blockchain in construction

1. IBS Live
Blockchain in Construction:
Real-World
Applications That
Benefit Builders &
Trades

2. IBS Live
The material in this education session has not been reviewed, approved, or endorsed
by the National Association of Home Builders (NAHB). The topics discussed and the
materials provided herein are for informational purposes only, are not intended to be
an exhaustive presentation of information on a particular subject, and should not be
treated as such. The speaker or speakers are not acting on behalf of or at the
direction of NAHB.
NAHB specifically disclaims any liability, loss or risk, personal or otherwise, which
may be incurred as a consequence, directly or indirectly, in the use or application of
any of the materials presented in this or any other education session presented as
part of the International Builders Show®.
NAHB Disclosure

3. IBS Live
Meet Your Speakers

4. IBS Live
Make no mistake: we are at the dawn
of a next great wave of disruption.
Doubts?

5. IBS Live
Quote
“Enterprises are not just experimenting
with blockchains, but actually moving
into production and scale with
blockchains.”
- Bridget van Kralingen, IBM’s Senior Vice
President of Global Industries, Platforms and
Blockchain

6. IBS Live
Quote
According to Deloitte,
“The only true mistake
organizations can make regarding
blockchains is to do nothing.”
6

7. IBS Live
Quote
“Even if blockchain technology as we
know it today is still a work in progress,
the decentralization revolution has
already begun.
Our world has already forever changed.”
- Alison McCauley,
Stanford MBA and best-selling author
from her book, “Unblocked”
7

8. IBS Live
Quote
“Blockchain is much bigger than the internet.
It has the potential to transform industries
that have historically been government
regulated because they are so big.
For example, banking, real estate, insurance,
venture capital, health care, and government
itself can all be completely transformed by
blockchain.”
- Venture capitalist and billionaire Tim Draper

9. IBS Live
Great Things can Happen when Construction Meets Blockchain
Blockchain (distributed ledger)Construction Industry

10. IBS Live
Next Wave
Cross-Organizational Integration

11. IBS Live
Past
ERP applications
Customer
Service
Dept.
Accounting
Dept.
Project
Mgmt
Dept.
Sales
Dept.
Departmental Integration

12. IBS Live
Future
Blockchain Technology
Cross-Organizational Integration
TradesGeneral
ContractorLenderArchitect

13. IBS Live
How can that removal of
friction across
organizational boundaries
help you make
more money?

14. IBS Live
 Provide Much Shorter Construction
Project Cycle Times?
 Significantly reduced Overhead?
 Facilitate Growth and Scalability?
What if these re-envisioned business
processes could:

15. IBS Live
 Project cycle time reduced by 30%
or more…
 Significantly increase first pass
task completion and approval
 Reduce capital needed by
Subcontractors by up to 70%

16. IBS Live
New level of
competitive advantage

17. IBS Live
There is a severe shortage of
Subcontractor Capacity…
Especially Competent Labor Capacity!

18. IBS Live
How?

19. IBS Live
High-Velocity Construction
Trade Payments
Made within 24-hours after task
completion, seven days a week.

20. IBS Live
How a homebuilder
in Atlanta solved
their subcontractor
shortage…
And became a Hero to their Subs!

21. IBS Live
Legacy Draw Process

22. IBS Live
Finally!Waiting!
Blockchain Based Payments
Draw
Request
1
Project
Inspection
2
Inspection
Report
3
Create
Draw
Transaction
4
Issue
Draw
to
Builder
5
Builder
Payment
to
Trades
6
Trade
Processes
Payment
7
Trade
Deposits
Funds
8
LENDER
TRADE
CONTRACTOR
LEGACY BUSINESS PROCESS - PAIN POINT BUILDER
PAY

23. IBS Live
Blockchain Draw Process

24. IBS Live
TRANSFORMATIVE BUSINESS PROCESS APPLICATION
Draw
Request
1
Project
Inspection
2
Inspection
Report
3
Create
Draw
Transaction
4
Issue
Draw
to
Builder
5
Builder
Payment
to
Trades
6
Trade
Processes
Payment
7
Trade
Deposits
Funds
8
LENDER
TRADE
CONTRACTOR
PROJECT
MGR.
Faster Cheaper Better
BuilderPay
ACH
Gateway
(fee incurred)
Trade Contractor
Checking Account
Commitment
Tokens
Commitment
Tokens
• Copyright 2018 – HBw3, LLC | All rights reserved
BUILDER
PAY
Work verified &
Payment Approved
Commitment Token state changed from
“Committed” to “Approved”“Approved” to “Paid”
Blockchain Based Payments

25. IBS Live
Secure
Micro-Draw
Technology

26. IBS Live
But why
Blockchain Technology?

27. IBS Live
Three components of
blockchain technology
Asset
Tokenization
Distributed
Ledger
Technology
Smart
Contracts

28. IBS Live
Asset
Tokenization

29. IBS Live
Caesars
Non-digital tokens that can only be used
within the casino
Casino Chips

30. IBS Live
Project ID
assigned
Commitment Tokens for Project
With the Project
ID assigned,
these digital
tokens can be
used only for this
Project
Commitment
Tokens have 3
Statuses:
• Committed
• Approved
• Paid

31. IBS Live
Commitment Tokens for General Contractors
Once received by
the lender, these
digital tokens can be
used specifically for
payment for these
Project Vendors and
their associated
Tasks
Project ID
Committed Status
Commitment Tokens
Received by
General Contractor
• Committed
• Approved
• Paid

32. IBS Live
Commitment Tokens for Project Vendors
Once received by the
vendor, these digital
tokens can be used
specifically for
payment for these
Project Vendors and
their associated Tasks
Project ID
Vendor ID
Task ID
Committed Status
Commitment Tokens
Received by
General Contractor
• Committed
• Approved
• Paid

33. IBS Live
Commitment Tokens Payment Approval
Once a Project Task is
completed, the status
changes to “Approved”
and are immediately
available for deposit
into the Vendor’s
checking account
Project ID
Vendor ID
Task ID
Approved Status
Commitment Tokens
Received by Project
Vendors
• Committed
• Approved
• Paid

34. IBS Live
Project ID
Vendor ID
Task ID
Paid Status
Let’s be real, vendors don’t want “digital currency”. They want “real dollars”
deposited into their own “checking account”.
Commitment Tokens for Project Vendors
ACH Transfer Real Dollars!

35. IBS Live
Smart
Contracts

36. IBS Live
Legacy Contracts

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Smart Contracts

38. IBS Live
In Code We Trust
Blockchains, in essence, make it possible
to replace a middleman
— and all the activities a middleman
would perform — with code.

39. IBS Live
Legacy Purchase Orders
become
Smart Contract
Purchase Orders

40. IBS Live
Legacy Lien Releases
become
Automatic, Smart
Lien Releases
When Payment is Made

41. IBS Live
Distributed
Ledger
Technology

42. IBS Live
The core idea behind blockchains
— a database that is maintained by a
network of users
— was first described in a 1991 paper by Dr.
Scott Stornetta and Dr. Stuart Haber, while
working at research center Bellcore.
At its most rudimentary level, you can think
of a blockchain as a very special database.

43. IBS Live
Why Everyone Missed the
Most Important Accounting
Invention in the Last 500
Years
Blog Post by Daniel Jeffries
Click here to open post

44. IBS Live
Triple Entry
Accounting

45. IBS Live
Debit Credit
5
9
2
10
Debit Credit
5
9
2
10
Debit Credit
-5
-9
-2
-10
5
9
2
10
Builder Book Vendor Book
Blockchain Public Book
Triple Entry Accounting
It’s hard to lie when everyone is watching
Mindbridge A.I. Auditor
Public Book,
Keeping
everyone honest

46. IBS Live
A Common Ledger
becomes
A Single Source of
the Truth

47. IBS Live
No more burdensome
reconciliation and
payment disputes.

48. IBS Live

49. IBS Live
To Learn More…
About Blockchain-based Construction
Payments…
Visit
www.builderpay.io

50. IBS Live
Speaker Contact Information
Don Bowden
BuilderPay
Don@BuilderPay.io
https://www.linkedin.com/in/don-bowden/
Collierville, TN
https://www.linkedin.com/groups/13694790/

51. IBS Live
Thank You!