This paper “A City Is a Data Pool: Blockchains and the Crypto-City” by Jason Potts, Ellie Rennie and Jake Goldenfein provides a framework for understanding how a disruptive technology like blockchain may impact on cities and their residents. According to the authors, the Crypto-City is a stage beyond what is called the Smart City, as the consequences of adopting blockchain can lead to structural changes to economic and political institutions.
The Smart City agenda of integrating ICT and Internet of Things (IoT) informatic infrastructure to improve the efficiency and adaptability of city governance has been shaping urban development policy for more than a decade now. A smart city has more data, gathered though new and better technology, delivering higher quality city services. In this paper, we explore how blockchain technology could shift the Smart City agenda by altering transaction costs with implications for the coordination of infrastructures and resources. Like the Smart City the Crypto City utilizes data informatics, but can be coordinated through distributed rather than centralized systems. The data infrastructure of the Crypto-City can enable civil society to run local public goods, and facilitate economic and social entrepreneurship. Drawing on economic theory of transaction costs, the paper sets out an explanatory framework for understanding the kinds of new governance mechanisms that may emerge in conjunction with automated systems, including the challenges that blockchain poses for cities.
Blockchain is known as a value-exchange protocol because it enables the automated transfer of value across digital networks without the need for third parties . Blockchains are distributed, in that they use a combination of encryption and peer-to -peer technology to update a common and immutable record to show when a transaction has occurred ‘“ all nodes within the system will sync to display the outcome.
Where the Smart City is the addition of a digital layer of ICT and sensing technology (IoT) to the ‘˜analog’ city, the Crypto City is the Smart City moved on to the blockchain. A Crypto City can only develop from a Smart City, but when it does it fundamentally alters the transaction costs of the city, and when transaction costs change so too will the organization and institutions of the city. A smart city makes the city more productive, but leaves its basic shape unchanged. A Crypto-City transforms how a city is organized and coordinated.
Cite this paper: Potts, Jason and Rennie, Ellie and Goldenfein, Jake, A City Is a Data Pool: Blockchains and the Crypto-City (June 7, 2017).
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