1. Carbon credits generation from Net zero Real Estate projects, tokenized and tradable on blockchains.
2. Render tools used over blockchain for faster turnaround of visualization and permutation of parametric or algorithmic designs.
3. Tokenization and fractional ownership of real estate projects
4. For Land & Property, Title & ownership deeds can be facilitated through blockchain.
5. Smart contracts or smart workflows for contract administration and payments to vendors.
6. Supply chain on blockchain can be used to identify the source of the materials used by the end user.
7. Design approval and project management through blockchain applications.

Blockchain in AEC & Real Estate

Let’s have a deeper look at the above ideas and the companies currently involved in development of these use cases.

1. Carbon credits generation

As of now companies are involved in tokenization of carbon credits, and creating a market for their trading. Real world generation of carbon credit is added to various blockchain, where it can be traded. Report from PWC on “Carbon credit tokenization” captures these platforms. The “carbon credits” are primed to form a “new currency”. Real estate projects would have the opportunity to be carbon positive in the operational phases of their development and use the carbon markets easily to benefit from the carbon credit tokenization economy. Some of the platforms offering trading of carbon credits are – Toucan Protocol, ACX, Moss, Regen Market place.

2. Cloud Render tools

In simple terms, cloud rendering through blockchain. Unlike traditional cloud render farms, in blockchain based render, idle GPU is lent by the user to the blockchain to carry out the rendering. This way the blockchain is more scalable and can add many more idle GPU (people not using their PCs). In return those providing GPU can get in return tokens for being a part “node” of the blockchain. Most notable project in this domain is the “Render Protocol”. Blockchain technology facilitates the payments from the creators to the node operators.

3. Fractional ownership of Real Estate

Fractional ownership of Real Estate is already available in India as an investment class. However, it is still not through the blockchain, as a result the investments in the existing platforms requires higher capital and is illiquid. In essence Real Estate tokenization is still nascent. The platforms offering fractional ownership are Strata, Real X, hBits, Wisex, Asset monk. In contrast the blockchain enabled platforms like RealT, Brickmark, Harbor, Solidblock, Blocksquare offer real estate ownership at a fractional ownership cost, and one can start with as low as 50$.

4. Property records on blockchain

Blockchain powered property management system enables the availability of a common ledger of the property related transactions with all related stakeholders. The property details and all the transactions on the property would be stored in the blockchain . The transactions could include pledge of property, release of pledge, inheritance mutation, sale, gift, acquisition initiation, alienation etc. This will greatly reduce the litigations and speed up the disposal of disputes/cases. Project on this has been undertaken by the Ministry of Electronics & Information technology under “Property Chain”. Also the Dubai Land Department (DLD) uses blockchain technology to record and manage real estate transactions in Dubai. The DLD’s blockchain-based system, the Real Estate Self Transaction (REST) platform, allows buyers and sellers to complete property transactions digitally. 

5. Smart contracts 

Timely payment of construction participants and vendors is crucial for the success of the project. However, the construction industry worldwide suffers from delayed and poor payment practices. Builders and developers can use blockchain for complex projects, each deadline and deliverable can have a smart contract linked, thereby on completion of the predefined criteria the stage can be marked as completed and payments can be initiated for the vendors and construction participants.

6. Supply chain on Blockchain

Block chain would enable the tracking of materials used in a development by all stakeholder involved in the development. This would include the end customer, being aware of the material used in the construction right from the sourcing. This will help greatly to the cause of ethical sourcing and green sourcing. The application in supplychain are not restricted to construction, full report / blog here by delloite.

7. Design approval & Project Management through blockchain

Proprietary software for recording and storing design approval and project management workflows can utilize blockchain to deliver similar results. Blockchain would enable projects to be on open source and free platforms instead of closed platforms to manage the projects. Informations would be shared without intermediaries and brokers. Also as explored in the smarts contract section, work progress and milestone completion could be blockchain enabled which in turn could be linked to the automatic payment release and payment stages. Moreover the blockchain can serve to protect data, by keep it away from intermediaries and brokers.

These are few developing blockchain applications. Please feel free to add other application of blockchains in real estate and construction industry in the comments section.