How blockchain helps to construct houses. Speaker of Blockchain & Bitcoin Conference Belarus Dmitriy Kolesnik, BitRent
Blockchain technology will help developers to reduce construction costs and attract investment capital at early stages. Decentralization is also beneficial for investors, the future real estate owners. We have talked about the potential of blockchain in construction with the speaker of Blockchain & Bitcoin Conference Belarus, chief technical officer of BitRent Dmitriy Kolesnik.
Ask Dmitriy questions at the conference in Minsk on February 27!
Dmitriy, you propose to use blockchain in the construction industry. Which problems does the industry face, and why one should use the distributed ledger technology to solve them? How will blockchain influence the quality of construction works?
Our platform touches upon several aspects. The first relates to the monitoring of construction quality and terms. By using the RFID sensor/smart contract stack, we are mitigating the human factor of construction control.
Of course, it is impossible to shift to these technologies completely any time soon, but we will be able to replace some functions. Besides, the volume of automated control will be increasing in several years.
With the mitigation of the human factor, construction quality improves. RFID sensors are capable of registering millimetric imperfections in the joints of load carrying structures, which cannot be seen with human eyes.
The second aspect relates to the protection of investors. In short, a developer will not receive further investments until the previous construction stage is finished.
Developers and investors will close smart contracts instead of the traditional agreements. However, where should one turn to resolve possible disputes? What will prove the validity of a digital document?
Our platform connects investors and developers without additional intermediaries, helping to reduce the expenditures of the developer and allows investors to finance construction facilities at any development stage, in any country of the world. On request, every investor will be able to obtain ownership rights to his or her share of the facility in the traditional form.
Real estate construction is closely connected with the bureaucratic machine. Will blockchain help to reduce its pressure in some way? How?
We do not solve issues related to the relationships between the state and developers. On one side, we help developers to reduce expenses for the attraction of initial capital. Our task is to develop readymade solutions, where RFID sensors work together with already prepared smart contracts for the total control over the construction process.
Taking into account the specifics of the industry, our package solutions will require the minimum of technological knowledge, allowing developers of any level to receive access to these technologies.
Who is BitRent primarily designed for – developers or investors?
Both parties will benefit from our platform.
Touching upon the problem, the most difficult thing for a developer is to get the first 30% of financing for the facility. Due to this threshold, a large number of truly interesting projects are not brought into life. In most cases, developers have to pay huge fees, carry on difficult negotiations, and mortgage their properties to get those initial 30%. Our platform allows doing it with less effort.
On the other side, investors are able to finance any type of real estate, which earlier was available only for the chosen ones. Moreover, you can choose facilities for making investments in any country.
In your presentation at Blockchain & Bitcoin Conference Belarus, you will address the issue of Building Information Modeling (BIM). This technology is thought to increase the designing cost, which contradicts the core idea of blockchain. Is it worth using this model together with blockchain?
Talking about the work on the building during its lifespan, BIM represents a complete facility database managed by the software and hardware complex.
The old approach to building management does not meet current demands placed on modern models. Therefore, shifting to a higher level of building’s lifespan management offered by BIM is not the future, but the present. More and more developers are using BIM in their work.
Shifting to BIM is a conscious choice and we are trying to use modern technologies.
Considering that changes in the society are imposed from the top down or come from the bottom up (from individuals, business representatives), which way should be taken to adopt blockchain in construction?
Throughout human evolution, all innovations were brought by entrepreneurs. In particular, it can be seen now when the seemingly unshakable for the government space program goes into the hands of private businesses.
The key role of the government lies in the creation of optimal conditions for running business. In places where this condition is fulfilled, innovations are implemented very rapidly.
Therefore, we follow the way that will simplify business processes for developers and help to connect them with investors at a new level.
We are looking into the future, so our end goal is the tokenization of already constructed buildings and sale of real estate using smart contracts. As a result, the information about the owner is recorded in the state register of immovable property based on blockchain. We know that currently the UAE and Ukraine are working on shifting real estate to blockchain. And a draft law has been passed in Arizona, according to which smart contracts obtain legal force.
That is why blockchain and smart contract innovations gradually become commonplace even at the state level.