The Role of Blockchain in Smart Cities

Smart city developments are making real headway as we head into the 21st Century’s third decade. From autonomous, pilot-free passenger drone tests in Dubai to smart parking spaces that feed availability information to users, our cities are increasingly clever.

These developments rely on mass data to measure and quantify how citizens actually interact with and live in urban spaces. With the help of AI, better ICT technologies, and the Internet of Things, we are capable of creating vast webs of devices that feed information back to data banks where machine learning is employed to analyze it and help urban planners make better decisions.

Smart cities represent an unprecedented level of interconnected digital systems. And it’s becoming increasingly clear that blockchain and cryptocurrencies could play a vital role in the cities of the future.

Smart blockchain and crypto developments

One thing we’re likely to see more of is the adoption of Bitcoin as an alternative payment method. Already, citizens in parts of Brazil can pay for public transport with Bitcoin. The company that made this possible notes that it will accept multiple cryptocurrencies soon. By scanning a QR code with their mobile device, riders can easily complete the coin transaction.

Elsewhere, China’s digital identification system uses blockchain technology for data-sharing among smart cities in the nation. Chinese officials state that this initiative will enable applications to interoperate and increase connectivity. Under this system, each Chinese smart city is designated by an identification number that is globally recognized and features a tamper-resistant code.

In Europe, municipalities in the Netherlands have actioned a system that relies on blockchain to verify legal documents. The open-source application can be used by municipal authorities when they need to check public records. The Netherlands has shown that it’s quite open to both cryptocurrencies and blockchain, the country boasts several Bitcoin ATMs, for example.

Why blockchain matters in smart cities

Blockchain allows people and institutions to make instantaneous, secure transactions over distributed networks. As our current technologies progress, there will be an increased need for robust cybersecurity measures.

The nature of blockchain makes it particularly useful in smart cities. A smart city comprises a massive network of interconnected smart devices, including streetlights, parking spaces, rubbish bins, and surveillance cameras, to name a few. Blockchain allows all of these components to be linked by a cryptographic chain of trust that enables secure and immutable information exchange.

Without comprehensive security strategies in place that protect urban devices, infrastructure, citizens’ data, and the municipality as a whole, smart city developments are sitting ducks with respect to cyber risk. Attacks can come from individuals intent on wreaking havoc or advanced state-sanctioned groups, an example of the latter is the attacks leveled at Australia in 2020. Australian Prime Minister Scott Morrison noted these came from a “sophisticated state-based cyber actor.”

Data security and privacy in smart cities

The vulnerabilities of smart cities are swiftly becoming apparent as developments progress. Securing citizen data and critical infrastructure, alongside ensuring privacy, should be top of the to-do list for any new project. Unfortunately, this isn’t always the case.

One recent example of this comes from Toronto’s Waterfront collaboration with Google’s sister company, Sidewalk Labs. A leading privacy expert recently quit the project after discovering that third-parties may have access to citizen data. Dr. Ann Cavoukian publicly called the development a “city of surveillance.”

Elsewhere, privacy experts have raised red flags over the use of smart CCTV cameras equipped with facial recognition technology, citing human rights violations. In an extreme and rather dystopian example, citizens in Chinese cities are publicly named and shamed for infractions such as jaywalking.

The applicability of blockchain when it comes to mitigating the risk of privacy abuses is not yet fully described, but commentators remain hopeful. Currently, citizens can do little to ensure privacy other than opting out of data collection whenever possible and enabling their VPNs. What VPNs do is encrypt data transmissions and generate private networks to ensure their privacy.

Combined with the blockchain, technologies such as VPN could be used to better secure smart cities and ensure they are safe (and private) places to live.