As we continue our look into the potential technology advances in Construction, we have been investigating Bitcoin. So what is Bitcoin and how could it help the Construction industry?
Bitcoin is a digital currency and payment system that operates completely independently of any bank or central administrator. Payments are secure and irreversible and happen instantly – no more waiting 3 days for the payment to clear.
It isn’t officially recognised as a currency – however it does have an exchange rate against most major currencies. There are no banknotes, cards or cheques – everything is handled electronically. The ‘backoffice’ technology behind it is very secure and provides authentication and verification. It can handle multi-authentication – for example not permitting a payment to be sent until the relevant board members have signed it off.
Behind the scenes, the Bitcoin network is sharing a massive public ledger called the “block chain”. This ledger contains every transaction ever processed which enables a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses therefore allowing all users to have full control over sending bitcoins.
Thus, there is no fraud, no chargebacks and no identifying information that could be compromised resulting in identity theft.
So how might this help the Construction industry?
One of the advantages of Bitcoin-based transfers between businesses is that it is very efficient. BACS payments, one of the most common ways for business-to-business payments, are expensive and can take days to process. Companies who utilise bitcoin for payments can eliminate fees charged by banks because Bitcoin sits outside the banking system altogether.
Bitcoin can also build on the wave of collaborative working that is expanding in the industry. Payments between the client, professional team, principal contractor and subcontractors can be linked through so that payment terms are honoured and cascaded through the chain and can also be linked to stage completion.
If you would like to discover more and you’re not already on our mailing list, join today for insights and development on how Buildupp wants to change the construction industry. So what do you think about Bitcoin? Have you dipped your toes into the water? Join the conversation at Buildupp.