WHY IS BLOCKCHAIN USEFUL IN THE BUILDING INDUSTRY?

In the current state of sharing information and making transactions, trust is necessary and must be a priority for all. But that trust can be hard to come by in this changing world. The question for many is who is sharing the information and who is being trustworthy?

Blockchain makes the need to create and find trust unnecessary, as each piece of information is laid out on the table for all to see and nothing can be hidden away in an untrustworthy manner. It removes the middle man.

In a community like that of the building industry, blockchain fills a very important need for information sharing and executing on timely payments and transactions. Construction is a collaboration dependent industry, which can strongly benefit from the reliable documentation and transparency for all interested parties.

It is the two core items of archiving and sharing data, along with improving on timely payments which is what blockchain is all about in this industry.

The archiving and clear sharing of information and data between all interested and contributing parties helps to provide everyone with the same complete view of a project. And it is that archiving of data that can assist in auditing the performance of a project in the event of commercial disputes. Insurance companies and lenders definitely see the benefit, and show interest in this information, when setting insurance premiums on performance bonds and interest rates on construction loans.

With blockchain, any of the documents that are part of a project will not be lost or damaged when archived.

In addition to the need for data archiving, late payments have always plagued the construction industry. Blockchain creates and provides an opportunity that will decrease the chance of late payments.

It is through blockchain that digital smart contracts with integrated escrow accounts and built-in factoring capability create a trustless, distributed and decentralized payment system. This guarantees compliance and the elimination of human error. Contractors will be automatically paid out through the execution of smart contracts, which will disburse funds to them upon the completion of mutually agreed upon milestones.

It may seem hard to fully understand and consider blockchain as an option to the current ‘trust’ form of business in the industry. But with blockchain, every user of the platform will be authenticated to the same standards Canadian banks use when opening a new account, which ensures the security of intellectual capital on the platform.

Blockchain creates the opportunity to form partnerships with professional organizations, collaboration amongst various partners and suppliers, the collection and housing of important data for all to access and a way to be held accountable while creating a timely and easy payment system.

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