As expert building quantity surveyors, we recognise that the construction industry has always valued remaining at the forefront of technology. Could blockchain be the next step in streamlined construction? We’ve outlined three ways cryptocurrency and blockchain could benefit your next build, and why this digital transaction tool may begin to be integrated into the construction industry.
What is blockchain and how does it work?
To understand blockchain you need to have a basic knowledge of cryptocurrency. Cryptocurrency is a digital or virtual currency that uses encryption to securely verify transactions. Crypto does not rely on banks to process transactions but is secure and impossible to forfeit. Blockchain technology is a new tool for recording and processing transactions made in cryptocurrency and other values like the service or product. Blockchain securely creates a clear, linear record of cryptocurrency transaction history by forming a “chain”. This can automate contractual processes by creating a clear ledger of services provided and tracking all the multiple transactions involved in one project. This efficient and transparent form of payment processing and recording streamlines project management, which could have many benefits for the construction industry.
1. Fast payment processing
Using blockchain and cryptocurrency could result in payments being processed faster for contractors. Blockchain does not require payments to be processed and verified by banks, incurring fewer process payment fees and time delays across banks.
The instant processing of blockchain and cryptocurrency would allow faster material purchases and work turnaround, plus it would be appreciated by construction workers and contractors. If combined with smart contracts, this instant payment system could be automated to occur as each stage of construction is achieved.
2. Record keeping for future maintenance needs
While blockchain has many benefits as a payment processing system, this tool could also function as secure information management with no limit to scalability. The encryption stores data in a code that is verified by all the prior transactions, so no aspect can be changed without being noticed in the digital ledger. This information also isn’t limited to a central server, which allows blockchain to scale as needed for small to very large construction projects and for the information to be readily available by any party 24/7.
As the records of the blockchain are unchangeable, using blockchain could also function as storage of all warranties, certifications and material information for every aspect of the project. This virtual storage would be of great benefit to the building owner if any asset of the building needs to be replaced or repaired over the years. This data is not only stored but also verified by the blockchain and the tool’s transaction history records, allowing an ongoing ledger of build costs. This system could even encourage further automation to replace or maintain assets routinely using the extensive information stored in the blockchain.
3. Smart contracts
Smart contracts can also streamline construction processes and payment approvals. Blockchain-enabled smart contracts streamline the supply chain and the management of materials by automatically triggering the next order process or phase. This will reduce the amount of paper, communication, verification and organisation needed to confirm the current works and access documentation about products, pricing and quantities, all while being accessible to every contractor and party involved. Smart contracts allow easy collaboration between contractors while adding a layer of transparency for any scope or schedule modifications.
Need an expert building quantity surveyor?
The integration of blockchain technology with the construction industry will take a while to be widespread, no doubt due to the appreciation of relationships and trusted partnerships between contractors. Blockchain’s automation will also still require professional oversight to ensure every stage of the build meets the standards and project scope. For expert insight into every aspect of the build, the team of building quantity surveyors at Section 94 are here to help!
With a wealth of experience in preparing accurate prefunding reports, construction cost estimates and progress claims, our dedicated team will ensure your residential or commercial build progresses without the hurdles of inaccurate or exceeded budgets. Our estimators will ensure that your construction loan is paid as scheduled with our reliable progress drawdown reports, keeping your project on track and your builders and contractors satisfied.
With over a decade of industry experience, our qualified building quantity surveyors are AIQS certified with a fast turnaround time and clear communication. Give us a call today on 0413 953 869 or email us at info@section94.com.au to discuss our quality budget services for residential and commercial builds.