Final thesis first draft | Junyibai

The Apply And Influence Of Blockchain On Spatial Connection And Urban layers -- In Terms Of Form, Property And Application.

Junyi Bai SN:17099583 Theory Final Draft Submission 10/06/2018 Theory Tutor: Daniel Koehler

BPro March UD Research Cluster 17 2017/2018 Bartlett School of Architecture, UCL London, UK.

ABSTRACT As the blockchain idea and technique being introduced and applied on economy, technology and many other subjects, we realize the potential of its distributed ledger logic can help to reshape the current city.

This paper focus on the distributed form, property relations and smart technical aspects of blockchain, combining with the example of design project, the paper aims to introduce a new way of designing a city with logic of connection and updates. By having the top-down centralized and decentralized city, and the spontaneous distributed city, the design goal is to design a fourth type of city by connecting different types of space through negotiate and updates, a new layer of complexity will be added to the urban material and morphology.

KEYWORDS blockchain, spatial transaction, shared ownership, collective form, mereology, smart contract

CONTENTS 1.Background 1.1 History of blockchain 1.2 Definition of blockchain 1.3 What range of blockchain do we talk about 1.4 Relates to design 2.Blockchain vocabulary block, chain, data, gas, ledger, decentralized & distributed 3.Form of blockchain (architecture background) Investigation of collective form 3.1 Blockchain with architecture and urban design 3.2 Collective form and linkage 3.3 Mereology 3.4 Case study: Tokyo Bay 4.Ownership of blockchain (economic and political background) 4.1 How ownership changes the urban form 4.2 Case study: urban village 4.3Types of blockchain 4.4 Spatial transaction 5.Technique of blockchain (technology background) 5.1 Internet of Things and blockchain 5.2 Small contract 5.3 Smart property 6.Conclusion

1. Background

Figure: origine of trading network

Figure: First computer

The invention of Bitcoin led to a decentralised database system called blockchain. It enables information to come from multiple sources and form a bottom-up database. Each record includes a transaction timestamp, and a block of detailed information is considered a ‘block’. The information is all connected and encrypted. Therefore, it is credible and immutable. This method can be applied to the design of a growing city. People who have access to new ground will be recorded in the blockchain database with temporal and spatial information. This system can then calculate the interactivity, accessibility and connectivity of every new ground to derive their value attributes. The database will reflect the pattern of growth and mark down the changing needs of different conditions. AI can learn from data models and the causality between humans and space to adjust the sizes and positions of assembly units. It can also define the proportion of activities and space according to the specific design indicators and cases. The autonomous design process requires AI to carry out a closed optimisation iteration within a system to get feedback and consistently make adjustments so as to achieve optimal configuration and productive self-renewal. The design project has an evaluation system indicating the area with more value by assessing the space through its connectivity, accessibility and openness. The value can then influence the housing prices and centrality of the area. As the AI becomes more powerful, it will no longer need to learn from certain patterns to generate a new ground sequence. With self-conscious and unsupervised learning, AI, as a smart calculation system, can ensure the city is well-designed with its optimal spatial form and most sustainable function arrangements.

Current city with centralized top-down planning, regardless of human behavior and complex economic pattern, causing no connection and interaction happen between urban elements. The strict and immutable property rules result in a simple logic of urban growth -- buildings are limited within their own plot, the growth of floor plate can only be vertical. The vertical multiplication of spaces only relates to the central core, which makes the navigation and circulation of value very restricted and inefficient.

Wishing to provide a new urban design thinking, the design project speculates on how the concept of blockchain can help with the situation.

Instead of only making vertical extrusion, the new logic of growth is by connecting the new space with exisiting surroundings through negotiation, that is, spatial transaction. Traditional centralized system and inefficient trusted third parties can no longer satisfied the constant change of proporty rights through the spatial transaction. Concept of blockchain such as distributed ledger, trustless and permissionless system and the use of cryptography opens up the opportunities for efficiency, peer-to-peer(P2P), and eliminates the need for a trusted third party which can bring great convenience to the process. According to blockchain logic, when block is connected, new transaction information will be added to the data.

The update of space relation, presented as adding new connections or shifting of space, can therefore be expressed as the update of transaction of blockchain. The original block remains the same while the new block added on it through a chain (linkage). The space transaction will include a transaction timestamp and a edge data to record the updates.

As the untemperable character of blockchain, the one with longest dataset of history of transaction will be recognized among others, the physical space with more updates of connections will be seen as more valuable.

The blockchain is a distributed ledger which each block store information about every transaction history. With a direct peer to peer logic everyone can add information and view the past history. As it turns from online to offline, the digital data became physical as the livable and walkable spaces. The spaces under the scope of blockchain discription, can be comparable to what it is now descirbed as building element: wall, slab, column, staircase, but added a layer of function and time. Blockchain element has the nature character as private or shared, and through time this character can be changed by the spatial transcation.

With linkage, the connection has mutiple possibilities as the space can grow both vertically and horizontally with a pattern of spatial sequence. Different morphology can be created according to the position and direction of the connection points. The practicability is that the growing logic is simple.

Spaces and linkages are abstract into vertices and edge. According to the graph theory, only the position and relationship of vertices but not the shape and distance is important.

Here, the digital expression and physical space can be transform back and forth. With the use of graph language, space elements are abstracted into block with vertice and edges. When the block is connected multidirectional, a three-dimensional network of space is generated, which is the physical form of the blockchain.

The physical exisitence of the data for each block is a sensor with smart contract program. It is a combination of offline execute of spatial transcation and online calculation. During a process of spatial transcation, the sensor on each physical block first recognize which block to be connected or shifted, its character -- whether it is private or shared, and calculate the cost and connectivity throughout the system. People who have payed to access the block will be recorded as well so as to calculate the spatial connectivity and accessibility. Due to the peer-to-peer feature of blockchain, no third party is required, every block is connected to the integrated network -- Internet of Things(IoT). Offline data provided from each node can be transformed into predictive algorithm through online analysis, and compiled into automatic system, so as to improve design efficiency and reduce transaction costs.

The data block uploaded from each transaction contains several pieces of information: timestamp, sender, recipient, transaction cost and data. The data at the end of the block is used to record the esatblish and execution of smart contract.

During the transaction, the owner and user negotiate to control and optimize the spatial performance through assess transaction cost and spatial accessibility. There are two factors to be considered at the same time. The introduction of transaction cost can help the system to calculate the growth efficiency more effectively and fairly. Spatial accessibility can be more intuitive to evaluate the practical value of space, so as to define the next cost. The two evaluation systems are different but mutually constrained to ensure that space transactions are feasible in both the economic and social systems.

Motivation for dealing with blockchain 1. Distributed ledger enable users to upload the information of transaction to the system, the monitor and verify becomes peer-to-peer, without the necessity of a trusted third party to oversee the transaction(e.g. a bank). This process can be fully automated and done anytime within seconds and from anywhere around the world, which greatly convinient the transaction. In the project the transaction include constantly change of the nature of space between private and share.

The ownership of the space depends on who pays to go through the space, and often involoves a shared ownership. With traditional third party verify system, we can never achieve the same efficiency brought by blockchain technology.

2. The use of cryptography technique ensure the trustless and anonymous of the transaction. The information of the transaction is immutable and can be traced back. Therefore all the transaction history is open and transparent and users can monitor and validate the data by themselves and decide whether to make transaction or which space to make transaction with.

3. blockchain network provide a platform for people to perform peer-to-peer validation and transaction. Unlike Uber, Airbnb and Paypal which also provide platforms for the peer-to-peer transaction for ride, spare room and money, blockchain is neither a third party nor a database, it is a service provides the infrastructure, simulated network and acknowledgement for anonymous and trustless transaction.

4. Smart contract technique is built based on the blockchain system, it is the actual application of computer protocol to facilitate and verify the performance of a contract in real time without a third party. This secures the transaction superior to law and reduces the transaction costs due to time and human resources.

Design of a urban form: goal of a physical chain The current urban planning method is zoning, based on a simple logic of function distribution or transportation efficiency. When introduce the concept of blockchain into the urban design, the multi-layer and overlapping can be achieved according to the chain structure of data block. This can be the final goal of the research and the project: chain of chains. There are three types of chain: private chain, public chain and consortium chain.

And three types of distribution network: centralized, decentralized and distributed. The chain of chains is the fourth type of chain -- the overlap and interact of different chains, which function as a whole. (mereology) Each chain will act as a part of the whole urban system, but the form and performance of the urban whole will depend on each basic chain.

The negotiation and adjustment of the relationships between part to part and part to whole happens during the spatial transaction. Each chain has its own function and character, when the chains are connected, a layer of complexity appears. That is to say, the city can be designed and functioned as a stack of layers(Benjamin H. Bratton), collage and overlap with layers of programmatic use, navigation infrastructure, structural system and data platforms. Instead of performing on their own, the chain of layers interact with each other and together forming a coherent whole.

Limitation Blockchain is a rather new concept, its technology and logic are very complex and multifaceted. It is originally designed to subvert the traditional centralized economic behavior, and the technology and application are still being developed and tested. This reseach only act as an introduction and inspiration of the potential of blockchain idea apply to architecture and urban design.

Through the paper, key definitions are given, followed by the link of various concepts. But no specific building or city form is proposed. The research focuses on three main aspects so as to seek new design idea to possibly solve the problems brought by the traditional top-down masterplanning method.

The design project is computer-aided, without physical verification, nor strict site constraints, so it will only be a display as a way of thinking. Aim for further study will be to control the detail computation for specific navigation patterns, programmatic distributions, and flexible structural performance under the requirements of specific site and enviornment condition.

Strucutre This paper studies the potential of applying blockchain idea in design and generate spatial detail as well as urban form. The research on blockchain focuses on three aspects: distributed form, transformable property rights and smart information technology. The first section explores the possibility of the physical spatial form of distributed network in the architecture and urban design by studying the Collective Form theory of Maki and the precedents of various patterns. Define the concept of block and chain in terms of physical space, and compare the three different distribution patterns. The second section studies the role of porperty right in urban design, introduces the reasons and influence of the transfer of the property rights. Urban village as an example are given to demonstrate the impact of traditional property rights on urban form and point out the need of change. Guided by the concept of blockchain, change of property rights through spatial transactions can be explored and discussed. The third aspect of study focuses on the smart technology based on blockchain such as smart contract and Internet of Things, combine with offline sensor and online data analysis, the technology can help to achieve smart design.

2.Blockchain vocabulary DATA

Figure: typical data from one transaction

The data block uploaded from each transaction contains several pieces of information: timestamp, sender, recipient, transaction cost and data.

The data at the end of the block is used to record the esatblish and execution of smart contract. In the design project, this information contains the circumstances of the use and transaction of different space elements. The information is uploaded to the network for analysis, so as to calculate the amount of people pass through at different times, the speed, the proportion of people who stayed, the number of connection and disconnection of the element with other elements.

Gas and transaction cost

Figure: Smart contract https://vomtom.at/what-exactly-is-the-gas-limit-andthe-gas-price-in-ethereum/

If users want to use and execute the smart contracts, they must pay a fee for the implement. This is called Gas. The cost is pay to the actual nodes which spend the storage, computation and power resources to execute the contract. In order to calculate the cost of implement, every statement in the contract has a charging standard. But user have to define a maximum Gas value that can be spent. When the execution is completed or the Gas quota is reached, the smart contract will cease to execute. This is to avoid an infinite loop in the contract, prevents some repetitive statements from causing the program to stagnate. When there is a service, there is a cost. In the case of the design project, the production and transaction of the space costs. Similar as every statement in a smart contract has a charging standard, which reflects the memory and power consumption of this statement. Each building element also has a charging standard, which reflects the level of difficulty of people reaching elements and connecting this element with other elements.

Gas is different from the transaction costs. If user choose to arrange the transaction using smart contract, the costs need to be agreed by both parties. The Gas will act as a guiding price for the set of costs.

But in the Smart route, costs of spatial transaction is the same with Gas. But For example, the difficulty of negotiation of connecting private space is higher, so the cost of passing a private space will be higher. But sometimes go through a private space will save the distance of the route, so people will choose their own route within the scope of their own funds. When apply the Smart route, user will have to define his route Gas limit, in order to let the machine calculate a route within his pay range.

Block Chain Types of chain 1. public blockchain The public blockchain refers to a common blockchain that anyone in the world can read, process transactions and get confirmation. In the design, public chain is chain of public spaces that all people can pass through with only very small amount transaction cost.

2. private blockchain A fully private blockchain which also called Token-less Blockchain, is a blockchain which can only be written by certain people or organization. Read permission is also restricted to public or certian people. It usually occurs without the need to transfer the value between the nodes and only share the data between different trusted parties. Private chain may apply on database management and auditing within a company. In the design, private chain refer to the private space or connected private spaces when no one access through it. Whithout spatial transaction, no cost needs to be pay and the space is only used by the owner. In some cases, if some user wants to process the transaction with a private chain, the transaction cost will be higher than the public chain because the permission needs to be rewritten.

3. consortium blockchain The consortium blockchain refers to the blockchain that its consensus process is controlled by the pre-selected node; for example, 15 financial institutions form a community, each of which runs a node. In order to make a block/transaction effective, it needs to be confirmed by 10 of them. Consortium blockchain can be regarded as "partial decentralized".

Private space Relaticely closed space with less than or equal to two entrances. Negotiation for transaction with this space requires a high transaction costs. A special property ownership may lead to a situation which transaction could not happen due to the unaffordable cost.

Shared space Relatively open space, allow all people to pass through. Some private space will become shared or semi-shared space after spatial transaction, some shared spaces at the edge which have not been connected yet will consider as semi-shared or private space according to accessibility.

linkage Usually can be bridge, corridor, staircase,etc, which connect private space and shared space. The nature of linkage belongs to semi-shared space because only the beneficiary will pass through. The value of linkage is to provide a variety of connections, which is the key part of spatial transaction.

Figure: Bridge as a linkage

The linkage is a significant part of the collective form. Maki suggests that comprehensible linkages are essential elements for a ‘humanly evocative environment’ in urban design. (Maki, 1964) They are far more than primary links between separate spaces, and they have secondary meanings and uses in the system. For example, a bridge between buildings not only allows people to commute over it but it also defines or enframes the space below it. A single bridge has multiple levels of significance。Maki states that ‘each deck of a tower or slab must be transparent to us, and each level of activity must be unique. Then, and only then, will we sense three-dimensional linkage’ (Maki, 1964). Maki’s opinion supports the assembly design of slabs that define different space and usage at different positions or forms.

Decentralized & distributed

Figure: diagram of decentralized and distributed network

graph This concept is about sets of vertices connected by edges.

A graph in this context is made up of vertices, nodes, or points which are connected by edges, arcs, or lines. A graph may be undirected, meaning that there is no distinction between the two vertices associated with each edge, or its edges may be directed from one vertex to another.

Figure: vertices and edge of things

3. Form of blockchain a detailed case study exploring the research capsule building (centralized) Joint Core System(decentralized) tokyo bay(distributed)

centralized

decentralized

distributed

4.1 How ownership changes the urban form The ownership of the property will influence the development of specific spatial form. The property rights record the relationships between the participants involving and the shared resource(Demsetz, 2002). Whether the property rights are effectively defined, the game status, value orientation, information acquisition and rationality will affect the transaction results of specific cases.

There are two ways that subject of property rights will affect the urban design through transaction costs: first when a property does not have an owner or the owner is hard to define, the value of the property will decrease, thus the transaction costs will become lower due to rent dissipation; second is called line of fixation, it is when the subject of property rights is strictly protected, for example, government or the army. In this case the transaction costs will be too high or unworthy that the spatial transaction will not happen. The situation is too restricted that the market mechanism can not play the role of optimizing the allocation of resources, resulting in the decline of the region or the waste of space.

It is important that at the begining of the transaction we should clearly define the ownership and the nature of space, this helps to set up the original status and cost. During the spatial transaction we are able to study how the transaction costs will change the distribution of ownerships, and vice versa. With blockchain concept and smart contract, the property rights is no longer immutable, different degree of shared ownership can be achieved through interaction and negotiation. All changes of ownership will be recorded in the distributed ledger automatically, this can present as a ownership pattern.

As the emergence of sharing economic, shared ownership greatly reduce the inefficient use of resource both in terms of time and space, due to the privatisation of ownership. The convinient of collective access to resource strengthens the social interaction, increases the oppotunities to generate new value based on the exchange and communication.

4.2 Case study: urban village The urban village is a common social and economic phenomenon in the cities of China. During the government's expropriation of farmland during the process of urban expansion, the villages are left alone because of the high cost of expropriation. Due to the management is taken control by the village committee instead of local government. The construction and development of the village in the city is rather slow, and illegal high density residential buildings are built by villagers in order to gain more rent. Eventually it became an undeveloped area within the city center with a hidden danger of security. To a certain extent, it has hindered the healthy development of the city, and is not conducive to the stability and harmony of the whole society. Recognizing this problem, the government took action on reconstruct the urban villages, set some construction rules and gave financial support. Because of the existing land, housing development costs are relatively low. But the land ownership did not change, it belongs to all villagers and cannot sell seperatly. If people from outside buy the property, he only has the right to live but he does not own it. This property in China is called small property.

Figure: Urban VIllage

The historical institutional constraints will affect the value of property and interests of both parties. The collective property right of the urban village has an indistinct ownership, unclear power and responsibility, and ineffective protection from the law and government. The individual housing within the collective property can not be sold seperately and is not protected by the law. Thus, the transaction value of most urban villages reduce due to the ‘rent dissipation’.

5.1 Internet of Things and blockchain Internet Of Things (Iot)

Figure: Everything connect to internet and sensor

This is similar to what we have begun to do on the Internet to create and share information and products. The Internet of things connects people and things through an integrated network by using sensors and software. The devices, resources, production lines, logistics networks and consumer habits are uploaded to this network in the form of data. People or programs can view or analyze these data according to their needs. The cost of information acquisition is almost zero. The big data are converted into predictive algorithms and incorporated into automated systems to improve production efficiency. The platform of the Internet of things has the nature of distributed and point to point, which brings together millions of small participants of social enterprises and producers, to form a global sharing system. This system constructs a same degree horizontal development of economies, eliminating the middle man in the vertical economy value chain, thus lower the past marginal cost.

Blockchain Supporting The Iot Blockchain refers to the technology of the distributed ledger, including the data structure, the basic P2P network, and the consensus algorithm.

A large number of global distributed ledger can be run on thousands of computers, enabling everyone to have access. And any asset that can be digitized can be included in the blockchain, such as land registration, biodiversity data, supply chain information, and voting, all of which can be stored, moved, traded, exchanged and managed without a middleman.

We can see that the combination of blockchain technology and Internet of things will be an inevitable trend. Characterists of blockchain such as the distributed ledger network, anonymous trust system and information untamperability can help the automation of the Internet of things, and provide certain level of trust and data protection. Different valueable isolated islands are connected through the blockchain and ioT to eliminate the repeated verification and operation, so as to greatly improve the operation efficiency and reduce the transaction cost.

5.3 Smart property The concept of smart property was first proposed by Nick Szabo in his paper "the Idea of Smart Contract" in 1997. The original form has emerged. If you connect your car to the Internet, through an protocol device, only the person with an encrypted token can start the engine. This greatly reduces vehicle being stolen. In Australia, 45% of the cars have been installed with anti-theft devices, and only 7% of them have been stolen. The same control over property rights can be applied to space.

If you own the space, your right to use it will be permanent or 70 years (depending on the local property right law). With the application of an smart contract, if someone wants to rent your space for a day, when he completes the online payment, the smart contract will activate the key for him to enter the space, and after a day, the key will automatically deactivate.

When the resource ownership is combined with the blockchain, the implementation through the smart contract will change the existing transaction. Blockchain can be used for registration and transactions of any asset, including tangible assets such as real estate, automobiles, and other intangible assets such as stocks, savings, intellectual property rights, etc. The core of smart property is controlling ownership. Property registered on blockchain can be used at any time through private keys.

The use of blockchain technology in smart property is a new concept.

The use of code to control property greatly improves the convenience of the transaction and reduces the rate of transaction disputes.