Blockchain for infrastructure 101

The meltdown in the crypto markets during 2022 was ... not good for PR around blockchain applications in any industry, let alone for infrastructure and construction. But there are still some fascinating potential applications out there. In this long-form article (5500 words!) I walk through the business case for blockchain applications in our industry and offer up some real-world examples of implementation and ideas for the future.

How is a blockchain created and why is it so secure?

A blockchain is a continuously – and potentially infinitely – growing set of digital records, each of which is accessible to the public (or a closed group of users, as the case may be) over the internet. Think of it as a digital ledger whose entries are immutable – if any single entry in an infinite list of historical transactions is changed in any way – no matter how small the edit – every single user of the blockchain will know immediately. As new “blocks” of data are added to the chain, each user receives the new, updated version instantaneously.

The technology has its origins in the “double spending” problem for online transactions. Suppose you own some discrete amount of digital currency and want to pay your friend back for a recent dinner. Without some sort of mechanism for validating the transaction, you could essentially use that digital money to pay back your friend and then use it again for another transaction next week (or potentially an infinite number of transactions).

A centralized mechanism for validating payment to your friend would be a trusted third party (like a notary public, say, for paper transactions or the digital certificate authorities that enable https:// security.) But there are limitations – can you trust that third party to always act in your best interest in verifying the transaction? Here is where decentralization and blockchain technology comes into play.

The key to understanding blockchains is the hashing function.