Best known as the underlying technology that makes cryptocurrencies like Bitcoin secure, blockchain technology is moving from hype to practical use in a wide range of applications and industries. Blockchain’s ability to provide a highly secure ledger appears to be making it the validation and traceability solution of the future. ARC Advisory Group recently spoke with L&T Technology Services about that company’s development of a solution based on blockchain for access control for smart homes and buildings. The decentralized but secure nature of blockchain technology can improve security and eliminate intermediary entities that can add cost and time to transactions or pose additional security risks.
While L&T Technology Services has had success applying this solution for real estate and smart property technology applications, ARC Advisory Group believes there is potential to apply this approach to a wide range of other applications that could benefit from blockchain-based solutions.
What Is Blockchain?
Blockchain is a decentralized database that stores a ledger of assets and transactions across a peer-to-peer network. While blockchain is commonly associated with the Bitcoin cryptocurrency, blockchain itself is a technology for transaction assurance. The asset or value transferred could be anything. Much of the brainpower devoted to blockchain since it appeared in 2009 has been invested in applications for financial transactions, but there are some obvious potential applications for manufacturing firms. Most center on supply chain visibility.
The key term here is “decentralized.” Transactions, or transfers of ownership, are usually intermediated. An intermediary in a transaction (such as between one or more banks) provides assurance of identity, ownership, and creditworthiness to counterparties who otherwise would not have reason to trust each other in the transaction. This centralized intermediation function provides value in that it facilitates commercial transactions.
Security Challenges of Smart Real Estate and Property Technologies
The world of real estate transactions and smart property technology is experiencing the same revolution of digital transformation experienced across the worlds of manufacturing and the supply chain. A common concern with digital transformation in any project or application is security – both the security of the underlying systems and technologies that exist in both the physical and information worlds, including transactions and contracts. Blockchain has the potential to make both worlds more secure and, in the case of smart contracts based on blockchain, provide ironclad contract enforcement and speed completion of transactions.
Everyone wants to have secure access to homes and buildings, but many of the methods used today, from mechanical locks to digital keycard systems, are fraught with an increasing number of both physical and cyber-vulnerabilities. It’s been said that locks only keep out honest people and children, and even the digital RFID locks common in so many hotels and public buildings have experienced several major hacks. Many of these hacks take advantage of the highly centralized nature of how these systems are managed to do things like create a master key.
Earlier this year, for example, the Finnish cybersecurity firm F-Secure published research on a hotel room key hack that, in just minutes, allows the attacker to create a master key that provides access to all rooms. While this attack exploited a vulnerability in an older system, it still affected many thousands of hotels. Even the newer versions of these systems continue to experience vulnerabilities that get exploited. If the basic underlying framework of the system remains the same, hackers will continue to exploit its associated vulnerabilities.
Blockchain for Access Control Provides an Answer
The inherently secure and distributed nature of blockchain technology can provide an effective solution for granting access control to unique individuals or by enforcing rules that only allow certain individuals to access certain areas. Blockchain can, for example, provide unique passwords to a real estate agent who wants to show a property to a prospective client. Today, this is typically accomplished with relatively insecure physical lock boxes that require physical keys or simple combination locks.
For real estate and property transactions and contracts, blockchain can provide an effective solution to reduce the involvement and associated cost of third parties like banks and other financial and legal intermediaries. In “smart contract” applications, blockchain can provide digital enforcement of and facilitate and validate contracts and their associated terms.
L&T Technology Services Blockchains Real Estate Assets
In a recent meeting with ARC, L&T Technology Services discussed its new blockchain-based approach to smart real estate and property technology applications, including access control and real estate contracts. L&T is working to embed this technology into a new generation of smart locks that avoid many of the current security risks incurred with the current generation of smart locks that require centralized administration.
A subsidiary of one of India’s largest engineering conglomerates Larsen & Toubro, L&T Technology Services provides engineering services across the entire “design to shop floor” value chain, from product conceptualization through aftermarket support. The company’s solutions – including both the iBEMS intelligent Building Experience Management System and UBIQWeise cloud IoT platform – reflect its deep domain knowledge.
L&T developed its real estate solution using an Ethereum Smart Contracts framework. The new system is point-to-point (P2P) and network-based. Thanks to blockchain technology, it requires no central authority and provides data integrity and non-repudiation. Nodes in the blockchain P2P network create and broadcast a block. Transactions in the block are unchangeable, greatly improving overall data integrity for the transaction.
The solution can be applied to a range of real estate and property assets, such as homes for sale, rental properties, and employee access control. In the future, this technology can be applied to a wider range of applications such as in the hospitality industry, where it could be expanded to handle many of the business processes associated with renting a room such as check-in, check-out, reservations, and billing. Intrusion detection systems are another promising application area.
In manufacturing and industrial applications, end users are adopting RFID location tags for employees and using these and other technologies to implement geofencing policies that limit the areas that workers can access. These geofencing applications could derive the same security and decentralized flexibility offered by a blockchain-based approach.
Blockchain-based solutions for access control application makes things like property rental transactions more secure and transparent and can eliminate the need for third-party involvement to complete real estate transactions. It can also significantly improve the security and reliability of app-based businesses with rental-type transaction models, such as Airbnb, or even transportation apps like Uber.
ARC recognizes the potential value of L&T Technology Solutions’ approach to blockchain for real estate and smart property management applications. Here, the decentralized nature of a blockchain based-approach combined with increased security presents a compelling value proposition for smart lock management and access control.
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Keywords: Blockchain, Access Control, Smart Real Estate, L&T Technology Services, Ethereum Smart Contracts, ARC Advisory Group.