Smart money for smart cities
In recent years, ‘Smart City’ has gone from a phrase that implied visions of science fiction and the far future, to a buzzword dropped into every other article and conversation, to – finally – something that is now starting to become reality for many people all over the world. With the development of more and more IoT devices and connected objects, even those of us who would not consider our towns to be ‘smart cities’ see our homes and cities becoming more intelligent and connected every day.
According to research, by 2025 the number of megacities is expected to reach 29. Smart cities are already being recognised globally and many are utilising blockchain as the foundation of plans to enhance urban living.
In 2018 we saw smart city technology developing faster than ever before, and with the global smart cities market expected to grow to USD 757.74 Billion by 2020, it is clear that this trend is only going to continue.
With technology revolutionising the way we live and work, what better time to also address some of the deeper issues with our current society. As well as being more connected and intelligent, the first smart cities will also be the sites of large-scale, bold regulatory reforms. These smart cities are expected to become the sites for far-reaching social experimentation and changes to society.
It should come as no surprise that the other key technological revolution of our time will also bring about fundamental advantages and changes to the way smart cities operate. This technology is, of course, blockchain.
Blockchain is capable of revolutionising the way we do almost any kind of transaction, and even something as complex as a smart city is ultimately multiple simultaneous transactions.
The underlying platform on which all the interconnecting technologies of a smart city is run must be fundamentally reliable, trustworthy, transparent, and, critically, unhackable. Blockchain technology is all of these things, as it is able to process unimaginably vast amounts of data, in an efficient and secure way.
One example of an area of smart cities that blockchain can have an obvious impact on is currency and money. The concept of smart money for smart cities has gone largely under the radar until now, but let us consider it.
Traditional economic systems only award value by the exchange of money in a transaction. However, in a smart city, transactions serve the purpose of exchanging crypto tokens, which can then later be exchanged for digital currencies or real-world currencies. This is similar to any digital exchange of money, but it is completely secure, meaning no aspect of the transaction is hackable.
Today, our economic transactions rely on banks as third-party facilitators and enablers – but using secure blockchain technology to facilitate smart money would ultimately eliminate the need for banks. Banks and paper money are brick and mortar institutions, while smart money using cryptocurrencies and smart contracts are digital realities. By obviating the need for banks and paper money to enact transactions that relay value, the resulting digital currencies are, effectively, smart money.
