Smart cities are constantly attracting global attention as they have become the aspirational point of many jurisdictions. There is a clear relationship between these urban utopias for the citizens for whom they are built and the systems, networks and devices that enable them to operate safely, securely and efficiently. Most importantly, they will be built entirely on the infrastructure of new financial technologies that support the flow of micropayments on financial “plumbing”, as well as other necessary utilities (water, energy, data, etc.) flowing over pipes, cables and fiber.
The main goal of a smart city is to optimize the works of the city and promote economic growth using sophisticated technology. Smart cities seek to increase sustainable goals, achieve sustainable goals such as energy efficiency and scarce resource management, and, above all, improve the lives of citizens.
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Some early, but promising, smart cities include Singapore, Dubai and Oslo. In Singapore, one of the most densely populated cities in the world, sensors are used to digitally collect information on traffic volume and pedestrian activity. The data is then sent to the organization for analysis to decide on the appropriate course of action for real-time flow redirection, but also to improve policy and planning. Other areas of focus on problem solving such as waste management and energy efficiency include the use of smart home technology.
Collecting accurate and reliable data from connected devices, therefore, is a critical and best way to gain the active participation of city dwellers to provide this data from their devices is to encourage them to do so. Clearly, there are some basic concepts that need to be in place to ensure the safety and well-being of citizens such as digital identity, personal privacy and consent to share data that will be the subject of another article.
A smart city has a responsibility on its citizens and reports on sustainable infrastructure and creates environmental, social and governance (ESG) issues in its design. Implementing incentive projects to encourage positive behavior will probably play an important role in solving the most important environmental, social and economic problems that the citizens of those cities face. In fact, as cities take steps to implement the UN’s 2050 climate targets under the Paris Agreement, incentive projects can help cities reduce mission emissions and reach a carbon-neutral future.
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Although smart cities are still a few years away with fully integrated services, the use of incentive systems based on the ability to transfer small amounts of value – or micropayments – can accelerate the creation of smart cities. Simply put, micropayments are very small quality transactions, often a fraction of a cent, actively interacting with a system or process that is created in real-time as a user or device. A recent example of this is the expansion of the Covid-1 check-in and tracking process. We are not currently rewarded for signing in to a public organization but perhaps if we agree to a greater degree. Any smart city initiative that requires data collection to be processed by the city’s analytical approach, which responds to the community’s behavioral “stylish” through an award, will benefit from a payment infrastructure that supports micropayments. Virtually all citizens and their devices become “city data processors (producers and consumers)” and are rewarded in real-time for their participation through micro-payments.
Smart City requires public shopping
Successful smart cities will be the main motivation. While people may generally favor technological advances in improving their quality of life, the misuse of personal information by centralized “big tech” platforms in recent years has undoubtedly made the public reluctant to participate in technology-driven data collection.
Among the Covid-1 pandemic epidemics, data breaches are on the rise. Confirmed data breaches in the healthcare industry alone increased by 58% in 2020. Smart City initiatives need to address these data privacy and security concerns, otherwise, their participation will be hampered by citizens ’concerns about how their data is being used when adopting technology.
Related: Smart cities are the future, but they can also threaten privacy
Therefore, consent-centric and confidence-building stimulus measures will be necessary to drive public approval of smart cities. Properly implemented, built on the design of citizens’ privacy systems, behavioral incentives can ensure a smoothly managed and secure city. To encourage citizens to respond in a particularly beneficial way, for example, to encourage road safety or waste recycling can be grossly ignored. In these examples, micropayments for complying with variable speed limits can be paid directly and in real time, as a reward for rewarding children for crossing the road in a safe place or for disposing of various types of waste properly.
Decentralized device based infrastructure
Smart cities (and their citizens) will rely on sensors and devices made in their clothing. The connected Internet of Things (IoT) device will be the city’s eyes, ears and hands, automatically collecting information from traffic flow to environmental issues, weather, supply chain tracking and city resource management (water, energy, waste, etc.). ). This data will be used to inform and adapt policies as well as to make realistic decisions so that city systems can run smoothly.
As new high-speed networks such as 5G or LoRaWAN are installed and the use of essential IoT devices is increasing for essential services and utilities, so will the need for automated and device-to-device micropayment. Electric vehicles for use pay for automatic tolls, pay for automated delivery by drones, or pay for devices that enable an IoT network gateway provider within their limits. The primary requirements for these fake networks of devices are scale, speed and security, as well as authority assigned on the basis of digital identity.
Related:No more pushing and shoving: digital ID solves the dilemma of privacy
Billions of current payment infrastructure may not always support connected IoT devices. The underlying infrastructure, the interconnection of different data points, devices and stakeholders, the incentive system and the key to the overall integrity of the Smart City are key to success. Distributed laser technology promises to be the basic network level for many of these systems operated under financial services, supply chains, interoperable identity systems and new decentralized economic models. In addition, decentralized ownership of data ledgers and stores in the core of the smart city makes corruption almost impossible, as no central entity controls access to the register.
First-generation distributed laser technology, or DLT, cannot scale to meet this demand without compromising security or decentralization, but next-generation DLT is emerging that can meet very high throughput requirements without compromising security and, therefore, believe that essential .
If we consider that smart cities need a new type of financial “plumbing” that supports all of their services and is probably based on distributed lasers, we must consider the type of digital currency that they will act as public DLT native token economy or Cryptocurrency. Much has been written about cryptocurrencies, stable currencies and central bank digital currencies (CBDCs), and it may be that some smart cities have their own citcoin coins, but we need to consider new types of currencies: machine money.
In Germany, financial regulators are openly discussing the creation of a special type of currency to support their “Industry 0.0” initiative – Euro-printed machine money which is digital cash but favorable for very fast transactions for devices. This will not require the complexity of the proposed “wholesale” CBDC for national financial institutions or the wallet-based requirements of the digital cash equivalent “retail” CBDC will be completely offline. This smart city “machine money” will be less complicated because the transactions will be a more straightforward transfer of tokenized central bank money and can only be linked to one financial institution. Architecture for these must be strong against cyber attacks, network failures and equipment errors, but will probably require less regulatory intervention.
Related: Blockchain technology can change the world, not just through crypto
DLT-based infrastructure will be the financial artery of all new ‘smart’ cities
These may seem like thoughts of the future, but smart cities are already being planned, designed and implemented around the world, and all of them need to consider sustainability and ESG issues in their design. As global populations grow and we try to tackle and adapt to climate change, food security, the passage of renewable energy and financial inclusion, technology will dominate our urban planning and development.
From Dubai, Beijing, and Singapore, and from upgrades to existing urban centers, to huge new cities in Africa, we will probably see reward-based incentive systems using micropayments to negate citizens’ behavior to achieve a favorable operational balance and measurable sustainability. To achieve this, fast and secure DLT-based financial infrastructure will be deployed, such as fiber optics for pipes, cables and other utilities, so that the flow of micropayments can become the commercial and behavioral lifestyle of all new cities.
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Rob Allen Electronic Funds Transfer at Point of Sale (EFTPOS) is an entrepreneur living in Australia. Rob is involved in various DLT projects, is a member of the Governing Council of Headra Hashgraph and serves as director of the supply chain DLT firm DataHash. Rob Nodal, CEO and Founder, is a consultant focusing on the sustainable development application of blockchain technology, which adds to his expertise within the sector.