Dubai: We built this city on block and chain

When I think of a smart city, I think of a driverless taxi taking me from one location to another, with almost zero levels of traffic due to smart management systems. I think of an electric grid running on renewable energy that can personalise energy distribution according to users’ past behaviors and patterns. And I think of city-wide 5G connectivity that makes accessing information easier for everyone who lives or works there.

The city of Dubai – known perhaps for its wealth, skyscrapers, luxury, and instagrammable sites – is looking to position itself as the smart city of the future, a utopia between the desert and the sea where tech drives the life of all residents.

Digitisation is a key part of ruler Sheikh Mohammed bin Rashid Al Maktoum’s 10-year plan to catapult Dubai into the world’s top cities by economic strength in the next 10 years – known as D33.

The plan envisages a programme to support 30 private companies to achieve unicorn status ― worth more than $1 billion (about Dh3.67 billion). Other business incubators will support the growth of private companies, with 400 of the most promising identified.

The plan has also seen an overhaul of the way Dubai’s government runs the city, moving almost 100% of departmental services online, and giving citizen’s access through their smart phones and devices. Underpinning much of this, according to city executives who spoke to TechInformed on a recent press trip to Dubai, is the blockchain.

“Dubai was quite early in terms of blockchain adoption,” claims Marwan Al Zarouni, who sits down with TI as part of the Gitex and North Star conference in Dubai. Al Zarouni is CEO of the Dubai Blockchain Center, a position he has held since 2018.

“We held our first Bitcoin conference in 2014, and his highness (Sheikh Rashid) launched our first blockchain strategy in 2016. This was to utilise all applicable use cases of blockchain within government by 2020.”

According to Al Zarouni, this target was achieved. At present, the digitisation rate of government services is at 99.5%, while the paperless government objective has been achieved 100%. Digital transactions account for 87% of total government service transactions overall, according to figures from the Dubai Trade board.

Use cases enacted by the city government include value exchange (including monetary value and property), land deeds and any other ownership certificate being passed from one person to another, smart contracts, and governmental records. These are, he says, all decentralised and running on a blockchain ledger system, allowing residents and businesses to see the history of any deed or contract as it passes through multiple hands.

E-Pass

Central to Dubai’s interaction with its citizens is a digital application called the UAE Pass. The pass offers access to various government services by any federal or local government entity through one application, but also allows users to complete transfer of documentation, such as land leases, by way of a digital signature tool which is built in.

Launched in 2018, the UAE Pass is a key element of the UAE’s long-term development strategies, explains Al Zarouni, and is a joint project led by Smart Dubai, Telecommunications Regulatory Authority (TRA) and the Abu Dhabi Digital Authority. It replaced DubaiID or SmartPass solutions as a unified login credential for all online government transactions across the UAE, including paying utility bills and filing residence visa applications.

“Your pass has your digital identity,” adds the blockchain chief. “It’s verified, qualified, abiding by the US as well as European [privacy] standards.

“You, as an individual, have sovereignty over your own data and your own identity. You can even share any information you want with others through a QR code which the app generates.

On the public side, it operates on the Ethereum blockchain, while also using Quorum open source blockchain technology to offer the private access not available through Ethereum.

Dubai has also signed up a number of partnerships: during our conversation, Al Zarouni cited the Adobe Consortium as one example ― to allow other tools to interact with documents stored on the UAE pass.

This means that a user looking to sell their house can officially sign off on documents such as a lease directly through the app. This is done through the blockchain to allow oversight on who has made what changes to the document, but in a way that protects the private data of each user.

One use case highlighted at the conference was for workers looking to emigrate to Dubai to set up a business there. At a booth at the North Star conference, people could run the full gamut of services and checks necessary to both live and work in the emirate, only needing to leave the conference hall to do medical checks. This includes registering personal details, creating or transferring documents needed to work, and even finding a home – much of it done through the UAE Pass.

Though there is no cryptocurrency involved, UAE Pass allows for activities such as payments of governmental services and bills, money transfers, documentation, and even advice on prayer.

But, one pressing question as ever, when someone says they have built a solution on blockchain, is whether it actually needs the blockchain at all to function. Al Zarouni claims that it does.

“We don’t just use blockchain for the sake of using it,” he says. He goes on to explain that the identity itself isn’t built around blockchain ― rather, it uses SHA-256 (a secure hashing algorithm), which generates a unique digital fingerprint that can then be used on each block of data on a chain.

“We use the same technology as the likes of Bitcoin, but it is reliant on the same SSL encryption technology that you can trace back to the ‘80s. So it is a tried-and-tested base technology, and this allows for better encryption on mobile devices. Couple this with the blockchain technology we are using, you get the best of both worlds.”

Vegas bets big on smart city future

Uptake

The number of projects that are connected to blockchain or crypto and have some link to Dubai is staggering ― Al Zarouni claims there are over 1800 that fall within the purview of the Dubai Blockchain Center, but this number is “growing every day” he adds.

This spans enterprise, private companies, and public bodies. They are from both legacy firms and start ups and span software, hardware and beyond. Some are local businesses that were founded in the city, while others are international projects that have either moved their head offices here or set up a regional hub.

DBC’s remit includes supporting these start ups, attracting businesses to Dubai by promoting the emirate, offering advice and training around blockchain use cases, and organising and leading events on crypto matters in the region.

One example he points to is in the healthcare sector, where the UAE Pass helps connect patients with organ donors, through a hierarchical process that prioritises need, without any private data being shared. It uses Human Leukocyte Antigens (HLA) matching to check relevant blood types, DNA and any other relevant physical attributes to confirm a donor and recipient are a safe pairing.

“Blockchain propelled this to new heights,” he says. “We use HLA matching ― which is DNA based ― which allows us to match people safely without breaching their privacy. It has transformed the way we keep health records. But there is no value exchange there ― it shows that blockchain doesn’t just have to be about value exchange.”

If it sounds like Dubai is using a lot of blockchain, that’s because it is – the total blockchain market was estimated at around $7.4 billion in 2022, according to MarketsAndMarkets analysis. So is it just a case of Dubai jumping on the blockchain bandwagon?

Al Zarouni denies this, saying “we focus only on applicable use cases” in Dubai. “We practice what we preach ― we don’t tell companies to use blockchain unless they need to or would benefit from it.

“At the same time,” he adds, “we have built a lot of the city’s smart infrastructure on blockchain so it is at the core of everything we do. But not everything uses it ― not everything needs it.”

So why has Dubai succeeded in implementing blockchain to underpin its smart city projects, when so many of those ideas floated during the so-called blockchain boom fell away?

“Digitisation is key,” explains Al Zarouni. “Part of the Digital Dubai strategy is that everything from the government has to be digitised and paperless, so it makes the integration of new digital projects much easier.”

Regulation is also important. Dubai is one of the first regions to set up its own crypto and virtual assets regulator, tasked specifically with regulating what is a key focus for the city. This, he claims, gives more clarity to start-ups looking to operate or thrive in a Web3 world.

“A lot of people thinking of creating businesses in the Web3 ecosystem might be looking at challenging existing markets or jurisdictions, and having a friendly regulator and an open environment helps. We see a lot of companies moving from the US or opening offices here in Dubai because of the government support.”

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