Why Most ‘Smart’ Cities Haven’t Embraced Blockchain

There’s a certain appeal to being a “smart city.” When nearly everything is connected by internet of things devices, the collected data and technology can create efficiencies and economic development while enhancing the quality of life by lowering crime and improving transportation.

So why aren’t more cities smarter? Because, as with connected, smart homes, there is the serious potential for cyber attacks on unprotected systems. Blockchain can help reduce that risk of attack, but most cities have yet to go down that technological road.

An Insecure IoT

“Blockchain can help secure smart city data exchanges and provide accountability for multi-service integrations by creating and managing device identities and encryption keys,” Andrew Hacker, a cyber security expert in residence at Harrisburg (Pa.) University of Science and Technology, tells ThirtyK.

Such an audit trail would reduce risks from denial of services (DDOS) attacks, signal jamming, data manipulation and malware, which could trigger city-wide failures.

But because the IoT is only as strong as the password protection used, integrating blockchain directly into IoT devices isn’t the answer for cities. “Running blockchain is highly taxing for computer devices,” Hacker says, because it uses more CPU resources than smaller embedded devices can handle.

So, rather than run blockchain on IoT devices, Hacker suggests bumping up CPU-intensive processing for blockchain maintenance, mining and consensus algorithms to what he calls super-nodes, while the less intensive functions are performed on IoT devices or other nodes with limited resources.

“In some cases an industry-specific consortium of super-nodes could control all the functionality, or certain super-nodes could be permissioned or elected,” he says.

Thought, an approach to analytics using artificial intelligence and machine learning, offers another way to manage smart cities, says Hacker, who is also the company’s CEO. Thought “embeds smart logic into every bit of data,” according to the company’s white paper, so there is no difference between the data and the application. Therefore, data can act as a self-organizing entity. An intelligent, blockchain-enabled fabric provides the structure and security for transactions.

When applied to smart cities, Thought makes it possible to have self-healing power grids, instant alerts of cyber breaches, advance earthquake warnings, and instantaneous communications among industries and utilities, to improve quality of life.

Smart Cities Still Defining Themselves  

But there are not a lot of “smart” cities using blockchain.

Dubai was one of the first to incorporate blockchain into its smart city design, notably in government for bill paying and passports, and in business creation and transactions. However, other city planners are struggling to determine what they want from smart technology. New York; Singapore; Seoul, South Korea; and Stockholm, Sweden, are furthest along in smart development, according to management consultant McKinsey & Company.

So far, most smart cities have focused on high-speed data infrastructures, Wi-Fi accessibility and mobility. Brazil’s Rio de Janeiro and Cape Town, South Africa, are among the few smart cities to focus their smart resources on national security.

As cities get bigger and the technology improves, there may be a greater push to using blockchain technology. But for now, don’t expect widespread adoption anytime soon.