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How distributed ledger technology can serve megacities of the future

According to the United Nation’s Economic and Social Affairs Department, one in eight of the world’s population currently lives in 33 megacities — cities with populations over 10 million — with over half living in these and less populous cities. To improve the quality of life for all inhabitants, cities are having to extend their digital infrastructures, a trend termed smart cities.

The International Data Corporation estimates that smarty city spending will reach $158 billion by 2022, and the driver for this is IoT, the network connectivity embedded into everyday objects.

An in-depth look at smart cities

Cities are the pre-eminent arena for economic growth globally, and they house an increasing proportion of the world’s population. By 2050, it is estimated that 68% of the world’s population will live in cities, and these megacities will be producing more than 80% of the global gross domestic product.

Urbanization has been the key trend of the 20th and 21st century. Because of this, the evolution toward a more data-centric approach to city life is inevitable because information and technology provide us with the capabilities to do more in our cities.

Today, cities like Dubai enable access to their data warehouses. These smart cities invite corporations, citizens and entrepreneurs to utilize data, come up with innovative solutions and make it a more sustainable and attractive place to live and work.

New ways of gathering and using data while protecting privacy will be required to address the challenges of urbanization, such as resource management of energy, water, land, healthcare, transportation and waste. This data will flow through IoT infrastructures, consisting of identifiable connected devices. These devices are lightweight and can collect and transmit data over networks.

Success in this arena will depend on smart cities being able to capture vast amounts of data, whether it is raw, clean or authenticated. The biggest challenge to achieve such success will be unifying and standardizing these data sets, while maintaining their integrity and consistency. Smart cities must also avoid erroneous data capture and promptly deal with device downtime and damage.

Systems that field data

The two systems organizations currently use to field the data collected from smart cities are centralized cloud compute infrastructures and distributed systems. In distributed systems, different computers in different locations work together to process the data, rather than processing data at one centralized location.

IoT devices connected to a distributed ledger technology (DLT) infrastructure can run business logic rather than sending everything back to a centralized cloud computing model. This is imperative because the centralized cloud computing model will not be able to cope with the demand from the increasing number of devices connected to the Internet. A Statista study predicts a growth to as many as 75 billion devices in approximately the next five years.

A scalable DLT solution will be needed to support the vast amounts of data propagated throughout city networks. DLT can provide the substrate for a secure, transparent peer-to-peer digital infrastructure for smart cities, where data management will need to provide open innovation, collaborative environments and mutually beneficial relationships.

Incentivizing change

With the right kind of DLT technology, data can be shared much more securely and easily than centralized data storage databases, which reflects a shift from the current closed value chain toward an open value ecosystem.

Another advantage of the distributed model is that where the centralized model has a few big entities controlling most of our data, here the data is controlled and value is created by the data-providers themselves — you and me. With properly structured incentivized methods and privacy controls, we can allow smart city inhabitants to contribute towards smart city initiatives. Currently, private companies are controlling individuals’ personal data at an increasing rate. As public perceptions change and people become aware of how their data is being used, they are pressing for change.

Such a change would lead to people having greater control of how their data is used, who is using it and for what reason. The way in which data is handled throughout its lifecycle is what makes the difference. As an example, we can look at supply chains and waste management, which are aspects of product life cycles that are integral to the economic function of any city.

A traceable solution

Organizations can authenticate products by adopting a DLT solution to track and trace the provenance of a product from its source and using a unique identifier to register it. If we have unique identifiers on plastic bottles, we can incentivize recycle schemes by rewarding people when they return it to recycling bins. Schemes like this are already popular in the U.S. and Europe and will soon be enforced in the U.K. For example, Atlas City collaborates with CryptoCycle to implement Reward4Waste, a deposit return scheme for single use plastic beverage containers. People have signed up to give higher capture rates, while reducing costs and rewarding the consumer for their environmentally friendly action.

The concept of a smart city goes beyond the built environment. It relies on its citizens to be technically aware and able to participate. The key will be the ability to change behaviors while also providing better services, lower costs and a better environment. Interoperability across various technologies will be crucial in enabling smart cities to be truly smart, and DLT will likely be one component of this.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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