You have probably heard about the term, as it is one of the hottest topics of the moment. Yes, blockchain. As you probably also know, blockchain is the platform behind the Bitcoin and other crypto currencies. Blockchain is a distributed, digital transaction technology that allows for securely storing data and executing smart contracts in peer-to-peer networks (Dena, 2017). You can see a blockchain as a google spreadsheet, which enables users to work in the same version at the same time. However, the difference between blockchain and this example, is that previous versions of a blockchain can never be adjusted. Values can only be added (Blockgeeks, 2017).
So, now we know a little more about the underlying ideas of the blockchain, let’s look at further applications. Namely, blockchain is not only applicable in the financial sector, but it is also affecting others, such as the energy market. To understand this relationship, we first need to dive further into the development of the blockchain platform!
Blockchain has experienced three phases: Blockchain 1.0, 2.0 and 3.0, respectively these phases represent: an alternative digital payment system (with no intermediaries), the generation of smart-contracts and more sophisticated financial systems, and the deployment in big-data and predictive task automation (not yet accomplished).
Okay, well… this still sounds somewhat abstract. Let’s look at some examples and explanations for the energy sector. A great example of a blockchain 1.0 application would be the Blockcharge. This Blockchain, based on the Ethereum, offers a fully automated, worldwide authentication, charging & billing solution without the middleman for electric vehicles (Irina, 2016). Typically, blockchain 2.0 applications enable its members to trade energy using smart contracts (Burger et al., 2017). This application of blockchain could lower internal administration and auditing costs, and increasing confidence in the traceability of energy generation.
In conclusion, blockchain could potentially decentralize the energy sector, which could motivate people to start generating more renewable energy or using technologies which are making more use of renewable energy. This is, because the underlying technologies offer a faster and more transparent process. However, the technologies using blockchain for the energy market are still in its infancy, so there is a long way to go.
References:
Irina, S (2016). ‘Blockcharge blockchange based solution’, LinkedIn https://www.linkedin.com/pulse/blockcharge-blockchain-based-solution-charging-cars/ visited on: 09-2017
Burger et al., (2016) ‘Blockchain in the energy transition. A survey among decision-makers in the german energy industry’, Dena. https://www.dena.de/fileadmin/dena/Dokumente/Meldungen/dena_ESMT_Studie_blockchain_englisch.pdf visited on: 09-2017
Blockgeeks, ‘What is blockchain technology’, Blockgeeks. https://blockgeeks.com/guides/what-is-blockchain-technology/ visited on: 09-2017
