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USA and China are leading the way in smart city investment with initiatives in the field looking set to reach $81bn by the end of this year, and will nearly double over the next four years according to a new report from the International Data Corporation (IDC).

According to the report, roughly a quarter of this year’s spend will be focused on three use cases: surveillance, public transport, and smart outdoor lighting. It is expected that by 2022, as the technology matures, the majority of investment will be directed at smaller, before unimagined uses. Admittedly there is a degree of speculation to the IDC’s Worldwide Semiannual Smart Cities Spending Guide though it is helpfully labelled just as that – a guide – as the range of potential uses in a smart city simply cannot be predicted at this point.

But it does signal an exciting year ahead whilst also trying to offer a digestible insight into the untold potential for smart cities. One aspect it highlights as a future biggie should resonate with anyone who lives in a crowded urban centre: traffic management.

Real-time sensors could smooth traffic flows on a city-wide scale and automatically adjust for optimal calming measures. This is reason for excitement as even small, incremental improvements can have dramatic knock-on effects for urban road traffic.

Consider Shenzhen, touted as China’s Silicon Valley. Its rapid growth has been underpinned by a technological boom within its borders but not at some cost; the former fishing village has seen its population explode to 12.5 million in the last twenty years to make it the 8th most populous city in the world.

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However, despite China’s solid reputation for completing vast infrastructure projects, a highway system can only handle so much volume. It is unsurprising thus that latest stats show that a car journey during Shenzhen rush hour can take twice as long as normal, placing the burgeoning city at #15 most congested in the world.

Where Do You Store a Smart City’s Data?

China is home to around half of the 1,000 smart city projects worldwide but these are currently just pilots and indeed, the challenges of big data as we know it would seem to pose an issue. This is where blockchain technology promises to unleash a range of possibilities.

It is Shenzhen’s own CyberVein that looks to pioneer smart city solutions on new tech in order to make the concept a reality. They are improving on Directed Acyclic Graph (DAG) ledgers which are a move away from traditional blockchains; with DAG, each time a user wishes to make a transaction their system, as a node, will have to verify the transactions of at least two other nodes.

The answer to the siloing of smart city data is to not silo it at all; decentralized databases made possible by a DAG might prove to be much more effective. Making sure such massive datasets are secure is absolutely vital and this is the particular focus of Berlin-based IOTA, who are also developing DAG architecture. Their idea goes like so: if vast amounts of data can be completely verified as true, so valid and unchangeable, then the value of this data will never be in any question.

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This brings true confidence into the idea of a decentralized network that would connect billions of devices. A major advantage of DAG architecture is that it essentially allows ledgers to be sharded – or broken up into pieces – which removes the need to store the entire ledger on each and every node.

This means that scalability is theoretically not an issue with DAG and nor is storing massive amounts of data which would be gathered by the petabyte in a smart city. Not least in Shenzhen, where the metropolis’ 3.4 million cars would generate a currently unfathomably rich bank of data each day. Who knows—in the not-too-distant future you might be able to travel into downtown Shenzhen without feeling like you’re at the top of an ever-extending bottleneck.

But perhaps not: Shenzhen is already home to the world’s largest electric bus fleet. Though what’s certain is the potential that the technology holds for making city living far more comfortable for the rapidly growing populations in urban centres worldwide.

Shenzhen is a city that will recognise these challenges better than most and they may already be leading the charge on a blockchain-powered smart city. Four years is a long time, though—it is yet possible that $158 billion shows itself to be a conservative estimate. CyberVein are among those who will work hard to make sure that it is.