Blockchain is the key to the digital future of Vienna

Austria is a European leader in applying modern technology to improve the overall well-being of its citizens. Making cities “smart” and digital is a key part of changing public goods and services to achieve this goal. Vienna is particularly keen on innovation and is trying to find new solutions through digitalization. Easy access and clear benefits are key factors that are widely recognized among citizens in Vienna, making them willing to participate and help improve the transition process.

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In order to further promote the breakthrough of digital technology and make it the backbone of society, Vienna convened the so-called “Smart City Vienna” initiative in 2014 to improve the lives of its general population. However, smart city projects don't just mean cultivating technology. Instead, the latter is seen as a tool that helps to make social change and make the city more livable. Technology is the servant of mankind, not the other way around.

The Smart City Vienna strategy considers multiple areas that need to be transformed, such as energy, mobility, and real estate. Every aspect of the strategy has a clear goal to provide transparency and urgency. There are a total of 38 target targets to 2050, and by 2025, 2030 and 2050 will reach different milestones.

Blockchain is a key factor in achieving these goals. Therefore, it has been applied in some way to different use cases related to the strategy. One of them is the notarization of Open Government Data (OGD) – promoting the use of food stamps by local government employees. Power supplier Wien Energie, run by the city's management department, is now exploring the use of blockchain technology for some time, trying to make its grid distribution more efficient. Last but not least, Vienna is building a blockchain-based token that is part of an incentive-driven program that rewards citizens for “good behavior”.

In what ways can the blockchain further promote the smart city of Vienna? Will the capital eventually get its own cryptocurrency? Why is digitalization so widely accepted in the population of Vienna? Cointelegraph Germany and Vienna's chief information officer Ulrike Huemer sat down to answer these questions and further elaborate on what is going to happen.

Smart City Vienna – Digital Road

Cointelegraph: What is your opinion of Vienna as a “smart” city?

Ulrike Huemer: In many different rankings, Vienna scores very well. Part of it is due to our comprehensive approach to the Smart City program, which continues to drive new projects and is regularly monitored. However, our integrated approach is more than just a means to an end. When making our city “smart,” our guiding principle is to cover all of our foundations. This is not just for technological innovation – instead, we want to use it as a tool to lead us to social change and the environment. Sustainability. All of this is to provide the best quality of life for all citizens, so we include each city management office and connect it with companies in the private sector to build a broad network as the basis for the transformation process.

“It’s all about providing the best quality of life to all citizens.”

We are not only emphasizing these views to the public, we also want to ensure that this concept is reaffirmed internally so that it can be sustained. Promoting research and development-oriented policies is key, but getting everyone involved in what we are trying to do is also true. The consulting firm Roland Berger puts our digital agenda first in the recent “Smart City Index” publication, in particular for our continuous efforts to improve the healthcare system through technological innovation. According to the study, open government data and our progress in areas such as mobility, environmental sustainability and education put us at the top of the list. We hope to continue to use this as a basis to truly make Vienna a "smart city."

CT: What is the positioning of Austria in the concept of smart city? Is Austria in a good starting position?

UH: Due to various public infrastructure frameworks, Austria is fully capable of meeting future challenges. The concept of a smart city can play a key role here. The most important aspect is the implementation and cooperation with relevant actors. When dealing with smart city themes, you first need to ensure that adoption is done through a wide range of processes. Civil society, the economy and science must have the opportunity to present their interests to the city administration so that we can fully understand the future that all parties deserve. By integrating all interest groups, we can ensure the integrity of the strategy. Finally, there is a need to establish such an agenda, political support and an assessment process that makes success and potential visible.

CT: Implementing a smart city is very expensive. Who pays for the necessary digital measures?

UH: There is no direct answer to this question. In fact, as of now, the city of Vienna has no additional budget for the current smart approach. Therefore, departments and actors must use the existing budget and try to innovate their sovereign work. In addition, there are additional funds that are jointly funded by the EU or the country. In recent years, this has brought about an additional investment of about 15 million to 20 million euros for Vienna.

Blockchain solutions for future cities

CT: What is the role of blockchain technology in the smart city of Vienna?

UH: The city of Vienna has been actively exploring blockchain technology. We hope to use this technology to promote the digitalization of cities and the related guiding themes of transparency, openness, trust and civic engagement.

We chose to use this technology for our own processes, proactively shaping development and supporting its promotion. From the outset, we knew that the only way to test the potential of blockchain technology was to “learn by doing”. That is why we launched a pilot project for successful implementation. The main goal of the pilot is to build the necessary expertise in urban management. In our ICT [Information and Communication Technology] municipal department is called Magistratsabteilung 01 – Wien Digital.

“From the beginning, we knew that the only way to test the potential of the blockchain technology was to “learn by doing”.

Through the DigitalCity.Wien-Blockchain.Initiative, we connect key areas of identity, education and research with the blockchain community in Vienna, thereby strengthening the position of stakeholders and Vienna as a blockchain.

CT: The city of Vienna provides open data and e-government for its citizens. How does the blockchain improve management?

UH: In December 2017, a unique solution was published in Europe, using blockchains to ensure open government data. The first blockchain pilot in Vienna City, “Open Data Notarization”, focuses on acquiring knowledge of blockchain technology. The OGD checksum of the city of Vienna is publicly stored on the blockchain and is open to the public. Therefore, anyone can view and check the authenticity and history of the data itself, thus eliminating the need for intermediaries.

The solution is now in use and will include all data records of the Austrian government located on the Austrian data portal in the next few weeks.

CT: Wien Energie is working on the use of blockchain technology and working with the city of Vienna to develop a smart city concept. Can you tell us about blockchain solutions for sustainable energy?

UH: Blockchain technology allows us to expand our innovative energy solutions. Let's take the example of a microgrid: these small and decentralized networks are completely autonomous, connecting suppliers and consumers in the shortest possible way, minimizing power loss. Most importantly, they eliminate the need to extend the main grid, which can be very expensive.

We also explore so-called energy sharing through blockchains. To this end, we have built a blockchain infrastructure in the “Viertel Zwei” research area to connect it to existing power supplies.

CT: The City of Vienna is using the blockchain as part of the so-called “City Token Plan”, which began in collaboration with the Institute of Cryptography of the Vienna University of Commerce (WU). Can you elaborate on the content of this initiative?

UH: Ok! At its core is the idea of ​​getting people involved, allowing them to care about their surroundings and provide them with incentives to improve the city. We created a so-called “cultural token” to foster this idea as a reward for any type of good behavior defined by the initiative. In return, citizens can use the token to get the art and culture around the city. As an example, we hope to encourage the citizens to park their cars behind, let them walk and get tokens in the process to reduce carbon emissions.

“The core idea of ​​our 'cultural token' is to engage people, provide them with incentives and contribute to improving the city.”

CT: How are these “cultural tokens” established?

UH: "Cultural Token" exists only in digital form and can be used on mobile phones and tablets. It was established as a reward system, but in stark contrast to the social credit system managed by the Chinese government. The city of Vienna is keen to use technology to benefit its citizens. It should simply reward people for volunteering and do good things in many ways. We also try to expand the scope of tokens – not only by linking them to art and culture, but also as a true payment method for many different services. In this way, it is not just a “cultural token” but a “Vienna token”, which is actually a long-term goal.

CT: In the context of the Smart City Program, is there any further plan to use the blockchain?

UH: We hope to use the results of the above “Open Data Notarization” project. We work with our partners and hope to establish a notary service that can be applied to many different areas. For example, help notarize city government documents or further "machine learning." Another important theme is self-sovereign identity, focusing on data that completely controls itself – blockchain technology can also help here. However, there are many use cases, such as the Internet of Things (IoT) and related applications. We are likely to integrate blockchains into different devices and supply chains wherever we see fit.

CT: Does the city of Vienna want to issue its own cryptocurrency?

UH: No. As a city, we are only as observers. At some point, blockchain technology may be used as a means of payment because it can greatly improve financial transactions.

Create dialogue

CT: What is the role of large technology companies in Vienna? Smart City plans may have great commercial use for them, especially with blockchain, artificial intelligence, the Internet of Things and big data, right?

UH: All of our partnerships should provide mutual benefit to both parties – technology companies are no exception. Therefore, the Smart City Initiative does establish a framework to strengthen existing partnerships through technological advances. The most important goal is to improve the quality of life in Vienna, which is our main premise.

The “DigitalCity.Vienna” program aims to build Vienna into a European digital leader and we are looking for marketing accordingly. DigitalCity.Vienna plans to use an open format for all interested parties. We are doing our best to connect all relevant parties and help them find common ground. In regular events, we sit at major companies and promote startups, municipalities, public institutions and academic institutions to create an ongoing dialogue in the digital ecosystem.

“The goal of the 'DigitalCity.Vienna' project is to build Vienna into a European digital leader and we are looking for marketing accordingly.”

CT: What kind of government assistance does Vienna need to stay ahead of the global blockchain adoption competition?

UH: We want to strengthen existing partnerships in this area while attracting more blockchain projects to Vienna to benefit from long-term expertise. In the blockchain, intricate knowledge is essential, which is why we insist on building and retaining blockchains. A typical example is the Austrian blockchain center, which is studying many different blockchain use cases. The research center recently settled in Vienna and we intend to keep it here and provide some funding. These projects, together with government assistance and close cooperation with the private sector, will make Vienna a major international blockchain city.

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