By Valeria Grekova
July 12th, 2018

Blockchain in smart cities

Metropolises on blockchain: science fiction or reality?

Blockchain in smart cities

By Valeria Grekova
July 12th, 2018

Metropolises on blockchain: science fiction or reality?

According to McKinsey analysts, there will be about 600 "smart cities" on Earth by 2020. Moreso, in five years these cities will be producing almost 2/3 of global GDP. How can blockchain contribute these communities development? Let's find out.

What is a smart city?

Smart city a concept of integrating information technologies into the urban environment to improve an everyday life of those living in metropolises. An ideal smart city implies effective interaction between communities, urban infrastructure and governing bureaucracy. Basically, imagine a generic sci-fi movie metropolis, where all processes are regulated by the almighty AI (the one with good intentions, of course). For instance, Santander, the city in Northern Spain, has 20,000 sensors that control pollution, noise level, traffic and parking issues.

Generally, smart cities use these six technologies:

– Internet of Things
– AI
– cloud technologies
– smart meters & sensors
– blockchain
– big data

These innovations are implemented to improve the use of physical infrastructure (roads, real estate, green areas) for ecological purposes, interactions with residents and, of course, accelerate the response to various changes and challenges in the urban environment .

Why do we need blockchain in a smart city?

Blockchain can potentially solve many urban problems. It can be integrated into the transport system or the ecology monitoring system. It can be used to control the work of public services, implement digital citizen IDs or quickly charge electric cars. Public blockchain transparency can be used in building urban sensors system as well as in other fields.

“It is an opportunity for citizens to take more ownership of their city as it gives more power to users,”
says Charles Kremer, director of “smart territories” at l’Institut SystèmeX. Overall, it is decentralization tool that can make every part of a huge metropolis function equally well.

However, introducing blockchain in a modern city is not an easy thing to do. Sometimes it requires a lot of effort and time: the necessity of involving banks, telecom operators, security and private companies. The architecture of blockchain will have to be fully compatible with the existing municipal structures, transport and energy companies IT solutions. Nevertheless, many cities authorities already use blockchain.


The Taiwanese city of Taipei is cooperating with IOTA, and authorities are confident that blockchain will improve the quality of life for Taipei residents. One of the emerging technologies is a “smart” passport system for city residents: a so-called TangleID that contains medical information about its owner along with the data about requesting/receiving government services and has a built in protection against identity theft.

New York

New York, for example, can use blockchain to potentially make the energy consumption “smarter”. A new project called the Brooklyn Microgrid (BMG) is a transactive service designed by LO3 Energy and the Siemens Digital Grid as a peer-to-peer energy trading system. Its potential users are households willing to buy or sell electricity generated by solar panels, exchanging extra energy with their neighbours. It is a small green republic of some sort, residing in Brooklyn but observed by the whole world.

“A microgrid is a localized energy system that can operate independently of the traditional grid. Blockchain technology allows for the transference of electricity credits to be executed through a secure, low-cost and public digital ledger/database that all users can reference”.



A very similar energy consumption system is being implemented in a picturesque city of Lyon, France. In partnership with the Nanoélec Institute in Grenoble, Confluence district has a network created in between buildings, that supposed to start operating very soon. Laurent-Pierre Gilliard, deputy director of the French agency “Aquitaine du numérique”, imagines: “If a hamlet is sunny in the morning, while another is in the afternoon, they can create their own micro-transactions system to exchange energy in a secure way without using money”.


UAE authorities view blockchain as a multilateral tool that should be used to resolve many urban issues. Blockchain is expected to be integrated into all government structures within the Smart Dubai project by 2020.

Local authorities plan to make their private and public sectors a “paperless” digital space. Besides, healthcare and other public services may use blockchain to manage patients personal medical data in a more safe and efficient way.

European Union

Taipei is not the only country to partner up with IOTA. European Commission is supporting a pilot programme called Horizon 2020 striving to develop “smart cities”;  IOTA and +CityxChange came on board to bring it to reality. In January, 2019, seven European cities all across the EU will implement digital technologies into their energy-saving systems and +CityxChange will connect different urban devices and structures through IOTA technologies.

“Smart cities is one of the fastest growing cross-sectorial arenas of innovation for IOTA. Building on our work and partnerships across mobility, energy or data marketplace, these smart city ecosystems bring it all together.”
Wilfried Pimenta, Head of Business Development at the IOTA Foundation.

The project is supported by the Norwegian University of Science and Technology, one of the best Scandinavian universities along with several private companies and NPOs.


Russian Ministry of Housing and Communal Services is in the middle of developing a blockchain-based system for managing urban energy resources, the Deputy Minister Andrei Chibis commentary in March, 2018. It allegedly optimizes the overall monitoring of energy and water consumption and tracks citizens’ payments.

Chibis also claimed that with the help of this new platform they will offer consumers more flexible tariff plans, similar to the way mobile operators do.

Besides, Moscow digital voting system called “Active citizen” has been using blockchain since 2017. It allows both residents and organizations to join the network and contribute to e-democracy (for example, one of the university nodes – Higher School of Economics). As noted by the service, “the use of blockchain technology boosts confidence in the voting process and guarantees its immutability, since anyone can follow it by joining the network.”

The future is now

To conclude: smart cities are the next big thing. Many big agglomerations all over the world are implementing IoT, AI and other innovative technologies, making a sci-fi utopian future seem closer. Blockchain can definitely contribute to the “smartizing” of the world: data processing and storage, digital IDs development, peer-to-peer transactions, e-voting or public services monitoring. Perhaps, we are yet to see more blockchain-based cities.