WATCH, WALLET, PHONE, KEYS & NFTs…CHECK!

With last week being the first ever National Blockchain Week in Australia and following many a conversation and debate with my friend and colleague Stewart Bird, I felt it necessary to reflect on the NFT space at a time when digital transformation of many industries continues and we ask ourselves the questions that may not yet have clear answers to, including;

Could 'Blockchain' technologies be more disruptive and empowering of business and industry internationally than the internet itself and in what way might it really impact the construction sector?

Will we soon be living in a world where we don't even consider leaving the house without our hardware wallets, which contain the private keys to all the digital and physical assets we own? Perhaps not, but blockchain and NFTs are a subject that is drawing a lot of interest and some unique firsts across many industries which has certainly sparked my imagination as it has many.

What's an NFT?

Essentially, a non-fungible token (NFT) is a one of a kind thing (digital content or record of ownership) that cannot be directly exchanged with another thing of equal value i.e. not fungible and can be verified via the blockchain.

Some fundamentals around the creation of NFTs:

• NFTs are based on blockchains which utilise smart contracts
• Creators can issue their own customised tokens to which they attach assets such as digital art or a record of ownership of a physical asset.
• Existing tokens cannot be duplicated after initial creation as this is recorded on the blockchain but further unique editions can be generated
• NFTs can also be associated with physical assets or invitations to events or experiences.

Some fundamentals that affect the value of an NFT:

• How well-known the physical, digital asset or its creator is
• How unique the digital or physical asset is e.g. being the first, only one in existence or a rare item

What's all the fuss about?

In other sectors outside of construction, we're seeing a lot of extraordinary events in relation to NFTs. In recent news, you may have heard about such outstanding inaugural events across music, art and social media industries including:

• US $30bn dollars market cap of all NFT related cryptos and trading volumes have gone up by nearly 20x topping nearly 200m dollars in March
• Kings of Leon releasing album as an NFT
• McDonald's France is set to launch its own digital artworks as NFTs, representing some of the most popular items on the restaurant’s menu
• Digital artist Beeple's NFT artwork becomes first sold by major auction house for over US$70m
• Jack Dorsey CEO of Twitter selling an NFT for his first ever Tweet for nearly US$3m

So, do you think there's a chance we will be selling our unique moments captured at live events with automatic royalties sent via the blockchain, from the platforms that host them, whenever the media is used or referenced?

Ever since I was a child, I'd hope to get a pressed coin for my memorable moments at the top of very tall buildings. Starting with a windy Blackpool Tower in the UK and more recently on my way back from a Snowboarding trip a few years ago near Calgary, Canada but I doubt anyone else would value this memory, my digital photo and physical coin (token) as much as I do!

Now of course, digitally capturing the perceived value and actual ownership of a unique moment, memory, event or creative content represents a very real and interesting prospect. Coupled with a publicly auditable trail of ownership and exchange via an immutable blockchain, this could have a real and lasting impact for many industries.

However, blockchain and NFTs, like many enabling technologies, may run the risk of becoming another enabling technology that is embraced with pace and excitement, just because it's 'cool' and triggers a 'wow' reaction rather than being relevant if not outcomes focused, people-centric and practical in its deployment.

The opportunity for NFTs for built and digital built assets?

I first stepped into the blockchain arena by attending a free seminar at my local Blockchain Centre a few years back now. I was struck even then by how many people from various industries that support the construction sector were in attendance including accountants, programmers, consultants to name a few.

After witnessing a very insightful week of discussion and debate as part of the National Blockchain Week in Australia again from various sectors including legal, commercial and government etc. I feel blockchain is being taken more seriously than ever in Australia. I'm also excited to see what the emerging polices and pilots being established could bring towards solving the challenges of the construction sector and enabling it's full potential.

We can already see huge potential for practical solutions, which will indeed help content creators and service providers engage in a global market place in a mutually fruitful manner.

• Ownership of design: already making an impact in relation to Art and Music but could be extended to include design elements of buildings and critical infrastructure
• Ownership of digital space: tracking ownership of Virtual Land & Domain Names is already possible but perhaps an NFT representing your ownership of your recently procured apartment unit or garden allotment or autonomous vehicle could be on the horizon
• Ownership of collectibles: Game Items and Sports Collectibles including 'Digi-physical' goods is gaining huge traction but perhaps NFTs could be used to track the reuse of 3D object libraries in virtual design and construction models
• Shared/fractional ownership: Both physical and digital assets such as crowd-sourced data, built property or for the future tracking of shared IP from a joint venture
• Ownership of obligations: Insurance policies/contracts backed by project bank accounts for automatic payment to suppliers following completion of well-defined transactions such as delivery of information
• Ownership of experience: Proof of Attendance badges which could be extended to include safe working permits or key training certificates on construction sites anywhere in the world

However, despite the legacy and potential future challenges the construction industry and supply chain still face, which current Industry-led research from SBEnrc and others seek to address, perhaps there's a real chance for accelerating positive change towards a more open and sustainable construction sector?

For example, perhaps the innovations and re-use of great designs could be tracked and rewarded automatically and really accelerate and incentivise innovation and collaborative working throughout the supply chain and asset lifecycle.

This could further accelerate the introduction of innovation in procurement models such as the Innovative Contractor Engagement (ICE) model pioneered by London Underground's Bank Station Capacity upgrade Project, which occurred during my time at TfL. This model involved leveraging and rewarding all bidding parties for the innovations in designs and construction methodologies that were ultimately leveraged in the final built asset and delivered by one of those appointed parties. Perhaps these ideas could be leveraged across other projects with royalties being automatically transacted with the original creators.

Consider for a moment that perhaps Harry Beck and ultimately his future beneficiaries, could still be receiving royalties for the iconic London Underground Map design to this day if recorded on the blockchain via smart contracts.

It's at this point I park my intrigue and enthusiasm for this subject and leave it to the experts in both blockchain technologies and futures research, such as your local blockchain centre and digital futures leaders, to help us explore this one a little bit further... but certainly a space to keep an eye on with interest!

What impact if any do you feel NFTs may have on the built environment and how far away might we be from realising this?