Smart cities around the globe using Blockchain Technology

5 July, 2018

There's a spectrum when it comes to bitcoin investors. At the low end are casual investors, hoping to ride the next bull run to a healthy profit. Somewhere in the middle are serious techies, who believe that blockchain represents the next big leap forward for networked technology. And at the extreme end are those for whom cryptocurrencies and blockchain have become a way of life.

Despite relatively low adoption rates worldwide, some pockets of blockchain acceptance have flowered into full-fledged communities. Like the bio-domes and retro-futuristic planned cities of decades past, these little enclaves of blockchain technology believe they represent a new way of communal living, bettered by technology. Here's a quick look at some of the major blockchain communities - big and small - around the globe. We're going to look at where they are, how they've integrated blockchain into day-to-day life and what it means for the rest of the global community still slogging it out with traditional centralized infrastructure.

1. Sol, Puerto Rico

The Sol community in Puerto Rico has invited controversy ever since its founding. The front man for the project is Brock Pierce, a child star turned cryptocurrency magnate. Forbes estimates that his net worth is between $700 million-$1 billion.1 But Pierce's past remains clouded by allegations of child abuse at his former Digital Entertainment Network company in the U.S. Pierce ultimately settled those allegations for $21,600.

Sol was the name Pierce gave to his community of ultra-rich investors in the Old San Juan neighborhood of Puerto Rico after the initial name, "Puertopia," was discovered to mean something similar to "eternal boy paradise" in Latin. Given the previous allegations concerning Pierce, changing the name became a priority.2

At the heart of the Sol project is a desire to transform the Old San Juan neighborhood with blockchain technology. The project's ultimate goal is to route all payments made within the neighborhood through a blockchain and use blockchain technology to manage critical infrastructure, like electricity.

This is the source of the second major controversy. Puerto Rico is still reeling from the effects of Hurricane Maria, and cryptocurrencies are notoriously hard on electrical grids. Critics of Sol view the community as a form of economic colonialism, which seeks to take advantage of Puerto Rico's outdated power grid to position itself as the de facto distributor of electricity on the island.

At least one project observer disagrees with this analysis.

"The block chain technology architecture provides a level of security and next-generation governance self-inherent through predetermined and evolving protocols, which is exactly what is needed on this beautiful island," said entrepreneur Joshua Boles. "The bitcoin Grand WIZARD (BP) )[sic] made me a believer as it relates to this conversion to an epoch where all things are sustainable, available and resources are plentiful. The Silicon Valley connection, especially with target municipalities that I have personally worked with before and Puerto Rico, is quite possibly the most powerful piece of all of this as the government pays way too much money for their infrastructure."3

At least one thing is certain - Puerto Rico is a good strategic fit for the crypto ultra-rich. Although Puerto Ricans enjoy U.S. citizenship, Puerto Rico is not a U.S. state and has a separate - and much more lenient - tax code. In other words, the capital gains tax that would affect heavy crypto bag holders in the U.S. don't apply in Puerto Rico, yet the island does enjoy limited state-like benefits, like access to some federal funding and military protection.

2. Arnhem, the Netherlands

The town of Arnhem in the Netherlands is slowly transforming itself into a cryptocurrency-driven community of 150,000 people. The town has the highest concentration of bitcoin merchants in the world, squeezed into a small town square that bills itself as "Bitcoin City."4

Arnhem's ongoing development as a crypto mecca is largely due to the efforts of resident Patrick van der-Meijde. Van der-Meijde was an early bitcoin adopter but quickly became frustrated by his inability to spend bitcoin locally on goods, like food and coffee. He took on two partners and developed a bitcoin payment system that could be turned over to local vendors that offered instant conversion from bitcoin to Euros, allowing them to keep prices somewhat stable despite what happened in the larger bitcoin market. bitcoin City currently boasts at least 45 bitcoin-accepting businesses, including a large grocery store and even a hotel.

3. Dubai, United Arab Emirates

Dubai is not yet a fully blockchain connected city, but that is the goal, according to some smart-city developers. As a relatively new global mega-city, Dubai can design its information and infrastructure grid essentially from the ground up; it doesn't have the legacy concerns of older metropolises, like New York City or Paris. This has allowed Dubai to take a hard look at blockchain technology when it comes to designing its smart-city interfaces.5

Taking a cue from fellow smart city Taipei, Dubai has partnered with IBM and Consensys to form Smart Dubai. The Smart Dubai system begins with integrating blockchain technology into the city's government structure. Ultimately, the city's tourism, health, and police departments hope to be operating on the blockchain.

Over the course of 2018, the city also plans to create a blockchain-as-a-service platform for startups. By 2020, Dubai hopes that delivery services using the platform will be fully integrated into the city's economy. Aisha Bin Bishr, the director general of Smart Dubai, says the plan is ambitious but completely attainable within the set time-frame.

"We have a very clear objective to make Dubai the capital of the blockchain industry," she said. "By 2020, we'll have 100 percent of applicable government services and transactions happen on blockchain."

Smart cities are nothing new, but the blockchain is taking this retro-futuristic vision and making it a reality in communities as diverse as Old San Juan, Arnhem, and Dubai. Key to the integration of blockchain technology is the so-called Internet of Things. In Taipei, another model blockchain community, one of the goals is to issue each citizen a digital card that can communicate with the city's infrastructure grid to relay information about pollution, traffic, and other day-to-day concerns. The sheer amount of data that would need to be handled by such a system would overload most central processing services, as well as introduce a one-stop shop for disruptive hackers or other malicious actors.

Communities are by definition a web of people living, working, and playing together. In essence, they are already decentralized, with each person or neighborhood forming a node in a larger social web. The blockchain apes this natural order and introduces a technological spin on the old system of city management. Blockchain technology is still very much in its infancy, but smart cities like Sol, Blockchain City, and Smart Dubai are proving that blockchain is more than just digital money; it's potentially a revolution in how cities are managed. Moreover, it's potentially a revolution in how individual citizens manage and distribute their own data. As a sort of "power-to-the-people" movement, blockchain truly has no peer.


1) The Richest in Crypto, Forbes.

2) Making a Crypto Utopia in Puerto Rico, New York Times.

3) Creating Puertopia: 72 Hours with the Blockchain Grand Wizard, Steemit.

4) A Weekend in bitcoin City, Technology Review.

5) The Radical and Interconnected Future of Blockchain and Smart Cities, Medium.