Nov. 22, 2022
From Superbowl commercials to the collapse of crypto exchange FTX, Web 3.0 applications have made a lot of noise in the last few years. Much of that focus has been on the fluctuating values of NFTs and cryptocurrencies like Bitcoin, but a number of local governments have been exploring ways blockchain technology could support city services.
"When you start looking at blockchain technology, you have to understand and realize how much hot air is in the room, and how much of it is irrational exuberance on the tech and money side," says Mark Wheeler, Philadelphia's chief information officer, who launched a city initiative in 2021 to explore its potential. "But I do believe there's a 'there' there. And that it also has a use in government."
With a background in planning, Wheeler is passionate about community engagement and making open data accessible to the citizens of Philadelphia; under his leadership, the city released the SmartCityPHL Roadmap and created its first IT strategic plan with public engagement. He's also been investigating ways the blockchain could provide transparency to the data collection that fuels smart cities.
On a recent episode of the APA podcast series "People Behind the Plans," Wheeler spoke with planner Courtney Kashima to understand Web 3.0 and its potential — and potential pitfalls, particularly as we work to bridge the digital divide.
KASHIMA: You've been CIO of Philadelphia for about four years. What does that look like?
For businesses and planners, I think the most important thing we've ever done is focus on property data issues. We bridge silos and make sure that [we are communicating across] every system that touches on a property in any way, shape, or form. We built a very robust metadata catalog around all of it. You don't submit data to our warehouse without telling us what it is, how it's going to be used, and what its data structure is. I can't tell other cities and counties enough how important that is — that really is the liberation in the process.
KASHIMA: I think it's fair to say the public sector isn't often known for being on the leading edge of innovation, but you've been exploring Web 3.0 technologies like blockchain for cities. What have you discovered?
WHEELER: There's a way people speak about Web 3.0 that starts with, "What was Web 1.0 and what's Web 2.0?" Web 1.0 is the publishing of static information that has very little interaction with the reader or the user. And that was the 1990s into the early 2000s — you know, the proliferation of millions of web pages. Web 2.0 is the advancement. We get more broadband across the United States. We have significant technology changes, and now we have a proliferation of smartphones, which basically puts the web in everyone's hands. And now we're also enabling an entire economy around mobility and travel — you know, Airbnb and Uber and Lyft.
The criticism of Web 2.0 that 3.0 tries to rectify is that all of that data is owned by these central, privately owned operations. It's the Metas and the Googles. Every time they ask you to enroll, that's information they're collecting about you that they sell. You get no profit from that. And then there's all these terms and conditions that when you're posting images, they now own the images, too, and they can use them as they want to. Web 3.0 is supposed to solve for this by making the creators of the content the owners and giving them the ability to take the profits from that work. How that is done is through a different form of database structure called a blockchain. A blockchain is essentially just an append-only ledger. It's defensible against editing. That's why the finance world has seen value.
KASHIMA: So what are some of the ways you think Web 3.0 could support planning and city services?
WHEELER: I don't have a finance background, so I shy away from that aspect: how we accept a cryptocurrency, whether we can manage a cryptocurrency, whether a token economic model is valuable to the city. Crypto wasn't the thing for me. Instead, it was, what is the blockchain doing that a relational database system and Web 2.0 isn't?
I would very much like to see blockchain incorporated in our smart city work. I think that adds a level of transparency. Let's say a sensor is for the street right of way, and we're counting vehicles, we're counting pedestrians, and we're doing analysis on how cars are clustering, where people are clustering. That's very helpful to our economic development models and our use of the pedestrian space. I'm very interested in how people who have disabilities have access to the sidewalks in Philadelphia, because we have so many uses for our sidewalks here. We have cafés encroaching, we have signage, we have businesses doing deliveries. And if you're in a wheelchair or a walker or something else that needs to give you assistance, you have a very hard time navigating. I think having data around this that's 24/7, that helps us then propose thoughtful policies that we can reach a "yes" to everyone's needs ... I want to make sure that we have the privacy around that data, and we could use blockchain to prove that we're doing what we say we're doing.
KASHIMA: It sounds like it's the latest toolbox around evergreen issues in local government like efficiency, transparency, perhaps fighting fraud. What's a good example you've heard of?
WHEELER: At the city level, Reno, Nevada, has a pilot project where they took a paper process for their certificate of appropriateness — which is the approval process for an alteration to an existing historical property — and they worked with a company out of Brooklyn called BlockApps. They built out an interface where the register is now putting in that information. It's sequenced, so they get a trigger when the next step in the process needs to be done, when the next person in the approval path needs to sign on. And it takes that signature and makes it immutable. And that's all done in what they call a smart contract. I can always make the argument that I could have done it without a blockchain. I could have used a customer relations management tool to do this with some very simple configurations about who can sign and when can they sign. But right now, they're experimenting with it to see if it brings some value.
KASHIMA: Any pitfalls that planners in particular should be aware of?
WHEELER: Well, I think the pitfalls are apparent around some of the token economics. There's a lot of hot air in the room. There was a lot of pumping up companies with very bad, frivolous ideas around blockchain, and those are all evaporating now that the venture capitalist dollars are pulling out of startups. But that's how these things happen. When there's a bubble, it needs to burst, and then we need to shake out the good ideas from the bad ideas. So be wary of that, be wary of blockchain being proposed as a panacea for all things. It's a database that's append-only. I'll say that over and over again. Here's the thing: It doesn't store the amount of data that you're used to storing. If someone says, "Let's do a blockchain for your business licensing or your building licensing and your zoning program," the question to ask is, how does that improve upon what we currently have?
Blockchains are small amounts of information, and their transaction speeds are not very fast. Take calendars, for example. You have to do something within 30 days, and only certain people can use this information. The current case management systems handle that really well. Not everything in the database can be pre-populated and then made immutable. You need editing control. And if you need that, you can't use a blockchain. If you need multiple tables, if you need to store PDFs and images and other legal documents like in Word documents or other formats, you're not going to use a blockchain. You may use a blockchain for a component of it, and then the standard cloud, Web 2.0 technologies, for everything else.
I'm actually growing a lot more skeptical of where it has value and where it doesn't in government until there's a greater evolution of this Web 3.0 technology. It's got to get to a place where the user design is as good as what we have now, and the ability to service it and have a support model and a sustainable model needs to be there. And governments need to see longevity around that. We can do pilot projects with startups.
There's the digital divide, too. We start to get further and further away from processes that people without digital skills or constant internet connections can use. And I think that some of these conversations about the blockchain and Web 3 leave those people out. In government, you're going to have to have a paper-based process, because someone needs to be able to come to the counter at some point. Not everyone's going to be able to do this through an app or a website.