Does the engineering world need to care about NFTs and blockchain?

If the first question out of people’s mouths about either blockchain or NFTs is “What exactly are they?” the second question is inevitably “Is this something I actually need to care about?”

If you’re an artist who makes a living selling art, the answer might be yes. But if you’re in the engineering world, the potential benefits are far less clear.

At the post office

A quick primer on these buzzy technologies is helpful here. Most people have heard of blockchain, a distributed ledger technology that famously serves as the basis for cryptocurrencies such as Bitcoin, which first appeared on the scene in 2008. Blockchain is capable of recording transactions and creating an immutable record without the participation of any centralized authority such as a bank or public body.

Blockchain also underpins non-fungible tokens – NFTs. Right now, NFTs are primarily used to show ownership of a particular object or digital file. Often this is a 2D graphic, but it can be almost anything – a music file, a piece of text, a video or even a 3D file.

If you’re an artist, you can see where this could be useful: you can put your art up for sale, and a collector can buy an NFT that says they’re the official owner of that artwork. (In theory, anyway – more on this in a bit.)

So how might this apply to the engineering software space?

‘I did it’

Unlike the individuals in the art world, people in the engineering world don’t usually create 2D files and 3D files just for artistic expression and then try to sell them. They create these assets because they intend to Do something with these files, like designing and manufacturing an actual real-world object.

So, strike one: not much use to be found for NFTs and blockchain on that particular front. But maybe there is another application in the engineering area, perhaps around intellectual property and documentation of the product development process?

Imagine a manufacturer designing an innovative bicycle. An engineer is responsible for the bicycle frame. As they go through the development process, every time they create a new CAD file, they check it into the blockchain so that their work on this new product is documented on the blockchain. Years later, if for some reason they need to prove their work on this product, a permanent, publicly available record is there for all to see, and the engineer can say “I did it.”

It sounds as a nice utility case. But unfortunately, this is where the “theoretical” benefits of blockchain quickly run into some buzzsaws.

Not so fast…

First, while there are a small handful of companies making technology that do this sort of thing, they are few and far between. In terms of the innovation adoption curve, this field is really still in its infancy – which is surprising since the underlying technology has been around for almost 15 years.

That’s not to say there aren’t plenty of enthusiastic voices out there about the potential of blockchain and NFTs in the engineering world – but not all of them have pious motives. If someone has bought a boatload of Bitcoin or NFTs for purely speculative reasons, they are likely to struggle anything has to do with blockchain and its potential because it indirectly benefits the investments they have already made.

Then there is the question of the blockchain’s environmental impact. Even the newer, more developed blockchain protocols like Ethereum still use massive amounts of energy [subscription required] when they record and validate transactions across a distributed and decentralized ledger. With the “proof of stake” mechanism to validate entries, this energy use is less of an issue, although it has other issues. However, the point is that on a rapidly warming planet [subscription required] Looking down on a climate crisis, blockchain is a difficult technology to embrace unless transactions can be made radically more efficient.

All of this is to say nothing of the fact that much of what blockchain could enable the engineering field to do is already possible to do – and much more easily achieved – via existing methods. Want to show proof of previous work on a product? Every time you check your CAD file in some kind of CAD or PLM system, there is an audit trail of who has accessed, created or modified the file. Do you need an indisputable patent? It is a patent office that decides such things.

While it might be nice to get an “official” NFT that says the work in a CAD file is officially yours, the NFT doesn’t mean you own it in any legal sense. It’s just a digital signature that means something in the “blockchain world” but doesn’t necessarily mean anything legally.

The fact is that most of the things you can do with the blockchain, you can do easily without the blockchain using a centralized database. The only thing you lose is the decentralization, which – frankly – might not be enough of an incentive for people to throw their lot with this new way of doing things, given all its potential drawbacks and inefficiencies.

Hope springs eternal?

Clearly, the case for blockchain and NFTs is not a slam dunk in the engineering space. But – there is always a “but” with new, emerging technologies – if you squint hard enough, you can see the hint of potential in several exciting areas. One of these is smart contracts, which are essentially self-executing contracts built into the blockchain.

These contracts contain a set of customizable instructions that enable specific actions to be performed if certain conditions are met. For example, you can create a smart contract that follows a digital asset – such as an NFT or other file – and executes instructions around payment, distribution rights, current rights or other factors.

In this way, smart contracts go significantly beyond what we see in traditional PLM systems. Additionally, they offer the potential to cut out an entire layer of middlemen, which – in a world of ever more makers and makers – actually has significant value.

Another exciting area for blockchains and NFTs centers around the digital virtual worlds that are being built to create the so-called metaverse. Blockchains and NFTs are central to the way ownership is assigned and content filled in this space. Creating NFTs and putting them on the blockchain is at the heart of creating this virtual infrastructure.

This can naturally lead to a need to bring engineering resources into these virtual worlds, whether it’s bringing data in for review or pushing it out at the end of the product development lifecycle when a digital asset is delivered. It may not be common at the moment, but over time it will be worth monitoring what the demand for engineering data is in these virtual worlds.

Maintain a healthy dose of skepticism for now

Blockchain and NFTs have shown that they have some interesting applications for artists or for people who simply want to have fun with speculative assets. When it comes to engineering software, there are some possible applications around smart contracts and populating the metaverse – but overall, the jury is still out.

There isn’t a lot of serious engineering being done right now with blockchain and NFTs – and there may be good reasons for that. At this point, it’s primarily a solution in search of a problem, and it’s not clear that its use will become more compelling or viable in the future, without some major, fundamental changes. For those in the engineering world who wonder “Is this something I need to care about?” The answer is: not at the moment. For now, it will be enough to keep a watchful but skeptical eye on this developing area.

Jonathan Girroir is senior manager of technical marketing at Tech Soft 3D.