[New Wave] Why Are Smart Cities Turning to Blockchain?

Globally, cities face various challenges such as resource and infrastructure shortages, traffic congestion, and energy deficits due to population concentration and aging infrastructure. The concept of a smart city emerged precisely because of these needs. It refers to an urban model that integrates new technologies like information and communication technology, big data, and artificial intelligence to optimize the use of limited resources, thereby enhancing the city's competitiveness and improving the quality of life for its citizens.

Already, the United States announced the 'Smart City Initiative' in 2015 and has been making large-scale investments since then. Japan is conducting smart city projects in four cities, focusing on energy and environmental sectors following the Fukushima nuclear accident. Finland is progressing with the Kalasatama smart city, and the European Union (EU), the United Kingdom, and Singapore are also actively promoting smart city projects. South Korea is no exception; after selecting smart cities as one of the 'Eight Leading Innovation Growth Projects' in 2018, it is currently accelerating efforts to secure related technologies. Interestingly, both Busan and Sejong City, which have been selected as national pilot smart cities, have announced plans to incorporate blockchain technology into their smart city initiatives.

In smart cities, it is essential to collect and analyze various urban data such as fine dust, parking, and odors in real time and utilize this information for policy-making. However, the problem lies in where to store and manage the vast amounts of data collected across the entire city. As seen in Alphabet's (Google's parent company) urban development subsidiary 'Sidewalk Labs' collaborating with the Canadian government on the 'Sidewalk Toronto' smart city project, and Alibaba planning to build 'City Brain' with Hangzhou City in China, smart cities represent a treasure trove for platform companies that collect and analyze numerous types of lifestyle data. From the government's perspective, having companies with the best big data analysis and AI technologies involved would facilitate smoother smart city development. However, if giant platform companies like Google and Alibaba are allowed to privatize even public sector data such as that from smart cities, their dominance and influence would become far more entrenched beyond the internet. Furthermore, the lock-in effect, where existing users cannot leave, would intensify, potentially leading to a laughable situation where entire cities are controlled by one or two companies.

Blockchain can be effectively used to solve these problems. In the traditional internet era, platforms like portals controlled information, but on the blockchain, everyone shares information. This prevents a few large companies from monopolizing or exclusively managing information for excessive profits and enables the rational development of smart cities by leveraging collective intelligence. It is similar to how multiple users jointly develop the smartphone ecosystem through app stores.

However, there is a point we must be cautious about. Using a public blockchain as the container for smart city data may raise privacy issues. On the other hand, choosing to use a private blockchain would be a very wrong decision because private blockchains allow participation only by a limited number of authorized individuals, which could reproduce side effects such as monopolies or information concentration. Smart city projects are crucial enough to determine the nation's future. We must avoid merely imitative projects due to a lack of current technological capabilities.

Seungjoo Kim, Professor, Graduate School of Information Security, Korea University

This content was produced with the assistance of AI translation services.