What is a decentralized smart neighborhood?

We define a decentralized smart neighborhood as a community in which a critical mass of commercial, governmental, and civic processes are coordinated through distributed consensus protocols. Distributed consensus protocols – namely, blockchain – use economic incentives and cryptography to give people the ability to cooperate at scale without top-down bureaucracies. In other words, blockchains can provide the foundational layer for management systems that are coordinated securely from the bottom-up.

This innovation presents an opportunity for urban neighborhoods to reimagine local processes to be more transparent, participatory, and efficient.  It also presents the possibility of a new kind of “smart city” – one in which ownership and control of data and key infrastructure are distributed rather than concentrated in the hands of a few.

Here are just a few examples of how blockchains will be utilized in smart neighborhoods of the decentralized future:

  • Digital identity: Conduct elections and other decision-making processes online without relying on expensive third parties to protect against identity fraud.

  • Micro-insurance: Manage risk locally by creating communally controlled financial safety nets.

  • Incentivized environmentalism: Reward individuals and businesses for carbon offsets through verifiably scarce local currencies.

  • Energy sharing microgrids: Incentivize renewables by enabling residents to exchange excess electricity with one another directly.

  • Divisible real estate: Lower barriers to investment by converting ownership rights into unforgeable digital tokens.

These urban blockchain use cases and many others are in active development, yet lack the hyperlocal environments and communities necessary for iterative testing and product development. We envision neighborhoods and municipalities connected by active participants as public servants in their own right.