What Is Blockchain? Is it the Future of Energy?

What is blockchain, and why is it important for the energy sector?

If you know anything about blockchain, you are probably wondering how it is related in any way, shape, or form to energy. Indeed, the concept of blockchain was originally confined to the cybercurrency known as Bitcoin, where the technology chronologically records and links transactions made across the network, securing the Bitcoin environment.

Now, however, the blockchain concept is being applied to situations beyond Bitcoin, and especially in the energy sector. Inquiring energy experts asked if this same technology used to track the flow of cybercurrency could be used for energy transactions. And, as it turns out, it might be able to. Thanks, energy experts!

With blockchain, an energy consumer would be able to securely sell any unused energy to a willing buyer, such as a neighbor. Blockchain would track the flow of electrons on a distributed grid, much like that of currency in a cyberenvironment. At its core, blockchain would be able to create a secure, instantaneous, and independent system for energy transactions.

For all its positives, there are some obstacles that blockchain must overcome before it can meet the high expectations of energy experts, especially on the technical side. For instance, blockchain does not currently provide the sufficient bandwidth and throughput needed to make global energy transactions a reality. But don’t despair! Many are working to create blockchain a usable, everyday part of life. This map shows the areas where blockchain research has made headway:

What would a blockchain future look like?

If blockchain technology gets past the current technological barriers, it would significantly alter the energy sector. For one, it would eliminate the need for an electricity retailer, as transactions would happen directly between an energy producer and an energy consumer. This means that a household would be able to buy the energy it needs from a preferred sustainable energy producer. Furthermore, any unused energy by a household could be sold or gifted to a neighbor. The blockchain future is a bright one, and we look forward to it!

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3 comments

  • Zach May 13, 2019   Reply →

    The physical power grid is owned by the utility. We offer supply options that can give a huge savings to commercial energy clients. My question is.. how would it ever be possible to give a savings to customers besides supply. The physical lines are maintained by the utility. I’ve been told it’s possible, but never explained logically anything more.

    • Zach May 13, 2019   Reply →

      As far as I know… Block Chain can be used for supply of electricity, not not distribution. We may have something because of deregulation of supply, and solar… is that it for energy…

  • Jay Martine December 5, 2018   Reply →

    Obviously there are some kinks to work through before this comes a reality; here are my top questions on this:
    1. Where does the energy distribution system owners get their payment from? We would need to pay them too.
    2. Would we be billed by the kilowatt/hour/mile?
    3. If the lights go out who do we call for help?
    4. If our primary supplier goes off line or is over subscribed, would we need to contract with a secondary source as a backup?
    5. If my neighbor doesn’t pay his bill who pulls the plug on his house even if we share the same local transformer?

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